Industrywide for the 2020 model year, there are more than 72,000 full-size, light-duty pickup configurations, and a third of that volume is faster-turning and more profitable than average, according to J.D. Power. Another third turns quickly but with below-average profitability, and 17 percent sits on the lot longer but generates more profit.
“We look for what’s the right, sustainable mix of complexity and profitability,” Racho said. “This will drive your ability to conquest customers. It will drive the effect of influencing your residuals or your customer retention down the road. If you just focus on fast-turning vehicles, you really risk throwing the baby out with the bathwater.”
GM is not the only automaker using this year as an opportunity to keep inventory levels lower.
“I don’t think our dealers want to go back to historic inventory levels,” Fiat Chrysler Automobiles CEO Mike Manley said on the company’s Oct. 28 earnings call. “What I think we see now is somewhat closer to the new normal of inventory levels that I sincerely hope it is.”