Feb 23 (Reuters) – General Motors (GM.N) said on Thursday it will halt production at its Fort Wayne Assembly truck plant in Indiana for two weeks from March 27 as inventory starts to outweigh demand with the easing of supply-chain snags.
Shares of the U.S. automaker fell 3% in early trade, while rival Ford Motor Co (F.N) was about 1% lower.
After two years of U.S. automakers scrambling to keep pace with demand amid a parts shortage, GM’s decision to cut production of its highly-profitable pickup trucks signals a shift in the status quo.
“GM probably is trying to maintain pricing power with this move but it’s also contradictory to what they’ve been saying for a while recently that demand remains very strong,” Morningstar analyst David Whiston said.
Analysts have warned that rising interest rates and high vehicle prices could begin to depress demand, even as inventories of new vehicles have been rising over recent weeks.
GM said in a statement that its production was up over the past month, while demand remained “fairly consistent”, leading to an increase in inventory.
“It is disappointing to see given the overall industry doesn’t have enough inventory … it does raise concerns that demand is slowing either due to inflation or another macro headwind,” Whiston said.
Carmaker Stellantis NV (STLAM.MI) does not have any downtime planned for its North American assembly plants, a company spokesperson said.
Last year, GM’s truck plant was idled for two weeks over semiconductor chip shortages. It sold 1.2 million trucks across the United States in 2022, according to the company’s latest annual filing.
The Indiana facility builds full-size trucks, including Chevrolet Silverado and GMC Sierra pickups.
Newspaper The Detroit News had reported the production halt on Wednesday.