After 18 months of enduring skeptical questions about its huge pickup inventory, General Motors executives are enjoying sweet vindication.
In late 2011, GM began building up pickup stocks to offset periodic downtime needed to retool plants for the recently launched 2014 models. Dealers worried that their lots would be choked with older trucks. Analysts worried that GM would dump lots of cash on the hood.
The issue came to a head in December, when GM said its dealers were sitting on a 139-day supply of Chevrolet Silverados and GMC Sierras.
Fast-forward to last week. GM said its supply of full-sized pickups was down to 86 days -- still robust but not unwieldy, given the circumstances -- at the end of June. In fact, GM execs were asked during a conference call whether dealers have enough outgoing '13 models to meet demand through the fall, when the pipeline of redesigned '14s is expected to be full.
As the economy improved, GM easily moved the high stocks, and without big discounts. Average transaction prices for GM's pickups in June were $1,300 higher than they were a year earlier.
The situation elicited the closest thing you'll get to an "I told ya so" from an auto executive.
Kurt McNeil, GM's U.S. sales operations head, told analysts and reporters: "This robust demand proves that we made the right call to compensate for launch-related downtime by building inventory during the last 12 to 18 months."