GM Reports Record "Channel Stuffing": Dealer Auto Inventory Highest Since June 2007

Tyler Durden's picture

As we await all US carmakers to report June auto sales, we remind readers that when we discussed last month's disappointing monthly car sales report, which badly missed expectations showing the fifth consecutive month of declining auto sales - the first time this has happened since July 2009 -  with domestic light vehicle auto sales printing at an annualized 12.59, the lowest sales number going back more than three years - we noted what may be the biggest concern for the auto industry: inventory days continued to trend higher as OEMs push product on to dealer lots even though sale-through to end customers has seemingly stalled.

Of note, we highlighted GM, one of the few OEMs to actually disclose dealer inventories in monthly sales releases, which reported that May inventories increased to 101 days (963,448 vehicles) from 100 days at the end of April and just 71 days (681,402 vehicles) in April 2016. Indicatively, analysts say an overall inventory level of 60 to 70 days is healthy. 100 is not. GM management was eager to deflect attention from this troubling statistic, and said that soaring inventories are normal and, somehow, "reflect strong sales", as per the press release: "As planned, GM’s inventories reflect strong sales, lower car production and strategic, launch-related growth in truck and crossover stocks."

Or maybe not, because as Automotive News reporter Nick Bunkley pointed out something troubling: with 935,758 unsold GM units collecting dust in dealer lots at the end of June, this was the highest inventory number in 9.5 years,  the highest since November 2007, one month before the recession began.

Fast forward to today when GM reported its June results which again disappointed, and were down 4.7%, more than the expected 3.4% decline (although one wouldn't know it by looking at the stock which was up as much as 3%). GM sales were dragged by most brands: Chevy -6.4%, GMC -3.6%, Buick +16.4%, Cadillac -11.8%. But that's not what caught our attention: a bigger problem is what GM revealed in its deliveries report which disclosed a whopping 980,454 units in dealer inventory at the end of June, up nearly 17k from the past month, and representing 105 days of supply, up from an already red-flag raising 101 in May. As Buntkley notes, "GM's inventory has officially hit a 10-year high. 980,454 units in stock (a 105-day supply) as of June 30, the most since June 2007."

In short: GM "channel stuffing" just hit a new all time high for the restructured company, with the number of GM vehicles parked at dealer lots and patiently waiting for a buyer rising to the highest since the summer before recession officially began, when GM was still pre-bankruptcy GM, with far greater (if ultimately superfluous and in need of restructuring) production.

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Insurrexion's picture

 

I see Barack Obama in a yellow plaid suit at the Used Car Lot in Chicago.

"Come on dowwwwwwn. There givin' 'em away!".

Fishthatlived's picture

Just like Linn Burton "for certain"-- "Your choice just $4995 FULL air conditioned price!"

 

https://youtu.be/QOX9jjr6z7E

Haus-Targaryen's picture

Anyone else ready to get themselves a good brand new farm truck for like $5k once this comes unglued?

bamawatson's picture

if it is a GM, then the truck will come unglued first

Kalashnikov545's picture

I have an 08 2500hd duramax LTZ, every available option that model year, which had a 58,000+ sticker price.  it has been an electrical nightmare. Tiny gauge wires carrying too much voltage, plastic throw away wiring harnesses right next to the turbo, nothing is built to last more than 5 years with normal hd usage.  Dodge, here I Cummins!

bamawatson's picture

sir, i post the following respectfully, i have previously posted pic of 1979 buick ( a GM product when America was America). When i posted pic previously it was basically to say 'dig me". Now i post these to convey factual info.

https://get.google.com/albumarchive/109720747160469133931/album/AF1QipNRPUXrZTye2n2pVSpGFvY5F5uo-o1tyPEM_ieg/AF1QipOXzPeAboP-OvU61CB37wMI-TMH74hPGkg_ScWr

https://get.google.com/albumarchive/109720747160469133931/album/AF1QipN-K167cHM2V0l4tXEIYZhWWH1JbnoveVcKs9rL/AF1QipOhR4_FLqxOx3ZGK9r84EVEot7vUMQ4ZIsMIIVz

i bought each of these vehicles from original owners. Metal bumpers,  carburetors -- No freakin stupid ass fuel injectors, REAR wheel drive....; the buick has ZERO fuggin computers.

the 83 oldsmobile custom cruisor has 340,000 miles n i would drive it to california today, all 5,200 pounds of it ( no i wouldn't because i would not go to california )

the buick cost me $4,000 in dec 07

the olds cost me $3,900 in sept 05

anyone with dirty fingernails can repair any problem with either vehicle

i truly do not understand the world today

Endgame Napoleon's picture

Why should they do that when another round of tax cuts, which are actually just more cash welfare for those who have reproduced in cases where the "tax cut" is called a "tax credit," are always around the corner, further rigging the employment system, like the current free rent, free food and Child Tax Credits between $3,337--$6,269. Some of the proceeds from the sex-and-reproduction rewards handed to select citizens and noncitizens end up changing hands at the car lots. Cars are one of the only big household expenses not yet financed for single-earner parents by Uncle Sammy and the US Treasury Department.

Creative_Destruct's picture

"....an electrical nightmare."

All too typical of virtually ALL GM makes... They have given the old English makes a run for their money in the electrical defects area.

I will NEVER buy a GM of any make again, EXCEPT maybe the old ones, as 'Bama points out... newer ones:GAWDAWFUL electrical systems.


Falling Down's picture

Ever since they spun off their electrical stuff to Delphi 20 years ago, it's been a downward slide for GM on the electrical engineering front. I've one new GM vehicle, 15+ years ago, and true to form the blower motor resistor took a crap on it, and it was a nightmare to get to.

Newer GM vehicles are way worse.

I troubleshit a Mini Cooper's electrical issues 7 years ago for a friend's wife. Their systems are made by Delphi, too, and are absolutely horrid. We pieced together used parts from Ebay and a car at a yard to get the POS back on the road. I absolutely hate Minis, now.

Newer vehicles are a crapshoot when it coems to electrical, better to do research on them, first.

My'92 Chrysler and '04 Grand Cherokee str. 6 are still chugging along.

 

playit's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobproplan.com

j0nx's picture

Don't hold your breath. Dealers are sitting firm on prices. I've tried to make deals with them and they are not interested.

Haus-Targaryen's picture

Wait till credit markets sieze.  

Average American only has what $500 in savings?  Odds of that getting spent on a new car?  Zero. 

Maybe $5k was too "expensive" 

playit's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobproplan.com

El Oregonian's picture

Shut up playit, you f'ing moron. the only link you are notable for is being the missing link. Beat it.

EddieLomax's picture

Warning : the link has lots of pictures of him sucking cocks.

gilhgvc's picture

I am upvoting out of trust...cause I ain't looking at no links.....

Creative_Destruct's picture

Exactly. Too early. These things will either be recycled or virtually given away.

Endgame Napoleon's picture

Single momma has the following:

1) Her wages in momma-clique jobs that she (and other crony moms) dominate despite frequent and dramatic, excused absenteeism

2) No housing expense or rent reduced per child in a safe, nice, "mixed-income" unit in a middle-class area

3) No food expense

4) No electricity expense

5) Monthly cash assistance

6) Her boyfriend's untraceable income

7) Daycare that is mostly covered by taxpayers

8) Child "Tax" Credit between $3,337--$6,269 each April, even though she does not pay income taxes

9) Help from grandparents with grandbaby fever who often, in fact, pay for her car

10) Charitable giving, which is mostly directed at struggling working families

She's got the money, much more so than the childless employees who must cover all expenses, including skyrocketing rent, from low wages designed to be acceptable to moms whose major bills are paid more by taxpayers with every child they birth and to moms with spousal income that covers their major bills.

Market your cars to those who are paid for having sex and reproducing for the motherland.

ipso_facto's picture

'Market your cars to those who are paid for having sex and reproducing for the motherland.'

We need people who are net productive.

slyder wood's picture

You're right. Fair discounts on loaded up vehicles but basic cars and trucks not much give.

vealparm's picture

Best time to buy a car is late on Saturday about a 1/2 hour before the dealer is about to close or on the last day of the month, again just before they are ready to close. The salesmen , managers and the dealer are/is desperate.

Hal n back's picture

I might buy a corvette if the price is discounted  40%-, zero down and zero% for 10 years.

Nobody For President's picture

I can't figure out why anybody downvoted you, that was funnier than hell.

All those bemoth road hogs!

The Good Ole Days indeed!

Canoe in the Desert's picture

I think a white belt & shoes, ten-gallon hat and some rolled weed would complete the image.

Alex Droog's picture

This is Trump's car lot now. Good luck.

Schmuck Raker's picture

Oh goody, I can't wait to bail them out again.

Creative_Destruct's picture

Ye Olde Channel Stuiffing trick eh? This is a recurring popular trick that seems to surface en masse near the end of a near-spent economic bubble expansion.

And we will indeed be bailing these ethically bankrupt, wealthy coprorate exec crooks out again....

Moral: If your gonna be a criminal... wear a white collar.

 

GodHelpAmerica's picture

Biggest, bubble in our lifetimes.

2ndamendment's picture

I don't know, the student loan bubble is looking pretty enormous and scary right now, too!

pigpen's picture

Won't buy a new car until they give away EVs. As long as VCs keep subsidizing ride share, no reason to own car in major cities.
Use brave browser or ublock origin to destroy Goobook.
Cheers,
Pigpen

hongdo's picture

Hey, thanks for the brave and ublock tips.  I'm giving them a try.  Doesn't look like ublock works on brave though.  I've been using ixquick and ghostery and adblock.

NoWayJose's picture

They tried Mary Barra. And Yogi Berra is unavailable. Maybe it's time for Yogi Bear to take over. Eh, Boo Boo?

He's smarter than the average Barra!

Atomizer's picture

Elmo has the limelight now.

Atomizer's picture

Obama's cash for GM trash stimulus plan. 

NoWayJose's picture

Most Chevy dealers have their lots stuffed with $55,000 pickup trucks.

Atomizer's picture

But, but.. you can nearly clear a $10,000 rebate to drive home today. What irony. 

retired dude's picture

I look occasionally look at those new 55K pickups, but my 20 year old Chevy half-ton 4x4 gets along just fine and I really do not want a new truck.

Atomizer's picture

I always chuckle when the not actors GM commercial appears. Everyone is drooling over a 2017 Pontiac Aztek


spastic_colon's picture

i especially love the "real people not actors" disclaimer at the bottom.................at least they acknowledge that actors aren't real people.

bamawatson's picture

have to be an accomplished actor to drool over an AzteK

Atomizer's picture

We need our actor in chief Obama, glamourize GM like the Chevy Volt. 

Hahahaha 

kentek's picture

Dealer lots full of cars can't compare to the number of cars parked at Camarillo CA airport. There must be 10K # of Kias sitting in the sun.

Atomizer's picture

Low milage and peeling sun dashboards. Old video haven't used it in ages. Enjoy. 

KIA car commercial parody - YouTube

sinbad2's picture

Free upgrade, hand in your 2010 to 2016 model Chev, and get a new one absolutely free.

blown income's picture

Went to Porter,Texas this past Thursday , from Lafayette , la ...GOOD GOD!  The sheer number of cars on ALL the dealer lots is just staggering!

 

It's like carpet bombing!! with vehicles!! 

 

That huge Richie Bros. auction lot with the equipment ...WOW!! just stuffed with heavy equipment!

 

The end of model year sales this year will be EPIC!!!!!

 

 

Guderian's picture

Gotta get dem under-sub leases activated!

"You had a job once? Qualify!"

"You outta jail soon (or hopin to)? Qualify!"

"Y'all gots regoolur incum (say, EBT)? Qualify!"

I can see dem cruisin wid dem shiny rimmmmms!

Dilluminati's picture

I actually bought a car this weekend a Hyundai Accent and paid 12K for it new.  We got the $400 recent grad and took the $2000 cash back for sucker financing at 5.99%.  $9,625 MSRP $17,605  (gets even better I put down 2K on discover) which I pay in full.  I will pay the 1st month and all but one payment, and $50 left to balance third month.  That way the title comes through clean.   Not a great car, but with the warranty and at that cost?  Seriously, thinking of getting two.


https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=...

After all the legal weasel you can still get the car new no trade-in for 12K.  I'm seeing them even cheaper in Texas and considering buying TWO!

Canoe in the Desert's picture

While it could be dealers stocking up before summer plant shut downs & model change, the economy is not as robust in all areas as some would have you think. It took 9 years to put us in this craptacular economy. It won't rebound overnight. President Trump is on the right track for improving the regulatory environment for small business (they buy a LOT of vehicles collectively). Rescind Obamacare. a small business job killer. Fix the tax code.

 

By the way - the GM dealers or their finance sources own those inventory cars. GM bills them to the dealers as soon as they leave the factory.