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Delivery of very profitable GM pickups at historically low levels



Duncan Aldred, Vice President of Buick GMC Sales for General Motors Co., speaks next to a GMC Sierra Denali HD truck that was shown during an event in Chula Vista, California, USA, on Tuesday, January 22, 2019 .

Sandy Huffaker | Bloomberg via Getty Images

Deliveries of highly profitable pickups from General Motors are at historically low levels months after the company restarted production following a nationwide shutdown of the plant in the spring due to the coronavirus pandemic.

Deliveries of GMC Sierra pickups at dealer lots are 20 days or less compared to a typical delivery of 75 days to 90 days, according to Duncan Aldred, head of the GMC truck brand. He attributed the low supply to continued demand for pickups throughout the coronavirus pandemic despite shutdowns.

“We continue to sell faster than we build,”

; he told reporters this week. “It’s not a comment on the construction plan, it’s a comment on how fast we sell them.”

The facilities building the vehicles in the United States and Mexico were shut down for about two months in the spring due to the coronavirus pandemic. The pandemic was another blow to the company’s production and inventory following a 40-day UAW strike that ended in October.

While low supplies generally mean higher transaction prices and profits, they can also burden the retailer’s operations and cause them to lose customers due to longer wait times or models that are not available at purchase. Other automakers with higher inventory levels may also offer better deals to entice customers.

Aldred said this is not the case for GMC Sierra, saying the brand has “its highest segment share in recent history” despite its “lowest inventory in history.” He also noted that Sierra light and larger heavy models have the highest average transaction prices of $ 47,500 and more than $ 65,000, respectively.

But dealers such as The Gulf Coast Chevrolet Buick GMC in Texas – America’s best-selling truck market – needs more pickups on their lots. Craig DeSerf, CEO of the retailer, said pickups typically account for 75% of his inventory. They are now only 25%.

“Out here, south of Houston, it’s truck land. That’s all we do,” he said. “This is land for pickup truck, big time.”

DeSerf said some people get upset that there is no stock, but it’s still better than having too much from a business standpoint. “Not to be greedy, it’s better this way than the other way around,” he said.

Heading into Labor Day weekend, a significant sales time for dealers, JD Power reports that there were just over 500,000 pickups at dealer lots. That’s compared to 900,000 who came in last September after the Labor Day sales weekend.

2021 GMC Sierra HD pickup

GM

Pickup sales have been relatively resilient this year despite the pandemic. Sales of full-size pickups like the Sierra models are just under 8.8% through August in the US, according to Edmunds, who said the overall market was down 22%.

The retail level or for individual consumers is even narrower. JD Power reports that retail sales are only less than 3.5% through August, while the rest of the industry is at 18.9%.

Most GMC pickups are sold to customers before arriving at dealer lots, according to Aldred.

“I do not know if that is the case in the whole industry, but it is certainly with us,” he said. “My challenge is to keep selling them faster than production can ever build them. Something nice, healthy competition there. We will never let go of gasoline.”

Supplies for the Chevrolet Silverado – Sierra’s pickup siblings under GM – are 26 days or less, according to GM.


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