If you wondered why the GM vehicle you ordered hasn’t arrived, or why there are empty dealer lots, we might have your answer. According to the manufacturer, there are almost 100,000 new GM vehicles sitting around assembly plants waiting for parts. From its regulatory filing today, most of these sitting GM cars and trucks were built within the last month.
Is GM losing money?
From April through June, that amounts to 16 percent of GM sales, based on it selling 582,000 in that period. That is a 15 percent drop from a year ago. But the figure represents around $2.5 billion that GM made in the second quarter of 2022 based on Refinitiv data. So GM is selling fewer cars but seeing record profits.
It also means that prices for new vehicles from GM and other manufacturers are sky-high. And it is slowly reshaping how vehicles are sold, as most buyers have to order without cars and trucks on dealer’s lots. Around four million vehicles are normally sitting in dealerships waiting for buyers. Today, there are roughly one million or less.
Why are these GM vehicle unfinished?
And, of course, this is all due to the microchip shortage and supply chain issues, mostly due to the pandemic. GM confirmed that “the timing of semiconductor shipments and other supply chain disruptions” are the problem. The good news on that front is that stock prices for chip manufacturers are leveling out, which means supplies are getting back to normal.
“We are actively working with our suppliers to resolve issues as they arise to meet pent-up customer demand for our vehicles,” GM said in a statement. It also said that production has stabilized since last year according to the Wall Street Journal.
When will these vehicles be sold?
But this news about unfinished vehicles counters that claim. GM production has stabilized, but many of those new cars can’t be sold, yet. The company says that the incomplete vehicles will be completed and sent to dealerships by the end of 2022.
All of the automakers are poised to report their second-quarter sales. Most of them are expected to show significant declines in sales, including Toyota. That company has been hit hard as a result of the COVID lockdowns in Japan.
Is any automaker’s production back to normal?
The exception to this is Ford. According to Cox and TrueCar, the company has done an admirable job managing its component production. But it has other issues to counter better production. Recalls and warranty issues have plagued the company, which vows to right the ship.
According to Cox, the only automaker that will see an increase in production will be Tesla. As of now, it hasn’t reported its quarterly information yet. Looking ahead, it doesn’t look like production will return to a more normal cadence for the rest of the year.