GM bars dealers from reporting sales before delivery

GM on Friday said it would hold about 95,000 vehicles awaiting parts until they are completed. The automaker expects the vehicles to be delivered to dealers by the end of this year and will recognize the revenue when the vehicles are sold to dealers.

“We appreciate the patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products, and we will work with our suppliers and manufacturing and logistics teams to deliver all the units held at our plants as quickly as possible,” Steve Carlisle, president of GM North America, said in a statement Friday as GM reported a second-quarter sales decline of 15 percent.

Industrywide, dealers and automakers continue to cope with scarce inventory. Retail inventory, which includes vehicles on dealership lots and vehicles in transit, has hovered around 850,000 for three months, said Tyson Jominy, vice president of data and analytics at J.D. Power. That compares with more than 3 million under normal circumstances in recent years.

The chip shortage is only one of many factors making it hard for dealers and customers to get the vehicles they want, Jominy said.

“It’s everything. It’s paint resin. It’s tires. It’s wiring harnesses. It’s headlights. It’s radios,” he said. “If it was one thing, we could probably have a solution. But the reality is it’s multilayered supply and logistical challenges that make it extraordinarily difficult to resolve quickly.”

Dealers often are invoiced for vehicles before they leave the assembly plant. In some states, they can officially sell a vehicle to a customer as soon as they receive its invoice and certificate of origin. Before the pandemic, dealers could be confident that the vehicle would arrive a week or two after being invoiced.

The crisis has left dealers unable to answer many customers’ questions about when their vehicles will show up.

“Sometimes you get [the vehicles] in three months, and sometimes you get them in seven,” the Minnesota Chevy dealer said. “You report them, and by the time the thing comes in, you have made three payments on it, all the trials for OnStar and XM are expired and the [customer] calls you 9,000 times wondering where his vehicle is.”