General Motors revealed last week that 95,000 of its vehicles have mostly been built but are in storage awaiting finishing parts. The company, like others, finds itself in this situation due to supply disruptions.
The automaker says the shortage of semiconductor chips that has plagued the auto industry is the main reason for stockpiling vehicles rather than selling them. It said that while it delivered 247,839 vehicles in the second quarter of 2022, its wholesale volumes have been impacted by this and other supply chain issues.
As a result, 95,000 vehicles are just sitting around waiting for the parts they need to be completed and sent to dealerships, the automaker wrote in its second-quarter earnings report. It plans to deliver these vehicles throughout the second half of 2022, and the company’s executive vice president, Steve Carlisle, said the company understands the urgency of the situation.
Read more: GM stores trucks without microchips in a former microchip factory
“We appreciate the patience and loyalty of our dealers and customers as we work to meet significant pent-up demand for our products, and we will work with our suppliers and our manufacturing and logistics teams to deliver all units held in our factories as quickly as possible,” he said.
GM has stockpiled near-finished vehicles through its “build shy” strategy, reports GM Authority. This tactic involves building new vehicles without certain heavy components and storing them until they can be finished.
The advantage of this strategy is that once the semiconductors are secured, they can be installed relatively quickly and vehicles can be shipped quickly to dealerships. This may, however, leave GM with a backlog of vehicles, as it does now.
A shortage of semiconductor chips cost the auto industry as a whole up to $210 billion last year and pent-up demand sent prices for new and used vehicles skyrocketing. Reports now indicate that the shortage and its repercussions could last until 2024.