Are General Motors' sales a lot worse than they seem? Is GM recording inventories that it is sending to dealers as "sales"? What sales there are seems to be sales to the government. Is GM really government motors? From "The Truth about Cars":
A lawsuit filed by a Florida investor against General Motors over the age-old practice of “channel stuffing”, or sending inventory to dealers and recording it as a “sale”, so that revenue numbers can be pumped up while the vehicles languish on dealer lots. The practice of channel stuffing is universal in the auto industry, but in this case, the consequences are much broader. . . .
While General Motors is touting their 32 percent year-over-year increase in sales, a closer look at the numbers reveals a couple of things. According to Bloomberg, inventory for full-size trucks was at a 135 day supply, as GM ostensibly cranked out profitable pickups and sent them off to dealers across the land, allowing them to book sales of their most lucrative vehicles just in time for the half-way mark – and coincidentally (or not), government purchases of GM vehicles rose 79 percent in June. Retail sales were up a mere 8 percent, while fleet sales rose by 36 percent. . . .
Labels: bailout, GM