General Motors Undercuts Competition With Lower Starting Prices

Cameron Aubernon
by Cameron Aubernon

Looking for a new Cruze, LaCrosse or Terrain? You might have a bit more money left thanks to some undercutting by General Motors.

CarsDirect reports GM has dropped the base MSRP on a handful of models by as much as $2,750. As a result, some of those models are lower in price than their competitors. The aforementioned GMC Terrain gained the greatest undercut, falling $4,030 under the Ford Edge with the crossover’s new base of $24,070.

However, to be able to undercut the competition without removing key features, GM has sliced dealer margins on the cheapest trims, such as the Terrain SL, Buick LaCrosse 1SV, and the newly introduced Chevrolet Cruze L. Profit margins on such vehicles being as thin as they are already — the difference between MSRP and invoice on the Cruze LS is $600, but only $81 on the L — the economy models may see or are seeing now incentive inclusions.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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11 of 22 comments
  • Erikstrawn Erikstrawn on Feb 02, 2015

    "Uh oh, we're losing market share." "Quick, lower the prices!" "But then we're selling them at a loss." "Don't worry, we'll make it up in volume!"

  • Corey Lewis Corey Lewis on Feb 02, 2015

    First thought: The new Cruze grille don't work for nobody at all. And does this count as a new model or a refresh? Cause other than grille I don't see any changes at the front. Second thought: "The aforementioned GMC Terrain gained the greatest undercut, falling $4,030 under the Ford Edge with the crossover’s new base of $24,070." That's about where it should be, because I'm taking Edge any day of the week. The Terrain is old and overpriced, and RIDIC priced at higher trims. The 6cyl is even an -optional extra- on the Denali version.

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    • Dbar1 Dbar1 on Feb 02, 2015

      @Corey Lewis Its 100lbs lighter, gets 26 mpgs combined vs. Fords turbo 4 cylinder that gets 24 mpgs.

  • Gasser Gasser on Feb 02, 2015

    How can a dealer stay in business with $81 margin on the Cruze L????? I guess GM is making its money on the financing like many subprime lenders. Not long before Cruze will offer the BHPH option.

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    • Frantz Frantz on Feb 02, 2015

      @sunridge place Yeah, money is in the options. When I got my Fiesta S, I had to locate it 148 miles away, as that was the closest manual hatch. No one wants a car on our lot that we can only discount $50. American customers aren't trained to look at car values, so much as they are step discounts.

  • TW5 TW5 on Feb 02, 2015

    I wish more manufacturers would use this model. Seems like only GM and Nissan are willing to break the oligopoly pricing racket. Let well-built cars mature. Reduce the price. Spend the development budget on powertrain upgrades, reliability, and aero tweaks. Better yet, put a BAS mild-hybrid system and CVT on the 1.8L engine, and see if Cruze will make 40mpg combined for the cost of a base-trim Civic. I know the average sod wants to spend his money on technological frills, but oil price volatility is going to steer development spending towards the powertrain.

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    • Dbar1 Dbar1 on Feb 02, 2015

      @sunridge place Yup, the Asian manufacturers have been pushing this hard in recent years. I feel like the "Big 3" havent been recently, but are starting to do it again more vigorously.