By on December 2, 2016

GMC.com screenshot - Image: GMCGeneral Motors moved to increase the average incentive spend per Buick, Cadillac, Chevrolet, and GMC vehicle by 36 percent in November in order to clear out an inventory glut that seemingly refuses to be cleared out.

According to Autodata, General Motors now has more than 873,000 vehicles in stock, nearly three months of supply. That’s 26 percent more inventory than at this stage of 2015, when industry-wide volume was pacing at roughly the same level as today, albeit with significantly less incentivization.

J.D. Power PIN data shows that General Motors spent $4,912 per vehicle sale in November 2016, a $1,302 increase compared with November 2015. According to TrueCar, industry-wide incentive spending rose 13 percent, year-over-year, a figure skewed by the dramatic increase at America’s biggest holder of market share.

Besides the striking incentive increase, GM once again resorted to fleet volume in order to generate overall sales momentum. After decreasing fleet emphasis throughout the year, GM’s fleet sales jumped 19 percent in November 2016, an 8,880-unit increase compared with November 2015 that drew fleet sales up to 22 percent of GM’s overall mix. (Year-to-date, 19 percent of U.S. GM sales are fleet-derived.)

Prior to November, GM had not reported a year-over-year fleet sales increase since last year.Buick.com screenshot - Image: Buick.comNowhere was GM’s push to produce greater volume more evident than with the company’s full-size pickup trucks. The Chevrolet Silverado and GMC Sierra generate more than one-quarter of GM’s U.S. volume. In order to keep pace with a full-size pickup truck market that grew 9 percent in November, GM spent an average of $5,753 to move each Silverado and Sierra, a 46-percent increase compared with the same period one year ago.

Ram spent $6,062 per truck sale, a 19-percent increase. Ford’s F-Series was incentivized to the tune of $4,467.

Ford reported 72,089 total F-Series sales in November 2016, a 10-percent uptick. Combined, the Silverado and Sierra trailed the F-Series by nearly 8,000 sales. 2015 was the first year since 2009 in which the GM twins combined to outsell the F-Series. But even with audacious discounts, the GM twins by 14,293 sales heading into December. (GM also sold 132,695 midsize pickups in the first 11 months of 2016.)

With a market that’s essentially flat and the demand that does exist fueled in no small part by hefty price reductions, GM has nevertheless forged on building vehicles like the market has plenty of room to grow. Fiat Chrysler Automobiles’ inventory is 9 percent lower today than it was a year ago; the Ford Motor Company’s inventory is nearly 2 percent lower.

General Motors outsold the next-best-selling manufacturer, Toyota, by 55,000 units in November. Buick, Cadillac, and GMC all posted double-digit percentage gains. Chevrolet sales grew 8 percent.

Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.

Get the latest TTAC e-Newsletter!

Recommended

47 Comments on “General Motors Incentives Skyrocket In November; GM Inventory Still Ballooning...”


  • avatar
    CoreyDL

    You know I used to like the Denali effects on prior generations. But now they’re so overblown and gaudy I think I’d have to stick with the top trim SLT.

  • avatar
    SCE to AUX

    Camaro inventory remains at 5 months’ stock, while heading into the slow winter sales months:

    https://www.thetruthaboutcars.com/2016/12/november-2016-usa-auto-sales-brand-results/#comment-8623018

    GM needs to stop the Camaro line for 3 months.

  • avatar
    jjster6

    You do realize there is a huge difference between 83 days of inventory when factories are operating at 110% of capacity, and 83 days of inventory when factories are operating at 60% capacity.

    Also, did you see the q3 GM profit? In a high fixed cost industry, incremental volume can mean big profits.

    I’m not saying GM is doing things right or wrong, I’m saying that the profit equation is much more complicated than just looking at the days of inventory on hand.

  • avatar

    In November GM finally “throttle up” to move iron.

    Inventory on the ground? When most dealers are part of groups stuffing them with vehicles is a motivator to move iron.

  • avatar
    dash riprock

    Interesting stats. Would like to see a metric where the incentive spent is adjusted for the msrp of the vehicle. Looking at the November sales, GM’s most expensive and profitable vehicles saw the biggest increase yoy”:

    Suburban + 26%
    Tahoe + 30%
    Yukon +57%
    Yukon xl +15%
    Escalade + 26%

    • 0 avatar
      sportyaccordy

      Yea, I would also like to know how many vehicles GM essentially gave away in incentives. There has to be a really good reason they are giving that money to customers instead of shareholders.

      • 0 avatar
        jjster6

        GM had the highest average transaction price by a large margin ($4000 I think). So start with a high MSRP and mark them down. No different than a lower MSRP and no discount. I think just looking at incentives again oversimplifies the situation.

        • 0 avatar
          dash riprock

          That is essentially the point I was making. The mix of vehicles sold will have an marked influence on both ATP and Incentives. If GM sees a decrease in Yukon/Suburban/Escalade sales but an increase in Sonic and Cruze sales, guessing the average incentives and ATP go down.

          Most important is what the net income will be for November and that is not knownable through the stats in this article

  • avatar
    Carlson Fan

    When GM slaps those incentives on a loaded up Canyon with the baby dirtymax they’ll have my attention!

    • 0 avatar
      jjster6

      No need. Every Canyon and Colorado has a buyer waiting (yes, that is a bit of an exaggeration). They can’t be made fast enough.

      I love my Colorado Z71!!!

      • 0 avatar
        PrincipalDan

        No kidding. It seems like every 5th Chevy or GMC I see on the highway is a Canyon or a Colorado. At least one diesel model has been sold in my area.

      • 0 avatar
        Carlson Fan

        “No need. Every Canyon and Colorado has a buyer waiting (yes, that is a bit of an exaggeration). They can’t be made fast enough.”

        I know. I’ll wait a few years until the demand has tapered off. If I needed a PU today I’d go FS because you get a LOT more truck for your money. They absolutely don’t have to deal on the midsize trucks currently to move them

        • 0 avatar
          jjster6

          In Canada, where I reside, lease on Colorado tends to run a hundred bucks a month less than a comparable full size (although I realize comparable is very hard to define and is in the eye of the beholder). YMMV.

          • 0 avatar
            Lou_BC

            jjster6 – if one waits for the usual seasonal discounts one can get Silverado’s for less than a Colorado. Last year I saw a nice 6.2 Silverado with discounts listed for about the same price of a Colorado. If I had the choice between a loaded 50K Colorado or 14k off of a loaded 64k 6.2 Chevy, it stops being a choice. I’d get the Silverado.

          • 0 avatar
            jjster6

            @Loubc… In Canada there ain’t no such thing as a 50k Colorado. 40K is fully loaded, $45K with the diesel.

            I take that back. You could get to 50k with the Trail Boss package but that’s $8500 for Duratrac off road tires and side steps. I don’t think that counts because only 3 people would be dumb enough to buy that package. I put the Duratracs on my for $1000 and sold the stock Z71 tires for $500 on Kijiji. And a real off truck doesn’t have side steps.

          • 0 avatar
            Carlson Fan

            “If I had the choice between a loaded 50K Colorado or 14k off of a loaded 64k 6.2 Chevy, it stops being a choice. I’d get the Silverado.”

            I hear you Lou, basically the same point I was trying to make. Especially when your talking the 6.2, which IMO is the only motor to have in the GM 1/2 ton trucks.

  • avatar
    philadlj

    The “Ford F-Series” model nameplate comprises ALL Ford truck sales, including Super Duty and the Commercial F-650 and F-750.

    When compared to Ford, GM truck sales numbers shouldn’t just consist of Silverado and Sierra. That gives Ford an artificial advantage. There’s also GM’s Colorado, Canyon, their Commercial Low Cab Forward truck to consider.

    The midsize pickups are something Ford (at least at the moment) has no answer for, but that doesn’t mean they shouldn’t count towards GM’s total pickup sales. They ARE pickups, after all. Pretty big ones, too.

    Add all of GM’s offerings in the truck segment (Silverado/Sierra/Colorado/Canyon/LCF) and their November sales actually EXCEED Ford’s offerings in the truck segment (F-Series/Super Duty/F-650/750):

    GM: 76,513
    Ford: 72,089

    That’s a GM advantage of 4,424 trucks, a difference nearly equal to the total number of Camaros sold in November.

    • 0 avatar
      Lou_BC

      philadlj – years ago I read an article where a journalist asked GM why they reported Sierra and Silverado separately. The reply was that they are legally obliged to do so. Sierra is a badge under the GMC brand and Silverado is a badge under the Chevrolet brand. They are separate divisions.

      Small trucks count separately. When Ford had the Ranger it was never included under F – Series. Same for GM or Dodge/Ram.

      The myth that Ford lumps everything under the F Series banner is just that, a myth.

      Ford reports all sales up to and including the F450 under the the F Series banner. F550 and up are reported as commercial truck sales.
      Ram does the exact thing as Ford. Everything up to 4500 is counted as a Ram and anything bigger is a commercial sale.
      GM obviously does not have any trucks bigger than 3500 unless you count rebadged Isuzu’s.

  • avatar
    FreedMike

    Am I the only one who wonders whether the election had something to do with this kind of inventory glut?

  • avatar
    John

    JD Power reports this month that 31% of folks with new car loans are underwater, with an average negative equity of $4,800. That does not spell booming new car sales.

    • 0 avatar
      Middle-Aged Miata Man

      Twenty percent “off” MSRP on a decently equipped Impala wipes that out nicely. It’s not like GM will be cutting many checks for that difference.

      (Well, they will, but it will be to pay off those underwater trade-ins as buyers celebrate that their payment only went up $150 a month.)

      Now, what comes next when that bubble finally bursts, on the other hand…

    • 0 avatar
      SCE to AUX

      On the other hand, that means 69% of new car loans are ‘above water’.

      My 60-month new car loan from mid-2014 just went above water, but I’ve been paying extra for a while now, and will finish in Dec 2017 – about 1.5 years early.

      The interesting/disappointing part of this is I got 25% off MSRP at purchase, and the car has still been upside down until now. :( I hate to give fuel to Kia critics.

  • avatar
    zip94513

    The incentives weren’t any better in November than they were 5 years ago.

  • avatar
    jjster6

    @Whiskeyriver…

    I don’t think you understand how desperate things were at the time of the GM bailout. Banks were near collapse. McDonalds and many of their franchisees nearly didn’t have access to cash to make payroll. This wasn’t 1%’ers getting bailed out, this was the whole financial system getting a bailout. If GM failed today the assets would get picked up and the world would carry on. Cash is available. In 2009 that wasn’t the case. Credit markets were frozen. Banks were near collapse (and Lehman did collapse).

    The auto industry bail out cost $10 billion. Chump change compared to the trillion dollar cost and years of lost productivity caused by a GM failure. That was one of the best expenditures ever made by the US government.

    Also, before the bankruptcy GM had a lot of inventory, very little cash in the bank, lots of debt payments coming due, factories operating at 50% capacity, and a poor product line up. The case couldn’t be more different today. And if gas goes to $4 a gallon, GM has a lot of very desirable cars in the line up that don’t sell well in today’s CUV/truck crazed market.

    I think you need to pay more attention to critical analysis backed up by data and less to emotional rants.

  • avatar
    Frylock350

    The title of this article got me excited. I’m in the market for a Suburban, maybe there’s a deal to be had. Nope.

    Checked Chevrolet’s site for current incentives and I found:
    2017 Suburban: $500 cash back
    2016 Suburban: $1500 cash back

    Or if I decided to get a new truck instead:
    2017 Silverado CC: $1000 cash back
    2016 Silverado CC: $3000 cash back

    These aren’t any special deals and $500 cash back on a $55k vehicle is a joke.

    Looking at the deals advertised in the article, $5000 cash back on an Encore is a good deal. The $8688 off a Sierra is disingenuous and I despise advertising like that. The real incentive is $4000 cash back which is good, not fantastic. The option package “discount” isn’t. You’re just paying what GM charges for that option package; that’s what an option package is. Pretending is some kind of discount and adding it to the price off the truck is misleading. Also noted that money off MSRP is included here as if that wasn’t something you get any time you buy any new vehicle. I’ve never paid MSRP for a vehicle; hell I’ve never paid invoice. This is money you always get and has to do with how well you negotiate with the dealer; it has no place in an advertisement. Advertise $4k cash back and that’s it.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Vulpine: The reason I question the report is that some of the statements attributed to Tesla and Panasonic...
  • Fordson: There is no way to keep you car from rusting here…the best policy is to have a winter beater and a...
  • MiataReallyIsTheAnswer: Ha- I get snow but the Stinger I nearly bought was gonna be RWD for hoonability and lighter...
  • rpn453: Canadian prairies here, so usually a vehicle is pretty worn out by the time rust becomes more than a cosmetic...
  • Vulpine: I question the validity of the report, despite it coming through the Nikkei. I think the Nikkei has been fed...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States