GM Inventories Surge Nearly 200,000 in November

In what cannot be a good sign for General Motors Co.’s (NYSE: GM) operations, its inventory soared to 873,682 in November, up 182,189. GM almost certainly wishes a large number of the cars were in the hands of customers.

Data for Ford Motor Co. (NYSE: F) and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) painted a brighter picture. Ford’s comparable inventory was 649,754, down 10,446 from November 2015. FCA’s was 596,989, down 62,074.

The Truth About Cars offers a possible explanation:

J.D. Power PIN data shows that General Motors spent $4,912 per vehicle sale in November 2016, a $1,302 increase compared with November 2015. According to TrueCar, industry-wide incentive spending rose 13 percent, year-over-year, a figure skewed by the dramatic increase at America’s biggest holder of market share.

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A look at GM sales for the first 11 months of 2016 gives a hint about its trouble. The GMC total dropped 2.5% to 2,723,677. However, it struggled to sell some of its models, although not all will be available next year.

Buick LaCrosse sales fell 36% to 24,756. Corvette sales dropped 11% to 27,286. Chevy Cruze sales fell 18% to 171,552. Equinox sales dropped 16% to 215,000. Impala sales dropped 20% to 86,212. GMC Acadia sales fell 14% to 76,277. GMC Terrain sales dropped 21% to 80,485

While none of these by itself is definitive, taken together, they are an ugly trend.

GM has done better than its rivals in the stock market so far this year. Its shares are up 4.1% to $35.41. Ford’s are down 13.1% to $12.24. Fiat Chrysler’s are down 17.1% to $7.63.

Maybe worries about inventory are overblown. After all, as 24/7 Wall St. pointed out, results were reasonable:

General Motors Co. (NYSE: GM) on Thursday posted total November U.S. sales of 252,644 vehicles, an increase of 10.2% compared with November 2015. Retail deliveries rose 1.6 points for the year to date to 2.2 million units and fleet deliveries slipped 3.2 percentage points for the year to date.

GM’s new vehicle sales for November were forecast at 248,600 by analysts at Edmunds.com. Kelley Blue Book (KBB) estimated an average transaction price of $39,826, flat month over month and up 2.5% year over year. KBB does not include applied consumer incentives to its calculation.

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