The Incentive Wars: GM Mounts All-Out Assault

Bertel Schmitt
by Bertel Schmitt

It did not take a high degree of intellect when we recommended last week to wait for a better deal if you are in the market for a Chevy or GMC pick-up. GM threw its vaunted fiscal discipline in the wind and is piling cash on the hood of trucks that are piling up on dealer lots.

GM, says the Freep, is

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.”

We never put much credence in the story that truck armadas must be kept in reserve such as not to run out of them when GM switches over to its 2014 models.

At the end of November, Chevy dealers had more than 169,000 Silverados nationwide,138 days of supply. Ford had a 90-day supply of F-150s, and Chrysler had 106 days’ worth of Rams.

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Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Mfgreen40 Mfgreen40 on Dec 18, 2012

    big meats-- my car is 20 yrs old but my NG furnace is over 40 yrs old. the furnace is a little thirsty, but I have not spent one penny in repairs other than 3 new belts changed as preventive maint. If cars were only this good!

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    • Rpn453 Rpn453 on Dec 21, 2012

      @chaparral 52-year-old Coleman NG furnace here. I'd probably save $200 a year with a $6k high efficiency furnace. Not worth it. My girlfriend junked her perfectly good 40-year-old furnace a few years ago to be "eco-friendly" by installing a $7k high efficiency furnace. What a waste. She hasn't noticed any obvious difference in energy consumption. At most, I figure she's saving about $100 a year on her $800 annual bill, considering that about $300 goes to fixed charges and hot water usage. Plus, the installers left her gate open and her dog escaped, costing her about $10k for the care and multiple surgeries he needed after getting hit by a car.

  • Oboylepr Oboylepr on Dec 18, 2012

    Believe it or not Mikey, got gas from the local First Nation owned gas station last Friday for .99c/litre! Almost nobody on the reserve drives a car, they all have big ass trucks.

  • APaGttH APaGttH on Dec 18, 2012

    And so it continues. Ford has $6000 in cash on the hood (when you read the fine print) http://www.ford.com/trucks/f150/2012/incentives/ The $7500 figure is achieved by package discounts, which is just funny money math anyway - so to keep it to real, leafy greeny money coming from the manufacturer, lets keep it all honest. Toyota has up to $5000 in cash on the hood of a Tundra right now (funny, no mention of that - source from toyota.com based on redirect to zip of 77070, Houston, Texas) http://www.gulfstates.buyatoyota.com/ Chrysler has up to $7200 in cash on the hood or Ram Trucks (source, ramtrucks.com) But here is what two minutes of web searching reveals - guess, according to their websites has the LEAST amount of cash on the hood? Yup - Chevrolet - $4500, look it up yourself: http://www.chevrolet.com/tools/currentoffers/results.do OK, OK, so let me check GMC. Maybe they have a ton of money on the hood. Nope. $4500 on a 1500 Extended Cab - just like it's Chevy twin. So GM has thrown all fiscal caution to the wind, putting the least amount of money on the hood (including Toyota) on their fullsize trucks. Ya, smarty pants, you didn't check Nissan! OK - Nissan - they have $6,350 cash on the hood of a Titan in the Houston, Texas area. http://www.choosenissan.com/houston-area/titan/ But, but, but, HONDA! They have a truck, that Ridgeline thing! OK, yup, you got me. Honda is showing more fiscal restraint than GM - they have no cash on the hood of the Ridgeline. I get that we are requoting from another source - but the ACTUALLY INCENTIVES from the manufacturer are the smallest from Honda, then GM. Even Toyota has more cash on the hood. For those who found this hard to follow: Ram 1500: $7200 cash on the hood Nissan Titan: $6350 cash on the hood Ford F-150: $6000 cash on the hood Toyota Tundra: $5000 cash on the hood Chevrolet 1500: $4500 cash on the hood GMC 1500: $4500 cash on the hood Honda Ridgeline: $0 cash on the hood Yup - that GM is sure doing an awful job. To get to the figures above I did not include things like USAA buyer discount, college grad cash, educator, police, fire, or other public servant bonus cash, or any other dealer programs geared toward narrow groups. Not all discounts apply to all models. To get the maximum GM discount you need to go extended cab. To get the maximum Ford discount you need to go extended cab XLT. To get the maximum Toyota discount you need to go crew cab, etc. etc. In reality all of the above have significantly less cash on the hoods than the maximum examples above. Dealer discounts above factory incentives will of course vary from dealer to dealer. A check on Truecar shows the average Silverado is selling at about a $2900 discount - well WELL below the hyped up story of $9000 deals. Research people - research.

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    • APaGttH APaGttH on Dec 18, 2012

      @ajla ...And the $5000 on the Tundra only applies to a rare, high-priced 2012 Special Edition truck, not the usual Tundra. Normal trim 2012s have $3000, 2013s have $2500... Gee, go back and reread what I wrote... ...Not all discounts apply to all models. To get the maximum GM discount you need to go extended cab. To get the maximum Ford discount you need to go extended cab XLT. To get the maximum Toyota discount you need to go crew cab, etc. etc... Here is the link: http://www.truecar.com/prices-new/chevrolet/silverado-1500-pricing/2012/ Zip Code is 77070. Houston, Texas. Average paid, $20,333 - average MSRP is $23,190. You do the math. I don't have the time to play with options, bed styles, to twist the numbers into something to prove a point. But a 2WD LT Extended Cab, which is going to be far more common, doesn't even come close to the $9000 figure. Average paid is $27198 and the average MSRP is $32,495. Discount of $5,297 - still not near $9,000 and you won't get $4,500 in rebates on this model. Still misses the point of the cash on the hood. If the Ford dealer has $6000 on the hood and then discounts the price $3000 on an Ecoboost F-150, what is the Chevrolet dealer supposed to do with a GMT900 Silverado?

  • Rnc Rnc on Dec 18, 2012

    "Research people – research": Means nothing what so ever unless a great deal of facts not made available to the general public can be distilled and applied. GM does have one huge advantage right now, roughly $2 billion a Qtr in interest payments have disappeared, so why they are putting the least amount on the hood (corporate wise), what are the dealers paying for the trucks that are passed on to the customer (shadow cash on the hood, especially the 2012's). The other half of the equation is the lack of GMAC, GM doesn't get the interest $ and any time they finance below market rates they have to make a NPV transfer to Ally or whoever else is financing (shadow cash on the hood, they sure aren't going to advertise because it has a double whammy impact). These are the things we don't see, shareholders don't see. GM needs to use that extra $8 billion/yr and get Opel and thier pensions in order (if either is possible). and they have a short time to do it, even after having $30 billion in debt erased Ford is the healthier of the two (think about that). And I want GM to survive, I got to take about a 3-4 mile test drive in a Volt this weekend (lady at station, we started talking about it (had 5 year old with me), car is solid, not a cruze and I have to admit it was really cool going 55 mph and no engine, she says about once a month she visits her sister so the engine will run because she worrys about water in the gas and the engine just sitting long term, don't know if either is justified. Still don't understand why there isn't a small turbo engine with a two speed transmission b/t it and the generator, better yet, make a supercharger/alternator(just spins the alternator at engine speed) that can charge the batteries while generator runs car. but after riding in the car, if GM sticks with it and uses continuous improvment, scale (costs) and efficiencies, it has a bright future (especially in large trucks if they can get it right, and by right I mean opposite of two-mode system).

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