GM Slashes Production To Amid Rising Inventories
Northern, WI 02/04/2013 (avauncer) - A 24% rise in pickup inventories forced General Motors Co. (NYSE:GM) to plan a 10 week downtime in truck production..
Ina telephonic interview, Jim Cain of GM said, “GM has a total of 117-day supply of trucks on hand at the end of January. A month back, it was 80. The 10 week sabbatical is needed for the three pickup plants of GM to allow for this changeover.”
The Detroit-based automotive concern has an old habit of discounting vehicles in its effort to boost sales. However, this has often resulted in hurting the brand image and resale values. Now, high inventory levels are testing its firm resolve to not go back to its old ways. For now, the company has to keep its focus on balancing the production of older versions of the trucks, so that they are available as required. At the same time, they should not be so many, that it limits the rolling out of the newer versions.
Kurt McNeil, vice president of sales, said, “Right now, we feel pretty good about our position in the market.”
At the end of January, General Motors Co. (NYSE:GM) had a pickup inventory of 234,342. That is 5.7% more than at the end of December. The company had planned to end 2012 with 200,000 to 220,000 pickups in inventory.
Rod Lache, an analyst with Deutsche Bank has recommended buying of the General Motors Co. (NYSE:GM) share. According to him, the company’s stock is on the move due to its pickup inventory report at the end of every month.
Beating the estimates, Total sales of General Motors Co. (NYSE:GM) in the U.S., in the month of January climbed 16 percent.
As an incentive to customers, General Motors Co. (NYSE:GM) announced a two-year free maintenance for the February purchase of the 2013 Siera 1500.
Alan Batey, vice president of sales, said, “Some downtime should be expected as we build newer versions of the truck. Thankfully, things are turning out as they were expected to, though sometimes the inventory may rise or fall.”
The shares of General Motors Co., (NYSE:GM) were down by 0.43% and currently trading at $28.05.