The major Detroit pickup truck brands are sitting on growing inventories of unsold vehicles, according to Cox Automotive data provided to Reuters.

As supply-chain bottlenecks ease, the resolve among Detroit’s automakers to keep inventories tighter than before the pandemic will be tested. Automakers could have to choose between reducing output to avoid price cuts, or offering richer discounts to pump up sales volumes, dealers said.

GM dealers have over 100 days’ supply of Chevy Silverado pickups in stock, reflecting more vehicles on the ground and a seasonally slow pace of sales, according to Cox. Inventory levels are over 100 days’ supply for rival Stellantis’ Ram half-ton and heavy-duty pickups. Ford has 92 days’ worth of F-150s in stock, according to Cox data.

A GM spokesman said Cox’s numbers do not accurately reflect GM’s inventory situation. GM does not disclose detailed inventory figures. However, he said GM is acting to support its pricing strategy, which relies on keeping inventories leaner than in the past.

Stellantis said in a statement it had no downtime planned at any of its North American plants, but constantly reviewed its inventory levels and would make production adjustments as needed.

Industry consultants J.D. Power and LMC Automotive forecast on Friday that U.S. car and light truck sales for February would reach a 14.6 million-vehicle annualized pace. That is up from a year ago, but still well below pre-pandemic levels.

February sales growth was led by a 54 per cent increase in sales to fleet customers, Power and LMC said.

Overall inventories of unsold vehicles are still low, but “are still not sufficient to fulfill demand each month,” Thomas King, president of the data and analytics division at J.D. Power, said in a statement.

GM said its decision to idle the Fort Wayne, Indiana assembly plant that builds Chevrolet Silverado and GMC Sierra pickup trucks for two weeks starting March 27 was done to maintain “optimal inventory levels with our dealerships.”

Who blinks first?

GM, Ford and Stellantis dominate the U.S. large pickup market, and for the past two years have been raising prices on their trucks to record levels as supply-chain snags limited production.

Dealers contacted by Reuters said that now, some customers are waiting for better deals, or are postponing purchases because the combination of high prices and higher interest rates put vehicles out of reach. The automakers face a choice between cutting prices using bigger rebates or subsidized loans, or keeping inventories tight.

“What they’re doing is playing what I call the blink game — whoever blinks first. Especially for trucks,” said Ohio dealer Rhett Ricart, whose Ricart Automotive Group sells Ford and GM trucks at different stores.

Brad Sowers, president of Jim Butler Auto Group in Missouri, said high prices are hitting demand. However, he wrote in an email, “manufacturers do not want to flood the market and be forced to quadruple incentive spending to drive demand that will reduce their margins.”

Some discounts are showing up in the large pickup segment. Ram is offering 2.9 per cent financing for 72-month loans on certain Ram 1500 trucks.

Power and LMC said fewer vehicles were sold in February above their manufacturer suggested prices, and that the average discount rose 4.7 per cent to US$1,335 a vehicle. That is still well below pre-pandemic levels, Power-LMC said.

— Reporting for Reuters by Joseph White and Ben Klayman in Detroit; additional reporting by Kannaki Deka in Bangalore.

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Ford said select 2011-2013 model year trucks with six-speed automatic transmission could experience an unintended downshift into first gear without warning, which could result in the loss of vehicle control. Ford is aware of five accidents, including one report of whiplash potentially related to the issue.

The recall covers 1.26 million trucks in the U.S. and 221,000 in Canada. Dealers will update the powertrain control software and the company will notify customers next month.

In March 2016, Ford recalled 153,000 U.S. 2011-2012 Ford F-150, Ford Expedition and Lincoln Navigator vehicles for a similar transmission downshift problem. Ford spokeswoman Monique Brentley said the root cause was different than in the new recall.

In December 2017, the National Highway Traffic Safety Administration opened an investigation into whether that recall should be expanded by nearly 1.4 million 2011-2013 vehicles after 123 complaints and two crashes but no reported injuries.

The agency said an unexpected downshift “can cause the vehicle to slow down suddenly and without warning. This can also cause the rear tires to skid or lock up, increasing the risk of a crash.”

The investigation is pending.

Ford also said it is issuing two other recalls. One covers 28,200 2017-19 Lincoln Continental vehicles in North America for door latches that may not engage due to the buildup of silicon contamination and could result in the door opening while driving.

Ford said it was not aware of any reports of accidents or injuries. Dealers will replace the door latch assemblies in all four doors.

Ford is also recalling 4,200 2019 model Ford Mustang, Lincoln Nautilus and Lincoln Navigator vehicles for instrument panel cluster assemblies that are blank when the vehicles are started. Dealers will update the software. No crashes are reported linked to the recall.

— Reporting for Reuters by David Shepardson and Ben Klayman.

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