GM ramps up truck discounts
Wednesday, May 09, 2007
GM ramps up truck discounts
Free financing, rebates offered for Chevy Silverado, GMC Sierra
Sharon Terlep / The Detroit News
General Motors Corp.'s new full-size pickups just got a little cheaper.
The automaker, aiming to increase sales of its redesigned 2007 Chevrolet Silverado and GMC Sierra in a slumping pickup market, increased incentives on the trucks and for the first-time will offer zero-interest loans on new models.
New deals on the trucks let customers choose between free financing for up to 36 months or between $1,250 and $1,500 cash back on the 2007 models. The previous offer was reduced-rate financing and $750 to $1,250 cash back. Other offers are available on 2006 models.
The deals run through July 9.
In addition, dealers informed The Detroit News of two other unadvertised discounts on the trucks: Dealers can offer $1,000 in bonus cash on Silverado and Sierra models that have been sitting on dealer lots for 90 days or more; and they have the discretion to offer up to four $250 discount coupons to buyers of the new pickup.
GM is walking a fine line in the incentive battle, looking to stay competitive without abandoning its strategy of limiting discounts that cut profits and lower resale value.
"We've been tactical and strategic in how we're responding to the competitive action out there in the market place," GM spokesman John McDonald said. "We're seen a lot of incentive spending by our competitors."
GM has increased its share of the full-size pickup truck segment to 38.8 percent from 36.7 percent this year through April, despite intense competition that includes Toyota Motor Corp.'s first ever full-size Tundra pickup.
Overall, GM's full-size pickup sales are about flat this year to date through April.
While that's better than most competitors, the performance has fallen short of what both GM and analysts expected given that the trucks are completely new and heavily advertised.
"The good news is that although the industry is down overall, GM is up," said Jesse Toprak, chief economist for Edmunds.com. He said a double-digit gain should be the target with a new truck line.
The new Silverado and Sierra, launched late last year, have been well received by critics and the public. Even so, they're taking longer to sell than the outdated models they replaced, and are leaving showrooms with only a few hundreds dollars less in incentives.
Big pickup sales are suffering in the midst of a prolonged slowdown in the U.S. housing and construction markets. Truck sales depend heavily on contractors who use the vehicles for work.
Industrywide, full-size pickups, which account for 22 percent of vehicle sales for Detroit's automakers, were down 10 percent in 2006, according to Autodata Corp.
Sales for the segment were down another 5 percent for the first four months of 2007 compared with the same time last year.
Competition is intense, between Toyota's surprising incentives on the new Tundra and discounts as high as 20 percent on pickups from Ford Motor Co. and the Chrysler Group's Dodge Ram division.
McDonald said GM's internal numbers for the trucks, which account for two fewer selling days in April, show sales up 3.6 percent year to date.
"The bottom line," he said, "is that more people are choosing our trucks over our competitors."
You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.
© Copyright 2007 The Detroit News. All rights reserved.
GM ramps up truck discounts
Free financing, rebates offered for Chevy Silverado, GMC Sierra
Sharon Terlep / The Detroit News
General Motors Corp.'s new full-size pickups just got a little cheaper.
The automaker, aiming to increase sales of its redesigned 2007 Chevrolet Silverado and GMC Sierra in a slumping pickup market, increased incentives on the trucks and for the first-time will offer zero-interest loans on new models.
New deals on the trucks let customers choose between free financing for up to 36 months or between $1,250 and $1,500 cash back on the 2007 models. The previous offer was reduced-rate financing and $750 to $1,250 cash back. Other offers are available on 2006 models.
The deals run through July 9.
In addition, dealers informed The Detroit News of two other unadvertised discounts on the trucks: Dealers can offer $1,000 in bonus cash on Silverado and Sierra models that have been sitting on dealer lots for 90 days or more; and they have the discretion to offer up to four $250 discount coupons to buyers of the new pickup.
GM is walking a fine line in the incentive battle, looking to stay competitive without abandoning its strategy of limiting discounts that cut profits and lower resale value.
"We've been tactical and strategic in how we're responding to the competitive action out there in the market place," GM spokesman John McDonald said. "We're seen a lot of incentive spending by our competitors."
GM has increased its share of the full-size pickup truck segment to 38.8 percent from 36.7 percent this year through April, despite intense competition that includes Toyota Motor Corp.'s first ever full-size Tundra pickup.
Overall, GM's full-size pickup sales are about flat this year to date through April.
While that's better than most competitors, the performance has fallen short of what both GM and analysts expected given that the trucks are completely new and heavily advertised.
"The good news is that although the industry is down overall, GM is up," said Jesse Toprak, chief economist for Edmunds.com. He said a double-digit gain should be the target with a new truck line.
The new Silverado and Sierra, launched late last year, have been well received by critics and the public. Even so, they're taking longer to sell than the outdated models they replaced, and are leaving showrooms with only a few hundreds dollars less in incentives.
Big pickup sales are suffering in the midst of a prolonged slowdown in the U.S. housing and construction markets. Truck sales depend heavily on contractors who use the vehicles for work.
Industrywide, full-size pickups, which account for 22 percent of vehicle sales for Detroit's automakers, were down 10 percent in 2006, according to Autodata Corp.
Sales for the segment were down another 5 percent for the first four months of 2007 compared with the same time last year.
Competition is intense, between Toyota's surprising incentives on the new Tundra and discounts as high as 20 percent on pickups from Ford Motor Co. and the Chrysler Group's Dodge Ram division.
McDonald said GM's internal numbers for the trucks, which account for two fewer selling days in April, show sales up 3.6 percent year to date.
"The bottom line," he said, "is that more people are choosing our trucks over our competitors."
You can reach Sharon Terlep at (313) 223-4686 or sterlep@detnews.com.
© Copyright 2007 The Detroit News. All rights reserved.
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