“We’re not going to run big incentives to clear inventory,” Reuss said at the Detroit Regional Chamber’s Mackinac Policy Conference on Mackinac Island in northern Michigan. “We’ll adjust inventory on a production basis.”
At the end of May, General Motors had 288,000 trucks in inventory, including 110 days of supply for the larger models, according to Don Johnson, GM’s vice president of U.S. sales. The industry standard in the US sits at 60 days, but many automakers are well below that due to a surge in demand seen in recent months.
The General’s deliveries fell 1.2 percent to 221,192 vehicles in May, while Johnson said GM is “not anticipating tremendous growth” in the truck segment, sales may rebound in the second half of 2011 due to seasonal changes to the market and pent-up demand.
If sales don’t start to pick up in the second half, “the risk steadily increases that GM will have to raise incentives on these vehicles in order to clear inventories,” Peter Nesvold, a Jefferies & Co. analyst, wrote in research note yesterday, according to Bloomberg news.
Despite these market setbacks, GM is also considering buying back some of the 33 percent stake that the US Treasury Department currently has in the automaker.
The Detroit carmaker is offering deductions of up to $4,505 as well as interest-free financing for as long as 60 months on Chevrolet Silverado and the GMC Sierra pickup. The trucks also have reduced-rate financing of as low as 0.9 percent for 72 months, according to AIS Rebates, a Michigan-based provider of incentive data.
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