GM Channel Stuffing Rises To All Time High

Tyler Durden's picture


Moments ago GM reported that February total sales in February dropped 1% Y/Y to 222,2014, beating expectations of a 7.7% drop (if the same beat was not matched by GM's key competitor Ford, whose February sales dropped 6.1%, below the 5.3% expected, and Volkswagen whose US sales tumbled 13.8%). The bounce was largely thanks to Buick sales which posted an 18.8% increase in February. However, the actual sales were largely irrelevant. What was notable is the following number: 805,769. This is the number of units in dealer inventory at month end. This was an increase from the 780,140 in January and is the largest ever channel stuffing print yet recorded by the post-bankruptcy GM in history.

Good luck liquidating all that pent up inventory without major incentives and margin crushing price reductions for the everyone in the distribution chain.

Source: GM

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Mon, 03/03/2014 - 10:57 | 4501307 Richard Chesler
Richard Chesler's picture

That's a lot of lemons.


Mon, 03/03/2014 - 11:01 | 4501318 Hippocratic Oaf
Hippocratic Oaf's picture

'Cept these lemons can't make lemonade

Paging DCfusor........................

Mon, 03/03/2014 - 11:04 | 4501343 kaiserhoff
kaiserhoff's picture

They still make Buicks?  Who knew?

Wake me when the trucks go on a two for one sale.  I think I can make a few bucks parting them out.

Mon, 03/03/2014 - 12:10 | 4501735 nuclearsquid
nuclearsquid's picture

Look no further than these car lots for proof of inflation.


Mon, 03/03/2014 - 12:15 | 4501765 pitz
pitz's picture

Actually real car prices have been steadily declining. 

Mon, 03/03/2014 - 19:13 | 4504068 CognacAndMencken
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The numbers reported today are GM sales to end-users; it is NOT GM deliveries to dealers.  For proof of this, please read their press release:

Notice the first sentence: "General Motors Co. (NYSE: GM) dealers delivered 222,104 vehicles in the United States in February 2014."

Dealer inventories are increasing because dealers are selling more.  There might be a few up/down months here and there, but ever since their bankruptcy, the sales trend has been UP.... this is why their inventory is INCREASING.  With all due respect, the notion that GM is "stuffing" their lots to pump up their monthly sales numbers is factually incorrect.  These monthly sales numbers are to END-USERS, not to dealers trying to stuff their lots.   

I'm not trying to be confrontational or rude... I'm just stating the truth.  Read the press release. 

Mon, 03/03/2014 - 12:23 | 4501809 TruthInSunshine
TruthInSunshine's picture

Let the post-BK "Red Tag Sale" begin, along with local dealer commercials whereby they show some moron in a WWII Sherman Tank trying to run over & crush a 1979 Toyota Corolla (that still runs fine with 392,000 miles on the odometer).

p.s. - Ford is literally surviving on sales on sales of its F Series, which accounts for 90% of its GLOBAL PROFITS, and it actually makes peanuts or even loses money on many of it non-truck sales, it has a rapidly rising inventory also, so they better better pray that F Series sales don't slow down, especially with the 12.1 billion dollar line of credit they recently assumed (rotated into from a lower threshold).

Mon, 03/03/2014 - 12:51 | 4501974 pitz
pitz's picture

Around here, the "F" in "F-Series" rhymes with fun.   As in, yer "F"-ed if you actually paid money for one.

Although in fairness, its shocking how quickly the wheel wells on the not-so-old Chevys have been rusting. 

Mon, 03/03/2014 - 10:59 | 4501315 nflux
nflux's picture

so how long until they hit 1 million?

Mon, 03/03/2014 - 11:03 | 4501331 Rainman
Rainman's picture

Time to replace the tens of thousands of 2 year old .gov GM vehicles .

Mon, 03/03/2014 - 12:12 | 4501749 Emergency Ward
Emergency Ward's picture

Especially the black Suburbans, Escalades and Denalis.....

Mon, 03/03/2014 - 11:02 | 4501334 Spastica Rex
Spastica Rex's picture

Do they still make Volts?

Mon, 03/03/2014 - 11:06 | 4501353 kaiserhoff
kaiserhoff's picture

Yes, but they burn half of what they make testing fire extinguishers;)

Mon, 03/03/2014 - 11:03 | 4501336 yogibear
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Resurrect  the cash for clunkers again. Currently Obama has no debt limit or spending limit now. Barry can spend money like a Chicago Hyde  Park liberal or until the US dollar crashes. 

Double the US debt again. Go for a target of $35 trillion of debt this time. 


Mon, 03/03/2014 - 11:10 | 4501357 Smegley Wanxalot
Smegley Wanxalot's picture

Do the math.  Inventory stuffing increased about 25k vehicles and 222k were sold, so 11% of the vehicles "sold" were to stuff, so if total sales are down only 1%, the true sales were down 12%.

GM is learning math from the BLS

Mon, 03/03/2014 - 11:23 | 4501447 headhunt
headhunt's picture

They hate math!

Mon, 03/03/2014 - 19:16 | 4504085 CognacAndMencken
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You are reading the report wrong.  The sold vehicles are to END-USERS.  Read the press release.


Mon, 03/03/2014 - 11:07 | 4501360 ziggy59
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No weather excuse?!?

Mon, 03/03/2014 - 11:11 | 4501376 Nue
Nue's picture

Every damn week I'm getting crap in the mail from the dealers. "Will your key be the winner?" "Double your Tax Return" "Scratch and win" I'm expecting them to start cold calls from them any day now. 

Mon, 03/03/2014 - 11:15 | 4501403 orangedrinkandchips
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Does GM 'count' a sale when it is transferred to the dealershits? Off their lot, thus a sale?



Mon, 03/03/2014 - 11:26 | 4501470 rpboxster
rpboxster's picture


Mon, 03/03/2014 - 19:23 | 4504110 CognacAndMencken
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At the end of every month, all auto companies report sales to END-USERS - real buyers.  This is what was reported today by all auto companies. 

For the quarterly reports (in compliance with GAAP), GM reports sales to their dealers.... not to the end-user.    

In other words, there are two different reports. 


Mon, 03/03/2014 - 11:26 | 4501471 headhunt
headhunt's picture

It is my understanding a sale is out the door to the dealer, that would be GAAP but being a quasi-government entity they may not comply with GAAP.



Mon, 03/03/2014 - 12:11 | 4501744 orangedrinkandchips
orangedrinkandchips's picture

Thanks for the 411 everyone!...That is what I thought.

Obviously these dealers are independent, middleman.



Mon, 03/03/2014 - 12:07 | 4501697 Emergency Ward
Emergency Ward's picture

The union and management don't care too much about "sales".  They care about cars rolling off the line.  The overtime is paid to line workers for their extra hours of hard work and production-quota bonuses are paid to management.

Union and management learned the lesson of the bailed-out banks (that stuffed their loan channels, siphoning off loan fees with little concern about the principal on the Govt-guaranteed loans) -- crony-corp GM is TBTF. 

Too bad all those fine GM vehicles are just sitting there -- they will eventually be sold cheap with the taxpayers subsidizing the losses.

Mon, 03/03/2014 - 13:20 | 4502146 german Wunderkind
german Wunderkind's picture

well atleast they are doing something with the money and not just burn it like the banks...

and its not the unions fault, unions are working fine in the most other countrys.

vw has 3 union guys and the governer of niedersachsen in the board of directors. 4/6

and vw is doing well, same goes for the other german carmaker.


Fri, 03/07/2014 - 10:26 | 4520955 headhunt
headhunt's picture

The Germans have the luxury of a very homogenous society and what they consider to be their societal norms which includes working for a living.

The US has 'taught' an entire generation that they 'deserve' what ever they want no matter that someone else may have to pay for it. The unions should be banned from all government and all laws requiring private companies use union labor or union labor pay scale should be eliminated. These laws reduce the paycheck of the average citizen to fatten union labors paycheck. Total BS.

Mon, 03/03/2014 - 11:18 | 4501421 economisery
economisery's picture

Mass factory production without any market demand.

This economic model was such a raving success in the USSR....

Mon, 03/03/2014 - 11:30 | 4501483 Rainman
Rainman's picture

yeah, and look how well all those Chinese ghost cities are working out.

Mon, 03/03/2014 - 11:39 | 4501537 Cpl Hicks
Cpl Hicks's picture

About as well as Detroit.....wait , they are probably doing better!

Mon, 03/03/2014 - 11:34 | 4501517 Uncle Remus
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You can have any color Lada you want, as long as it's black.

Mon, 03/03/2014 - 11:22 | 4501442 LawsofPhysics
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Good, I just had a transmission blow-up on one of our carry-alls.  Looking for a good discount.

Mon, 03/03/2014 - 11:30 | 4501487 Seasmoke
Seasmoke's picture

i have my Obamacare signed up and sitting in my online cart......GM has their cars sold and sitting on dealers lots

Mon, 03/03/2014 - 11:33 | 4501510 Frostfan1
Frostfan1's picture

GM offered their GM Card members a top-off to $2,000 rebate on their cars and they still couldn't meet numbers.

Mon, 03/03/2014 - 11:51 | 4501615 Snoopy the Economist
Snoopy the Economist's picture

You have heard of the Owebama phone - next will be the Owebama car. Free with each vote.

Actually, subprime auto loans already account for much of the auto sales - another bubble to pop.

Mon, 03/03/2014 - 12:00 | 4501667 starman
starman's picture

GM's total domestic sales were 4.2 million cars in 2007

2013 came in at 2.3 million!!!


Mon, 03/03/2014 - 12:00 | 4501675 starman
starman's picture

GM's total domestic sales were 4.2 million cars in 2007

2013 came in at 2.3 million!!!


Mon, 03/03/2014 - 12:14 | 4501760 pitz
pitz's picture

I bet if I visited a dealer, some salesman would lie to me about the lowest cash price possible, or that the same salesman would insist that if I don't buy today that they might run out of a model. 

Mon, 03/03/2014 - 12:30 | 4501851 Rising Sun
Rising Sun's picture

GM is moving their head office to Moscow in an attempt to solve this inventory problem.


Audi solved theirs - MOAR GUBERMINT handouts with a "park the new cars in a farmer's field until they start rusting - crush them, make MOAR new cars" strategy.


The world of "lather rinse repeat".

Mon, 03/03/2014 - 13:11 | 4502085 Caveman93
Caveman93's picture

Calling William Banzai. Need photo of Krugmann smashing GM vehicle windows ASAP!

Mon, 03/03/2014 - 14:09 | 4502378 The Most Intere...
The Most Interesting Frog in the World's picture

The dealers should take 15 minutes, cover all of their inventory with GEICO insurance, and then promptly nuke the shit out of it...  This is their only chance to make $...

Mon, 03/03/2014 - 22:35 | 4504839 Rentier88
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