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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Catching up with rival trucks from Stellantis NV and Ford Motor Co., most 2022 Silverado models will get larger dashboard screens and new connectivity technology featuring built-in Google voice commands and software.

Chevrolet also will add a 420-horsepower Silverado ZR2 designed for rugged off-road adventures — or to give the appearance that the owner would have them. The Silverado ZR2 will chase Ford’s F-series Raptor and the Ram TRX from Stellantis, which are attention-getting performance models for those brands.

The current Silverado, launched in early 2019, has been outflanked in sales by rival Stellantis NV’s Ram pickup. The Ram in 2018 got a makeover with a more refined interior and a 12-inch dashboard screen that was closer in style to a Tesla Model S sedan than a conventional pickup truck.

The Fiat Chrysler unit of what is now Stellantis also expanded production capacity for Ram pickups in North America, gunning to displace the Chevy Silverado as the No. 2 brand in the North American pickup segment.

That strategy — led by Mike Manley, now head of Stellantis North America — worked. Through the first half of 2021, Ram’s pickups have outsold the Silverado and are now in second place behind Ford’s F-series trucks, the best-selling model line in the United States for more than 40 years, according to sales data compiled by Automotive News.

Smartphone-like experience

Steve Carlisle, head of GM’s North American operations, told Reuters GM has learned from the challenge from Ram. “You have to be very agile and react,” he said. “And maybe ask different types of questions.”

Going forward, Carlisle said GM sees the market moving from “bigger is better” when it comes to dashboard displays to more emphasis on improving the user experience.

Carlisle said his goal for the revamped Silverado is to knock Ford out of the top spot in the segment.

“We will not rest until that happens,” he said, though he added, “we are going to do the right thing from a brand point of view.”

Ram and Ford have their own upgrades coming for 2022. Ram trucks will get enhanced infotainment systems. Ford is touting a hybrid system available on the F-150 pickup that can power a house, and promoting its all-electric F-150 Lightning coming next spring.

The new Silverados will get other new technology. The redesigned trucks will be the largest-scale application of GM’s partnership with Alphabet Inc.’s Google to create a more smartphone-like experience in cars. And top-of-the-line Silverados will offer GM’s Super Cruise system as an option to enable hands-free driving on more than 200,000 miles (321,869 km) of roads in Canada and the U.S.

The Silverado ZR2 responds to a more traditional form of automotive competition. Powerful pickup trucks equipped with tall, beefy suspensions and other modifications to handle racing over rough desert or leaping sand dunes have become the 21st century answer to Detroit’s 1960s muscle cars. Ford and Ram had models designed for extreme off-road enthusiasts. Chevy did not. Now it will.

Carlisle said 60 per cent of Chevrolet Silverados sold now are “lifted trucks” with tall suspensions. The Silverado ZR2 will add a 420-hp, eight-cylinder gasoline engine to the formula. Carlisle said the ZR2 could account for more than 10 per cent of Silverado sales.

Ford’s Raptor has a starting price of nearly US$66,000. Carlisle said Chevrolet’s ZR2 will be more “accessible” with a lower starting price.

— Reporting for Reuters by Joe White in Detroit.

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The largest U.S. automaker will halt production next week at its Fort Wayne plant in Indiana and its Silao plant in Mexico, both of which build pickup trucks. In total, GM is cutting production at eight North American assembly plants in September.

The industry-wide chip shortage is causing massive auto production cuts around the globe and auto industry officials say the problem is getting worse.

GM shares were largely unchanged in late trading Thursday.

Earlier this week, Ford Motor Co. said it will also cut truck production next week because of the chips shortage and said its August U.S. sales were down 33 per cent on the chip shortage. Toyota said last month it will slash global production for September by 40 per cent from its previous plan.

GM will halt production at its Wentzville, Missouri plant for two weeks starting Sept. 6 that builds midsize trucks and full-size vans. GM will also halt production at its CAMI assembly plant at Ingersoll, Ont., east of London, and its San Luis Potosi assembly in Mexico for two additional weeks. The company builds its Equinox SUV at both plants.

The automaker is also idling production for two additional weeks at its Lansing Delta Township plant that builds the Chevrolet Traverse and the Buick Enclave.

GM will cut two weeks of production in September at the Spring Hill Tennessee plant that builds the GMC Acadia, Cadillac XT5 and Cadillac XT6. Its Ramos, Mexico plant will take two additional weeks of downtime for Blazer production, while Equinox production will be down through the week of Sept. 27.

Production of the Equinox has been down since Aug. 16.

Democratic Senator Mark Warner said the “continuing impact of the chip shortage — epitomized most recently in the news that GM will be forced to idle plants across North America — speaks to the urgency of passing bipartisan legislation to fund new semiconductor production in the United States.”

GM said during production downtime it will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao.

— David Shepardson reports on the U.S. auto and transportation sectors for Reuters from Washington, D.C.

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The No. 2 U.S. automaker said it will run one of three shifts of production at its Dearborn truck plant the week of Feb. 8, while the truck portion of its Kansas City assembly plant will run two of three shifts of production during that week. Both are expected to return to three shifts the following week.

Ford declined to say what part or supplier were involved or how much volume would be lost.

Global automakers have been caught off guard by the shortage of crucial semiconductors, used for everything from computer management of engines to driver-assistance features such as emergency braking. Other automakers hit by the shortage include General Motors, Volkswagen, Toyota, Nissan and Subaru.

Up to now, automakers have largely focused on cutting production of less profitable vehicles as they manage through the shortage, but Ford cutting output of its high-profit trucks will raise concerns the impact is spreading.

Ford spokeswoman Kelli Felker declined to address why the F-150 had been affected, but the Dearborn, Michigan-based company may discuss the matter further when it reports fourth-quarter earnings after the market closes on Thursday.

Felker said the automaker was “working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production.” Ford has previously cut other production because of the issue.

Also on Thursday, union sources told Reuters that automaker Stellantis will slow production at its Melfi plant in Italy next week due to a shortage of microchips and other parts and will put over 7,000 workers on furlough. Mazda said it expected a production cut of 7,000 vehicles this month as a result.

On Wednesday, GM said it would cut production at four of its plants due to the chip shortage.

On Tuesday, a group of 15 U.S. senators including majority leader Chuck Schumer and Republican John Cornyn urged the White House to work with Congress to address the global semiconductor shortage hitting auto manufacturing.

— Reporting for Reuters by David Shepardson in Washington, D.C. and Ben Klayman in Detroit.

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With consumers still limiting their trips outdoors due to the COVID-19 pandemic, the company said it would invest more to expand the pickup and delivery operation while aiming to reduce costs.

The move is part of a larger trend among Canadian retailers. Earlier this week, Walmart Canada said it plans to spend $3.5 billion over the next five years to strengthen its e-commerce business.

A 280 per cent surge in e-commerce sales lifted Loblaw’s revenue about 7.4 per cent to $11.96 billion in the second quarter ended June 13. That beat analysts’ estimates of $11.87 billion, according to IBES data from Refinitiv .

Adjusted net earnings fell nearly 29 per cent to $266 million, or 74 cents per share, due to employee bonuses. Analysts had expected a profit of 71 cents per share.

The company’s food retail same-stores sales rose 10 per cent in the quarter.

— Reporting for Reuters by Uday Sampath 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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The second-largest U.S. automaker said it was aware of 17 reports of smoke or fire in the United States and six in Canada relating to seat-belt pretensioners, but was not aware of any accidents or injuries as a result. The mechanism of the pretensioner, which works in tandem with air bags, involves an explosive charge that locks a seat belt in place during a crash.

Some pretensioners in front seat belts could generate excessive sparks when deployed, resulting possibly in a fire, the company said.

The recall comes after the National Highway Traffic Safety Administration (NHTSA) opened a preliminary investigation in August into 1.6 million Ford trucks after five complaints of fires in the seat belt component, including three vehicles destroyed by fires.

Owners should “take action” when they receive recall notices from Ford disclosing the timing for free repairs, NHTSA said in a statement Thursday.

The automaker “identified this issue through its normal quality processes. We have been co-operating with the agency, as we always do,” Ford spokeswoman Elizabeth Weigandt said on Thursday, referring to NHTSA.

The recall covers 2015-18 Ford F-150 Regular Cab and SuperCrew Cab vehicles in North America for driver and front passenger seat-belt pretensioners.

Ford said the recall included 1.62 million U.S. vehicles, 340,000 in Canada and 37,000 in Mexico.

To resolve the issue, dealers will remove some insulation material and remnants of wiring harness tape from the vehicle’s B pillar area, and apply heat-resistant tape to the carpet and its insulation. They will also modify the back interior panels of Regular Cab vehicles. The B pillar is the vertical support behind a vehicle’s front seat windows.

Transport Canada contacted Ford in November 2017, regarding a B-pillar area fire on a 2015 vehicle. That prompted a joint vehicle inspection by Ford and the agency, but the cause could not be determined.

NHTSA reached out to Ford earlier this year to inquire about the reports relating to the three fires before it opened its formal probe.

Ford said the components in the older 2015-2017 models were built by Takata, which was acquired by Ningbo Joyson Electronic Corp., while ZF Friedrichshafen AG built the parts starting with the 2018 model year.

— David Shepardson is a Reuters correspondent covering the U.S. auto and transport sectors from Washington, D.C.

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The supplier, Chinese-owned Meridian Magnesium Products, said it is “working with the customers” — automakers affected by the fire — to move some of its tooling to a plant at Strathroy, Ont., in a letter on an internal employee website and signed by George Asher, manager of Meridian’s Eaton Rapids plant in Michigan.

The fire, whose cause is under investigation by local authorities, triggered smaller production disruptions to other vehicle manufacturers, including General Motors, Fiat Chrysler, Daimler and BMW, the companies confirmed to Reuters on Wednesday.

But the most significant impact was felt by Ford, whose F-150 full-size pickup is the best-selling vehicle in the U.S. The vehicle generated US$41 billion in revenue last year, about 28 per cent of total sales and the lion’s share of its profits.

Meridian supplies a lightweight radiator support for the F-150 and its heavy-duty sibling, the Super Duty. After the fire, Ford was forced to close F-series truck plants in Kansas City, Missouri, and Louisville, Kentucky, and was considering whether to close a third plant in Dearborn, Michigan.

It was not clear how long the production disruptions will last or how Ford may be assisting Meridian in relocating parts production. A Ford spokeswoman said on Wednesday the automaker is working closely with the supplier to get production restarted, but declined to provide details.

Production of the Super Duty at Ford’s Kentucky truck plant was halted on Wednesday.

The Super Duty is one of the automaker’s most profitable vehicles. A two-week production halt for the F-series could slice as much as US$310 million from Ford’s second-quarter profits, Buck Research analyst Joseph Amaturo wrote in a note Wednesday.

Ford could make up some of the lost production later in the year by running overtime.

Fiat Chrysler said on Wednesday the fire affected production of the Chrysler Pacifica minivan in Windsor, Ont., adding it is “adjusting production schedules as needed to minimize plant downtime (and) will make up any lost production.”

GM said on Wednesday it has temporarily halted production of Chevrolet Express and GMC Savana full-size vans at its Wentzville, Missouri, plant because of parts shortages caused by the fire on May 2. The plant continued to produce Chevrolet Colorado and GMC Canyon mid-size pickups. GM said it is working to resume van production “as quickly as possible.”

Daimler and BMW acknowledged that they also had parts shortages from Meridian, resulting in minor production disruptions at their U.S. plants in Alabama and South Carolina.

Meridian, owned by Chinese supplier Wanfeng Auto Holding Group, also provides parts to Toyota and Tesla, among others, according to the websites of Meridian and Wanfeng.

Meridian could not be reached for comment.

— Reporting for Reuters by Joseph White and Paul Lienert in Detroit.

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