I wonder if the average dolt realizes that when GM reports sales, they are really reporting sales to their dealers. It’s called channel stuffing. Thank God Obama saved this wonderful company.
GM Channel Stuffing WTF!?
Submitted by Tyler Durdenon 12/03/2012 11:10 -0500
Those who have been reading our 2+ year series tracking the ridiculous “bottom-left to top-right” trend in GM dealer inventory channel stuffing, know all there is to know about the modern day equivalent of AOL (in which the purchases of modern equivalents of “dial up connections” are funded by loans from the US government itself), in both (non government backstopped) business continuity terms as well as in channel stuffing notoriety. Which is why we will present the November update of total dealer “inventory” (which rose to a record for the fresh-start company 788,194, or a record 99K increase in two months) a without commentary, except to say: WTF!?
Source: GM
TeresaE says:
Oh come now!
When GM, Ford or Chrysler shove vehicles onto dealer’s lots (and the rented parking lots of closed down businesses), it is GOOD for the economy.
My business has improved with the “improvement” in dealer cars on the lots.
Come December 31 many of these lots are going to have to pay taxes on their inventory.
Wonder how many more months the car makers will be able to convince their remaining dealers to eat the carrying costs (of course I am assuming that said dealers don’t have sweetheart deals with the tax man that negates these real business expenses) to continue to myth of “higher” sales?
Even though my personal livelihood 100% depends on this continuing, I’m not real optimistic that it will.
Merry freakin’ Christmas!
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3rd December 2012 at 12:35 pm
JIMSKI says:
Channel stuffing is how the missus and I got a 30K turbo 4 WD SUV that runs on newborn baby blood and has unicorn leather seats heated with governmental promises financed at 1.9%
My shop works on cars. We have too much work. People who are have jobs are not buying new stuff and keep having us repair and maintain old stuff. A 10K used car is 2008′s 3 k car. The best price reduction is in the high end market. We have the automotive equivalent of a space shuttle in the shop right now. A 2004 BMW 760IL. V12 5 passenger super car sold new for $110,000. Guy bought it with 87,000 miles for 18,000 bucks. HAHAHAHAHAHAHAHAHAHA idiot. Your budget better include 5K a year to keep it on the road.
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3rd December 2012 at 12:45 pm
AWD says:
Toyota announced a 15% jump in sales, which corresponds to all the new Toyotas and Lexus’ you see on the road, thousands of ‘em.
In the old days (ten years ago), geezers used to buy American cars, Buicks and Cadillacs, Chevy and Ford. Older Americans knew it was important to “buy American”, for the very survival of our country. Not anymore, every geezer you see is proudly driving a Toyota now. It happened after GM got bailed out, taken over by the government. GM’s core base shifted, especially geezers. And at the same time, the good ‘ol boys, red necks and farmers started jumping ship from American trucks to Japanese/Toyota Tundras. It’s game over. They might as well shut down now.
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3rd December 2012 at 12:51 pm
fool on the hill says:
Aw c-mon GM stands behind their Heartbeat crap.
So far behind you cant get there in that junk.
I drive an American made pickup………………………………………………A TOYOTA !
Twice as American as a Ford F 150.
Had a Ford once, don’t recommend them.
I like a little kissin’ with my screwing.
Speaking of kissing I have a new lady who, like me has a tin knee.
This makes her run in large circles so I have worked out that getting a kiss is like hunting cottontail rabbits.
Just wait for her to come by and take a shot
.
“A story about rabbits that doesn’t mention their habits.” Ogden Nash
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3rd December 2012 at 1:04 pm
AWD says:
fool on the hill
A fool alright. That’s exactly how they got the “buy American” idiot rednecks, bubbas and everyone else that must have a pick-up to buy Toyotas. The profit margin for light pick-ups is almost 50%, which is shipped back to Japan dumbass, along with $500 billion a year out of the U.S. We’re finished, the propaganda has worked wonderfully, there are more idiots in this country than people with an I.Q. higher than 50.
Hot debate. What do you think?
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3rd December 2012 at 1:16 pm
Appalachian Trail Deblazer says:
Local Chevy / Cadillac dealer is adding extra show room area to their dealership, the new car & truck is full. They have American Flags every where.
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3rd December 2012 at 1:34 pm
Stucky says:
Companies selling to themselves …. hahahaha!
Isn’t that, like, Corporate Masturbation? I tried to find a picture with that theme in mind.
This is the best I could find.
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3rd December 2012 at 1:39 pm
youcanthavemyglock says:
GM actually makes very good cars now, once they roll out 2014 Silverado/Tahoe/Suburban things will get much better, an all new 2014 Corvette should also lure some people into dealerships which will spike the sales of something they can actually afford, like Cruze or Malibu, but yeah Unions suck…
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3rd December 2012 at 1:55 pm
Wyoming Mike says:
My 5 year old malibu has a “glitch” where the power steering cuts out at random. Yup, GM actually makes good cars now. LMAO! I’m sure they’re much better under Obama than they were as a private company, the government ALWAYS improves everything they touch.
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3rd December 2012 at 2:19 pm
youcanthavemyglock says:
Wyoming Mike, by good cars I meant 2011+, not to say before that they didn’t make any good ones but right now their line up is very competitive with exception of a few models which are about to be replaced anyways such as Impala, full size trucks and suvs. The government owns them now but they didn’t replace GM scientists, engineers and designers with government drones.
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3rd December 2012 at 2:46 pm
ecliptix543 says:
GM can suck my sweaty balls. I went in to Jacksonville a couple days ago and saw this ‘thing’ coming up in the right lane on the 9A loop.., It was seriously booger green, looked like a Prius that has spongiform encephalopathy, all the proportions were all screwed up, and all I could make out as an identifying feature was the enormous plastic bowtie on the front. As it passed, I got a good look at the mongoloid metrosexual dillhole driving it…. I’d shoot myself before I’d be seen in – much less pay for – the all new 2012 Chevy Spark.
Spark a couple of kielbasa farts. You’ll get more accomplished.
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3rd December 2012 at 3:16 pm
ecliptix543 says:
Yeah.. this fucking thing..
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3rd December 2012 at 3:19 pm
AWD says:
ecliptix543
That’s what happens when you have affirmative-action hired group-think public school educated morons design cars
Looks kinda like the one Homer Simpson designed:
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3rd December 2012 at 3:35 pm
TeresaE says:
youcanthavemyglock says:
Wyoming Mike, by good cars I meant 2011+, not to say before that they didn’t make any good ones but right now their line up is very competitive with exception of a few models which are about to be replaced anyways such as Impala, full size trucks and suvs. The government owns them now but they didn’t replace GM scientists, engineers and designers with government drones.
You are right YCHMG, they didn’t replace them with “government” drones, they used government money (yours) to replace them with Asians! And gifted most of the Asian government 51% ownership.
The only question I have is with the reduced wages PLUS loss of full time jobs with benes, how many cars are they selling that the customers can actually afford?
Pound the I’m Supporting America drum all you want, truth is the Toyota Camry is more American made and buying from GM is supporting both the government and the unions that have banded together to wipe us non-government, non-union, out.
That isn’t supporting “America,” it IS supporting the “change” O believes in.
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3rd December 2012 at 3:49 pm
ecliptix543 says:
I bet Homer’s car has a keg and a toilet in it though. That’s convenience.
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3rd December 2012 at 3:55 pm
Eddie says:
Toyota and GM are both multinational companies that fuck over citizens of all nations separately but not necessarily equally..
I read that GM sold more cars in China than in the U. S. in 2011. They have a car they can sell there for something like $2500.
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3rd December 2012 at 5:03 pm
Novista says:
AWD, fuckhead
Your xenophobia blinds you to how the system works. What do you think Japan does with all those lovely dollars that land there? They buy treasuries, so close behind China they might be ahead in a month or two.
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3rd December 2012 at 9:06 pm
AKAnon says:
Ecliptix-Holy shit, that thing is hideous. I didn’t think anyone could beat the Cube for ugly, but I was wrong. Although, you could paint a Cube brown and label it UPS. No wonder they paint the Spark booger green.
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3rd December 2012 at 9:51 pm
AKAnon says:
I remember when NASCAR (yes, I used to watch NASCAR-eat yer fucking heart out, Cuntsler) allowed Toyota to field entries. Also NHRA bringing on Toyota bodies in Funny Car. For those not into motorsports, none of these vehicles contain ANY component actually made by the parent company, except possibly the brand decal. At one point in history (when racing was one helluva a lot more interesting) the race cars were based on real production cars. But that was a long time ago-now they are simply billboards for endorsing products and brands. Toyota’s efforts were rewarded by subverting any residual “buy American” bias from the rednecks who follow the sports.
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3rd December 2012 at 10:01 pm
Ron says:
Everyone wanting to drive big trucks that suck a lot of gas.A good example of how smart everyone is. I look around at people who dont work and look like street folk.And theyre driving a new car.
Lots of repo work in the future.
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3rd December 2012 at 10:08 pm
printmemoney says:
These dealers should run into cash flow problems if this stuffing really excessive.
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3rd December 2012 at 10:35 pm
Scott says:
AWD
My next door neighbor who is 84, traded in his newer Mercury Grand Marquis LS for a brand new Toyota Camry XLE V6 just so he could keep up with all his old geezer golfing buddies. I also see a lot of geezers driving Toyotas in the Cincinnati area where I live. Also around this area there are a lot of Chevrolet dealerships getting face lifts, a lot of expansion, newer bigger showrooms and stuffed full of cars and trucks to sell. It’s like any moment now they are going to start selling a lot of vehicles. I just don’t see it happening.
I agree with your comment It’s game over. They will do well in China where they now sell more cars than here in the states. Might as well shut down here. Last one out the door turn out the lights. By the way, I drive a 2010 Toyota Tundra.
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3rd December 2012 at 10:37 pm
ditchner says:
Boomer with a Leaf
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3rd December 2012 at 2:16 am
Administrator says:
Mainstream Media Finally Reports On GM’s Channel Stuffing Scandal
Submitted by Tyler Durden on 12/05/2012 08:13 -0500
Yet another story we have been following for nearly two years (and here) has finally migrated over to the Mainstream Media as attempts to hush it down before it become painfully obvious and problematic, have failed miserably. The WSJ writes that “Detroit auto makers are piling up big stocks of passenger cars at dealers despite brisk new-vehicle sales in the U.S.—a problem that executives vowed to avoid since their painful downturn three years ago.”
WSJ continues:
General Motors Co. GM -0.39% ended November with enough Malibu sedans and Camaro sports cars to last more than five months at the current rate of sales. Ford Motor Co. F -0.88% had more than four months’ worth of Fiesta subcompacts and Chrysler Group LLC had a nearly six month stock of its 2013 Dodge Dart.
It’s an abrupt reversal from a year ago. In 2011, U.S. auto makers’ market shares, especially in compact cars, soared as gasoline prices jumped and Japanese auto makers struggled with back-to-back natural disasters. This year, production at Toyota Motor Corp. 7203.TO -0.28% and Honda Motor Co. 7267.TO -0.66% came roaring back. Both began offering deeper sales incentives, something they hadn’t done for many years. That has the Detroit Three in a quandary: Do they cut production or match incentives?
“They [the Japanese auto makers] really had to get aggressive about getting their market share back and maybe that did catch some by surprise or even flat-footed,” said Edmunds.com automotive analyst Michelle Krebs. Toyota and Honda “have a lot of zero-percent financing” rates.
“Look at the ads, you see a lot of zero, zero, zero,” she said. Edmunds.com also estimates that 38% of Toyota-financed sales last month carried interest-free loan rates.
…
GM also miscalculated demand for its pickup trucks. The industry norm for U.S. auto makers is between 60 days and 70 days of sales in inventory. GM had 138 days worth of Chevrolet Silverados at the start of this month. In passenger cars, its Chevrolet Cruze inventory jumped to 64,390 vehicles or 96 days. One of the two plants that GM will idle this month produces the Cruze.
“We thought the economy would have been further along at this point but as we look into December and 2013, we will get a tailwind from housing which benefits not only autos but the entire economy,” said GM spokesman Jim Cain. “The one thing we won’t do is commit the sins of the past and lose our discipline around rental cars and incentives. Our competitors may be doing it, but we have come too far to go backward and do something that may hurt our brands.”
In other words: the disconnect between reality and hope has struck once more, and sadly for the optimists and those who specialize in budgeting hockeysticks, reality wins once again.
The WSJ does add some incremental value by observing the substantial, margin collapsing rebates all carmakers are forced to provide just to get inventory out of the door:
Toyota’s average incentive per vehicle rose to $2,075 in November from $1,717 in January, according to automotive tracking firm TrueCar.com. Zero percent interest rates aren’t counted in TrueCar’s incentives tally.
Honda, meanwhile, has increased its average incentive to $2,428 from $1,978 in February despite releasing new versions of its top selling cars in the past year. The largest incentives offered in the U.S. last month were from Japan’s Nissan Motor Co., 7201.TO +0.39% whose Altima has become a top selling sedan. Its average jumped to $4,273 a vehicle last month from $2,764 in January.
That is not to say the U.S. auto makers aren’t also using incentives. Ford now offers as much as $2,895 off its 2013 Focus sedan, which had only two months’ of inventory to start the month. Fiat SpA’s F.MI -0.51% Chrysler has offered up to $5,000 off its Ram pickups, which had 3.5 months of inventory to start the month. GM has recently offered between $2,900 and $3,500 in average incentives for its vehicles, according to Truecar.com.
In conclusion:
Producing too many cars and trucks is a problem the U.S. auto makers have wrestled with since the late 1970s. To keep their factories humming, GM, Ford and Chrysler would build vehicles and stock them at pop-up parking lots created on vacant land throughout the Detroit area. When the stocks grew onerous, they would unleash heavy incentives that eroded profitability and brand image.
Today, all three face tough decisions on cutting production or profitability as inventories have soared. Ford, for instance, finished November with 18,336 unsold Fiestas, or 124 days worth of supply, compared with 96 days in October.
The Dart, Chrysler’s most important new offering of the year and its first compact sedan since 2005, began December with a 173 day supply. Sales of the Dart slipped in November compared with the previous two months.
And the punchline: all this is happening even as captive lending units, either standalone or government owned (ahem Ally, aka soon to be fully-GMAC once more) are lending money hand over fist to anything with a pulse as LTVs are back over 100% once more, and the average FiCo score of car loan borrowers is now arguably lower than where it was back in 2007.
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3rd December 2012 at 11:33 am
TJF says:
I just saw a tv commercial for a local dealer which claims to have over 300 2012 Chevy Silvarado trucks all at “year-end close out pricing”.
What a great time to save. Obama certainly ‘saved’ the auto industry.. Lol.
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3rd December 2012 at 1:09 pm
Eddie says:
Friend of mine just bought a Silverado. 10K off sticker and 13K allowed on his 5Y.O. high mileage trade. That’s 23K off of a 51K sticker price. The dealers are falling all over themselves to make a sale.
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3rd December 2012 at 1:22 pm