GM Offers Incentives On Newly Introduced Pickups. Were They Priced Too High To Begin With?

TTAC Staff
by TTAC Staff
gm offers incentives on newly introduced pickups were they priced too high to begin

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, cited by Automotive News, 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 to AN.

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.

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  • Jeff S Jeff S on Oct 06, 2013

    @Big Al--If GM is going to rely on Colorado/Canyon then they need to have a higher quality product priced competitively and offer the diesel as an option. Over pricing and then offering large discounts is not a sustainable practice. Price the truck fairly and offer a good quality product and stand behind the service of your product. What Highdesert Cat has said about his experiences with a Saturn is a lesson that every manufacture should learn from and not repeat. Saturn started out with a quality product and then cheapened it. GM needs to put more emphasis on quality and reliability and less emphasis in gaining back its Number 1 position from Toyota. Make a good quality and fairly priced vehicle and the customers will buy your product.

    • Big Al from Oz Big Al from Oz on Oct 07, 2013

      @Jeff S The problem with GM is a legacy of the 'Old Detroit' culture. Selling the most isn't necessarily the best. Maybe GM think if they can flood the market with their product it leaves less room for a competitor. But this will come back to bit them, like subsidisation, sooner or later it has to stop and reality will strike. Lou mentioned that the GM siblings are nothing spectacular, sort of Toyota'ish. I think even Toyota will begin a slow and gradual decline. Nothing is forever, especially the way GM is heading. The Big 3 have painted themselves into a corner in the US and are to reliant on the one style of vehicle....the full size pickup. What has maketh them will breaketh them. The US really needs to modernise it system of tariffs and barriers and match what others are doing or it will continue to import external technologies.

  • Lou_BC Lou_BC on Oct 07, 2013

    @Jeff S - I agree. GMC is in trouble with the new Sierra and Silverado if they have to offer rebates right off the start. New models tend to have rebates at the end of the year to help clear out old inventory. That would mean 2015 for the 2014's. The Colorado had better be stellar because the new 1/2 tons aren't. I do like both of the 2014 GM siblings but nothing really makes me go WOW. The 5.3 is close to the 5.0 in power, the body is a huge step up only to the GMT900's. Disc brakes in the rear isn't new. A 6.5 box crew cab isn't new either. I'd like to see minimal overlap with the GMC 1/2 tons. The high end Colorado should be comparably priced to a mid level Silverado/Sierra. I's like to see Colorado in a Raptor type package. Ram has the HD Power Wagon, Ford has the 1/2 ton Raptor, and GMC should have the small truck off-roader. The Tacoma Baja isn't extreme enough in my books to count.

  • Bd2 Other way around.Giorgetto Giugiaro penned the Pony Coupe during the early 1970s and later used its wedge shape as the basis for the M1 and then the DMC-12.The 3G Supra was just one of many Japanese coupes to adopt the wedge shape (actually was one of the later ones).The Mitsubishi Starion, Nissan 300ZX, etc.
  • Tassos I also want one of the idiots who support the ban to explain to me how it will work.Suppose sometime (2035 or later) you cannot buy a new ICE vehicle in the UK.Q1: Will this lead to a ICE fleet resembling that of CUBA, with 100 year old '56 Chevys eventually? (in that case, just calculate the horrible extra pollution due to keeping 100 year old cars on the road)Q2: Will people be able to buy PARTS for their old cars FOREVER?Q3: Will people be allowed to jump across the Channel and buy a nice ICE in France, Germany (who makes the best cars anyway), or any place else that still sells them, and then use it in the UK?
  • Tassos Bans are ridiculous and undemocratic and smell of Middle Ages and the Inquisition. Even 2035 is hardly any better than 2030.The ALMIGHTY CONSUMER should decide, not... CARB, preferably WITHOUT the Government messing with the playing field.And if the usual clueless idiots read this and offer the tired "But Government subsidizes the oil industry too", will they EVER learn that those MINISCULE (compared to the TRILLIONS of $ size of this industry) subsidies were designed to help the SMALL Oil producers defend themselves against the "Big Oil" multinationals. Ask ANY major Oil co CEO and he will gladly tell you that you can take those tiny subsidies and shove them.
  • Dusterdude The suppliers can ask for concessions, but I wouldn’t hold my breath . With the UAW they are ultimately bound to negotiate with them. However, with suppliers , they could always find another supplier ( which in some cases would be difficult, but not impossible)
  • AMcA Phoenix. Awful. The roads are huge and wide, with dedicated lanes for turning, always. Requires no attention to what you're doing. The roads are idiot proofed, so all the idiots drive - they have no choice, because everything is so spread out.