General Motors is Quickly Reducing its Backlog of Parked Pickup Trucks Due to Semiconductor Shortages
Automaker General Motors is expediting deliveries of full-size pickups that were parked due to the ongoing chip shortages that are affecting auto production around the world. The company was forced to park thousands of pickup trucks until it could obtain the semiconductor chips to finish their final assembly before shipping them off to dealers and delivered to customers.
Speaking at the Reuters Events Automotive Summit, GM's North American chief executive Steve Carlisle said the automaker is more than halfway through shipping its newly assembled backlog of pickups that were parked and awaiting shipment to dealers, Reuters reported on Friday.
"We've made great progress," said Carlisle. "We're a bit better than halfway through that at the moment and our goal would be to clear out our '21 model years by the end of the year. We'll have a bit of a tail of '22 model years into the new year but not for too long."
To help expedite shipments of the newly built trucks to dealers, Carlisle said the automaker bought a number of car haulers to deliver the trucks from GM's factories or distribution centers. GM has even allowed dealers to pick the vehicles up themselves in some locations to help get the trucks to customers more quickly.
GM managed to ship roughly 68,000 pickup trucks to dealers in Q3 that were held at its assembly plants due to semiconductor supply issues.
Carlisle also said at the event that new vehicle inventories have shrunk to below 20 days in the U.S. due to the supply chain disruptions. GM is hoping to increase its inventories back up to 30 to 45 days and as high as 60 days for some product lines.
GM said earlier this month that dealer inventory, including in-transit units, was 128,757 at the end of the third quarter.
Earlier this month when GM announced its Q3 earning, the automaker informed investors that its wholesale volumes in North America in the second half of 2021 would be down about 200,000 units from the first half, largely because of supply chain disruptions in Malaysia caused by COVID-19 shutdowns. GM said that most of this impact would be felt in Q3.
However, GM's retail share of the full-size pickup segment grew more than 2 percentage points in the third quarter, with the Chevrolet Silverado and GMC Sierra reaching a combined 38% share.
Despite chip shortages, GM sold more full-size pickups than any other automaker calendar year to date. GM reported that its fleet sales of full-size pickup trucks were up 13% in Q3. YTD sales of full-size SUVs to fleet customers is up 89%, with Chevrolet Tahoe Police Pursuit Vehicle up 86%.
GM counts on full-size pickup and SUVs sales for a majority of its profits and the company has prioritized the production of some models to meet demand.
Almost seven in 10 customers in the full-size SUV segment purchased a Chevrolet Tahoe, Chevrolet Suburban or GMC Yukon in 2021. Sales of the Chevy Suburban SUV for example, are up 28% YTD. While sales of the GMC Yukon are up 24% YoY.
The brisk sales of expensive trucks is helping to maximize GM's profits for the year. GM's average transaction price was $47,467 during the third quarter and that has helped boost the company's bottom line.
GM stock was trading at $58.00 on Friday, up 43.17% year to date.
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