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Looking at GM’s Critical “Days Supply” Numbers

Yes, sales are important, but here's another measure of an automaker's success.

by on May.04, 2009


By subtracting current sales from production rates, you come up with days supply.

There are sets of numbers about the auto industry that few journalists pay much attention to, but they bear considerable weight when General Motors’ current situation and now partially-predictable future are concerned.

The numbers other auto and business journalists report are obvious: sales and production. Lately some have also been mumbling about dealer counts, but they’ve often gotten it wrong. And what they largely and routinely overlook is “days supply.” is here to set matters straight.

Days supply, as applied to domestic automakers, is considered by many insiders the real measure of relative success in the auto industry. The number is derived basically by subtracting sales from production, with the answer fundamentally telling the state of dealer inventories along with vehicles in-transit and others produced but still in automaker hands. (more…)