Inventories are down but demand remains high.
As the automotive industry works overtime to recover lost sales, one bright spot remains: pickup truck sales. Despite lockdowns, layoffs, and a general economic downturn, truck sales have remained mostly solid. General Motors even reported a nearly $300 million profit in the first quarter of this year thanks to strong sales of the Chevy Silverado 1500 and Colorado, and GMC Sierra 1500. But now dealerships across the country are reporting a truck shortage that's expected to last all summer.
Automotive News spoke to a few Chevy and Ford dealerships about their truck inventories and there appears to be a slight concern. "It's going to be an interesting summer," said one Ford and Chevy dealer owner who estimated there's currently a 5 percent and 20 percent truck inventory low, respectively.
What's more, this particular owner stocked up on new 1500s and the Ford F-150 earlier this year, a move that has since paid off big time given truck demand. But as he keeps selling those trucks, replacements have been slow to arrive, mainly from GM. Factories are still not back at full capacity following a two-month shutdown. While some dealerships have found a somewhat creative, though temporary, solution: selling late-model used Colorados and Silverados, new truck inventory levels need to be restocked as soon as possible.
"The next 30 to 45 days of production is going to be really telling for the end of the summer and into the fall," said another concerned dealership executive. GM expects to be at full capacity again by the end of this month and Ford just added a third shift at its F-150 plant in Kansas City, but its Dearborn Truck Plant has yet to return to three shifts.
Another concern among dealerships is that truck buyers oftentimes prefer to place an order rather than selecting from a vehicle already on the lot. Truck owners are typically more particular about which features they want. Until factories are back at full capacity, dealers can't provide customers with projected delivery dates.
And then there's the matter of a potential economic downturn. With the unemployment rate still high will there be enough buyers in the coming months when factories are churning out trucks regulalry again? In other words, the exact opposite problem dealerships currently have could be on the horizon.