Wheel deals: GM forced to dis­count pick­ups

In­ven­tory swells af­ter GM cut in­cen­tives at wrong time; Chrysler, Ford also of­fer dis­counts.

Austin American-Statesman - - FRONT PAGE -

DETROIT — With Chevy Sil­ver­ado and GMC Sierra pick­ups pil­ing up on dealer lots, Gen­eral Mo­tors is of­fer­ing gen­er­ous deals to thin the stock.

It’s match­ing or beat­ing dis­counts from ri­vals Ford and Chrysler, of­fer­ing up to $9,000 off re­main­ing 2012 models and close to $4,500 off 2013s. That, plus low in­ter­est rates, sweet lease deals and abun­dant fi­nanc­ing, is good news for peo­ple in the mar­ket for a truck.

“They’re all very com­pet­i­tive with each other right now,” said Rus­sell Bar­nett, who owns deal­er­ships around Winch­ester, Tenn., south­east of Nashville, that sell GM pick­ups as well as the Ford F-Se­ries and Chrysler’s Ram. “The man­u­fac­tur­ers are putting a big em­pha­sis on it, and there’s a lot of peo­ple in the mar­ket.”

Last month, the Ram led the way with an av­er­age of $4,800 in dis­counts, fol­lowed by GMC and Ford at $3,700, ac­cord­ing to in­dus­try statis­tics from J.D. Power and As­so­ci­ates. GM dropped in­cen­tives on the Sil­ver­ado to just un­der $3,700. Deal­ers say GM has boosted its of­fers in De­cem­ber, while the oth­ers have ei­ther held steady or raised in­cen­tives on cer­tain models. Bar­nett said the in­cen­tives run from $4,500 to around $5,000, although the dis­counts vary with model year and op­tions on the trucks.

That means there are good deals on Ford’s F-Se­ries pickup, the top-sell­ing ve­hi­cle in Amer­ica, as well as the Sil­ver­ado, which ranks sec­ond. To­gether, the Detroit Three con­trol 83 per­cent of the U.S. full-size pickup truck mar­ket.

The three au­tomak­ers have been vy­ing for truck busi­ness all year as the mar­ket con­tin­ues a slow re­bound from the Great Re­ces­sion. Chrysler led the way on in­cen­tives most months, some­times ex­ceed­ing $5,000. GM also topped $5,000 ear­lier in the year. But in Novem­ber, the com­pany cut dis­counts on the Sil­ver­ado and Sierra by about $400, fall­ing al­most $1,200 be­low the Ram and $100 be­low Ford. The cut came just as the pickup re­bound ac­cel­er­ated, cost­ing GM sales and forc­ing it to re­spond this month.

As a re­sult, Sil­ver­ado sales fell 10 per­cent last month, while sales of the Sierra, its near-twin, dropped more than 3 per­cent. At the same time, Ford truck sales rose 18 per­cent and Ram leaped 23. So Sil­ver­a­dos and Sier­ras be­gan stack­ing up on dealer lots. At the end of Novem­ber, Chevy deal­ers had more than 169,000 Sil­ver­a­dos na­tion­wide, enough to sup­ply them for 138 days at the cur­rent sales rate, ac­cord­ing to Ward’s Au­toIn­foBank. By con­trast, Ford had a 90-day sup­ply of F-150s, and Chrysler had 106 days’ worth of Rams. Au­tomak­ers con­sider a 60-day sup­ply to be op­ti­mal.

GM’s trucks, which haven’t been re­done since 2007, are at a dis­ad­van­tage to newer trucks from Chrysler and Ford. The Ram was new in 2008 and up­dated ear­lier this year, and the F-Se­ries, new in 2009, got four new en­gines last year. So GM was forced to of­fer big­ger dis­counts this month.

“We went harder be­cause we missed on Novem­ber,” Mark Reuss, GM’s North Amer­i­can pres­i­dent, said last week as he un­veiled new trucks that will hit show­rooms late next spring.

CONTRIBUTED BY GM

Mark Reuss, GM’s North Amer­i­can pres­i­dent, in­tro­duces the 2014 GMC Sierra 1500 full-size pickup (left) and the 2014 Chevro­let Sil­ver­ado 1500. The new models will hit show­rooms in the spring.

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