Despite What They Say, GM’s Inventory Build Is Anything But ‘Normal’

Jon Alternative Media, Blogosphere, Economy, Fiscal Policies

For months now we’ve been warning that the great auto ‘plateau‘ is nothing more than a debt-fueled bubble, courtesy of the Fed, that is on the verge of collapse. Of course, bubbles typically get exposed when customer sell-through starts to slow but OEM’s go on believing that 10% volume growth is possible in perpetuity…that usually results in inventory growth that looks something like this:
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The second sign of a bubble usually comes when companies issue carefully crafted excuses for their inventory build. And that’s where Alan Batey, GM President of the America’s, comes in to explain that his company’s inventory glut isn’t a sign of the auto industry’s impending implosion but rather a modest build up ahead of planned shut downs and retooling efforts later this summer. Per Automotive News:
Automakers and dealers started April with near-record U. S. stocks of unsold new vehicles, but much of the surplus may stem from General Motors bulking up to prepare for factory shutdowns.

This post was published at Zero Hedge on Apr 17, 2017.