alt="1GC1KXC88EF129486_1″
src="http://www.thetruthaboutcars.com/wp-content/uploads/2013/10/1GC1KXC88EF129486_1-550×412.jpg"
width="550″ height="412″ /> Usually, in the U.S.
pickup truck market, whichever company has the newest truck
normally gets a bump in sales. While it's hard to get Chevy guys
into Fords and vice versa, about 6% of the market does shift to the
most recently updated pickup because of businesses making decisions
based on dollars and cents, not brand loyalty. General Motors has
the newest trucks on the block in the 2014 Chevy Silverado and GMC
Sierra, but in a growing overall market GM's pickup trucks last
month saw an annual decline in sales. Some analysts say that GM
priced their new pickups, a key profit generator for the company,
too high. Supply issues with parts for the 5.3 liter V8 have also
restricted sales. An analyst at Morgan Stanley also attributed the
September decline to "stair step programs" for dealers and other
incentives that were offered in August which pulled sales forward.
Now, GM is taking the rare step of offering incentives on recently
introduced vehicles, the new pickups, apparently to compete with
heavily discounted trucks at Ford and Ram.
Year to year sales of GM's full size pickup trucks were
down 8% in September. The new 2014 models made up 60% of sales as
they move out remaining stock of 2013 trucks, which the company
says are dwindling. Overall GM sales were down 11%, attributed to
slower sales of Chevrolet vehicles and a steep drop in rental-fleet
delieveries. Now GM has told dealers that for October the company
will give customers $1,000 cash rebates on the 2014 Silverado,
along with $500 in incentives on premium trim packages like the
Texas and All Star editions. There is also a "sales manager bonus
program" that gives dealers $200 when they sell particular
Silverados. Kurt McNeil, GM's vice president of U.S. sales
operations, confirmed the incentives but he said that the discounts
were a planned part of the rollout of the new trucks and not a
response to discounts at competitors. "We're going to continue to
work our plan and introduce them in the right way," McNeil said. He
predicted that sales of the trucks will improve as lower priced and
higher volume models start arriving at dealers. The early
production mix has favored V8 models with more expensive trim and
equipment and McNeil said that sales should get better as dealers
get more V6 powered trucks and less expensive option packages. Some
dealers have complained that after early adopters and loyal GM
truck owners bought their trucks when they first came out, the new
models have become a harder sell because of the discounts at Ford
and Ram. "If you didn't have any '13s left, then you were stuck
trying to sell the '14s without any incentives," said Courtney
Cole, who owns a Chevrolet store near Indianapolis. "They might be
pretty, but not everybody is going to pay full price." Some
analysts say that full price was set too high in the first place.
While GM's pickup truck sales declined last month, Ford F-Series
truck sales were up 10%. If pickup truck buyers are choosing more
dated products to save money, that doesn't portend well for Chevy
and GMC. McNeil insisted that everything is going according to
plans and that consumers are opting for discounts at competitors in
part because GM is concentrating on profit margins, not volume. In
September, the average transaction price on GM pickups was up
~$3,000 from 2012 and up $800 from August. "No one was close to us
from an incentive reduction standpoint and a [price] increase
standpoint," said McNeil. "We definitely took a different tack." He
also said that the initial rollout of the new trucks is still
underway and that the company is still rushing to get the new
trucks on dealer lots. "We're still very much in launch mode,"
McNeil told the Bloomberg news agency.
from The Truth About Cars http://www.thetruthaboutcars.com
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