Wheel deals: GM forced to discount pickups
Inventory swells after GM cut incentives at wrong time; Chrysler, Ford also offer discounts.
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.
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.