Led by GM, inventories near records

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General Motors’ inventory jumped 39 percent from a year ago to almost a million unsold light vehicles on July 1 as U.S. stocks reached near-record levels. Of the industry’s total inventory growth of 354,200 units in the past year, GM has added 272,700 units. All other carmakers added 81,500, up 2.6 percent.

GM has said it is deliberately building stock to prepare for several plant shutdowns planned this year for retooling. But a month ago, it expected stocks to begin falling and be down to about a 90-day supply by July 1. Instead, stocks rose to 105 days from 101 on June 1. Still, spokesman Jim Cain said GM is on track to reach its goal of a 70-day supply by year end.

As a whole, the U.S. inventory stood at 4,197,800 units on July 1, the highest since July 1, 2004. The total is up 0.4 percent from a month earlier but 9.2 percent higher than a year ago. In the first half, overall U.S. sales are off 2.1 percent from 2016’s record pace.

The unit tally is the second highest for this date in the past 25 years after June 2004’s 4.23 million. Based on the previous month’s selling pace, automakers and dealers have a 74-day supply, the highest ever for a July 1 and well above the month’s long-term average of 60 days.

The industry added five days supply from June 1 to reach 74 days on July 1. All eight best-selling automakers increased their supply to between four and seven days during that period except Nissan North America, which was unchanged at 64 days.

Swelling inventories despite high factory incentives and some production cutbacks leave many expecting further output reductions.

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