DETROIT -- General Motors is confident that it can work through its bloated pickup inventory without dumping cash on the hood, in part because the stockpiles are needed to get through factory downtime next year.
GM says inventories of its full-sized pickups -- the Chevrolet Silverado and GMC Sierra -- stood at 209,000 units, or a 115-day supply, at the end of July. That figure is "higher than usual and higher than we would normally prefer," Don Johnson, vice president of U.S. sales, conceded last week.
But Johnson says GM foresees its pickup stocks dropping to a 90-day supply by year end. And its goal "is absolutely not to be discounting trucks to drive sales," he says.
Johnson says improving auto sales in general and an uptick in the full-sized pickup category in particular will soak up some of the excess. He says pickup sales generally are better in the second half and moderating gasoline prices should stoke demand.
Still, GM says, that 90-day inventory target would equate to about 200,000 units, or about 40,000 more than GM had at the end of 2010.
Johnson says that's by design: About 10,000 of those extra units are needed to meet rising demand. And 30,000 will compensate for lost production in 2012, when GM will be retooling its pickup plants in preparation for a redesigned truck.
"The addition of these extra units this year is necessary in order for us to fulfill expected demand in the segment next year," Johnson says.
That raises the question: Is GM pulling ahead the launch of its next-generation Silverado and Sierra? Industry insiders have pegged a mid- to late-2013 launch.
GM won't say. But J.P. Morgan analyst Himanshu Patel concludes that the changeover to the redesigned truck "is clearly a second-half 2012 event, six to nine months ahead" of his previous forecast of the spring of 2013. In a research note last week, Patel cited GM's stated changeover plans and intelligence from American Axle & Manufacturing Inc., a major supplier to GM's pickups.
Johnson says the plant work needed to prepare for the new pickup program will be "spread out across the four quarters" of 2012. That implies that sales wouldn't begin until 2013.
Last month, a person familiar with the plans said GM plans an extensive redesign of the next pickup that requires major plant overhauls, which likely will last into 2013.