An auto industry analyst believes GM – and the Fort Wayne Truck Assembly Plant in particular – will fare well even if vehicles aren’t exactly flying off lots right now.
General Motors Co. is preparing facilities to begin producing new truck designs, so the company wants to ensure it has enough inventory for customers during the changeover. Some dealers, however, are worried that a glut of unsold vehicles will result, but Sean McAlinden doubts that.
McAlinden is executive vice president of research and chief economist at the Center for Automotive Research, a not-for-profit institute in Ann Arbor, Mich.
“If there is a dealer that thinks he can’t sell the trucks, I’m sure there will be other dealers that would be more than happy to take them off his hands,” McAlinden said. “If he can’t sell a GM truck, then he must be stuck in a Ford town.”
With U.S. auto sales enjoying their best year since 2007, GM hasn’t been able to boost its shares. Some critics believe it’s because some dealerships are overstocked with trucks.
GM said it entered July with more than five months’ supply of full-size pickups, the most since April 2009, according to researcher Ward’s Auto.
McAlinden said the automaker has been boosting inventory to make up for production halts at its four full-size truck plants for a combined 29 weeks.
The goal is to prepare to make redesigned pickups that go on sale next year.
“During the (bailout period) GM stopped product development on everything except the Chevy Volt,” he said. “They got behind and are playing catch-up now. The Ford F-150 is still king of the hill.”
The Fort Wayne truck plant makes the Chevrolet Silverado and GMC Sierra. The 2013 bi-fuel Chevrolet Silverado and GMC Sierra 2500 heavy-duty extended-cab pickup trucks will be built at the Allen County plant, which already is undergoing a $275 million equipment and construction upgrade.
“Those trucks will have better fuel economy and a new style,” McAlinden said. “It’s a very competitive market.”
U.S. light-vehicle sales probably rose 11 percent in July to 1.17 million, the average estimate of 11 analysts, a Bloomberg News survey revealed. Industrywide deliveries climbed 15 percent in 2012’s first six months to 7.27 million, according to Autodata Corp.
Officials at Summit City Chevrolet in Fort Wayne remain optimistic.
“We’re fine,” said Jeff Franke, sales manager. “We’re doing good.”
In Kendallville, a $1.3 million renovation continues at Shepherd Chevrolet Buick GMC. The dealership acquired cross-town rival Noble Chevrolet last fall, allowing the business to sell both of GM’s popular trucks.
“It’s been a bit rough lately, but that’s mostly because of the construction and the heat,” said Jeff Stork, business manager for the dealer. “We sold 64 trucks last year; we’ll be well above that this year.”
Bloomberg News contributed to this story.