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Chevrolet GMC and Ram Dealerships Fear The Possibility Of Running Out Of New Pickups

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With the COVID-19 pandemic still creating un-forseen levels of havoc and economic damage across a wide swath of industries, an unexpected side affect has emerged, with the crisis shining a spotlight on a rather interesting problem that is plaguing Ram, GMC, and Chevrolet dealers: They are running out of pickups to sell.

 Supplies are rapidly running out, and with the factories for the Detroit Big 3 still remaining closed due to various stay at home orders in a huge swath of manufacturing states, there isn’t any inventory trickling in to balance the levels of product leaving holding lots. Dealerships across the country rapidly increased incentives back in March in an attempt to lure buyers in. Others even launched online sales channels, and expanded their digital business footprint to try and adapt to the new normal. Despite this, sales for April still plunged downwards, with in-demand vehicles like pickups still seeing strong levels of demand. 

However, this level of demand is placing a great strain on an already tight supply line with Michael Maroone (CEO of the dealer group Maroone USA) revealing in an interview with Automotive News that “the pipeline is very dry.” He elaborated further, revealing that his Chevrolet stores are currently sitting on a 30 day supply of Silverados and “That is a problem for us” he revealed. This problem is amplified further when one considers that the Silverado is still one of the strongest selling vehicles in America, and that many other dealerships are chomping at the bit to get whatever inventory they can.

 

This drive to get ahead of the game also further compounds an already weak inventory pool for General Motors dealerships which were still recovering from the impact of the 40 day UAW worker strike in 2019 that effectively paralyzed the automaker, and forced many operations to enter the new year with thinner than planned inventory of key models. Ram has not been affected by a strike, but it has relied on generous incentive offers to move Ram trucks off dealer showrooms, with Ford opting to do a less expansive incentive campaign that only covered 2019 model year offerings. The inventory levels nationwide differ of course, but the numbers are still sobering, with the national average for the Silverado being a rather meager 82 day supply in March of 2020 (down from 120 during the same time in 2019.) Ram and Ford stores are slightly better in this regard, with the two boasting a 114 and 111 day supply of Ram 1500s and F-150’s respectively. In the case of Ford, that 111 day supply number for 2020 is an improvement over March 2019, with Ford stores having to grapple with a scant 84 day supply of trucks to work with. 

 

But while the near term is very bleak, all is not lost, with Automotive News revealing that a complete drought is not in sight for the for-seeable future. The publication states that while light duty pickup inventory could fall to 400,000 units in May and then to 260,000 units in June, the sharp drop over 2019 figures masks the fact that there will still be close to a quarter of a million trucks to choose from. Certain colors, trim levels, and popular option setups will be more difficult to find, but dealerships suspect that this will lead to a higher number of special orders, and in turn increased demand as a result. This would coincide with a projected increase in light pickup inventory levels, especially in June if production ramps up during the middle half of May. 

 

Despite the lingering risk of an economic recession as well as a continued increase in Americans filing for unemployment, many dealerships are still optimistic about the chances of recovery in the market place once the pandemic subsides.

“Demand is back,” stated Maroone “I think this is going to be a good sales period if we can get the product.”

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