2014 GM Pickups Struggle With Competitors' Higher Incentives

2014-chevrolet-silverado_1500 DC II

What happens when a truck maker releases a new pickup at the same time its competitors offer huge incentives on their current models? If you look at last month's sales numbers, you'll see both of GM's pickup truck brands — the Chevy Silverado and GMC Sierra — fell when compared to last year's monthly sales numbers. Much of that, says Automotive News, is because both the Ford F-150 and Ram 1500 have significant incentives on the hoods of those trucks.

In some cases, Chevy dealers have a 170-day supply of Silverados on the lot; normally, that number is 110.

Some experts wonder how long General Motors will be able to keep from dipping into the tried-and-true strategy of heavily discounting transaction prices with incentives to increase sales and marketshare. It should be noted that GM has some of the segment's most profitable transaction prices.

Dealers, on the other hand, are confused that GM recently added customer cash to help shrink inventories and then promptly raised all the sticker prices on most 2014 half-ton Silverado and Sierra models anywhere from $1,500 to $1,950. GM incentives are down 32 percent for the Silverado 1500 and 36 percent for the Sierra 1500 from September 2012, according to Automotive News.

 

Comments

Why is everybody assuming that is it just the price that is driving people away from dealers? It seems they're so quick to write off Ford and Ram as being inferior vehicles just because they're a little longer on the market.

I think Chevy missed the design ball here a little bit and people are showing it by just not flocking to get an "all new" truck that looks so much like the outgoing model.

LOL Ford needs $9,000 on the hood to move their very outdate trash and, Ram offering numbers close to that on their new trucks. Mean while sales are a little on slow side, but GM rakes in big profits! Hang tough GM you will come out on top in the long run with more profit and sales GM FTW!

They ran their old model on a fire sale for a year just to maintain sales, but they still lost market share. Then they announced they had no price increase for the new models, but turned around and raised prices substantially. Buyers are fed up with their games. If this new model is truly a great truck, the sales will come back eventually. Unfortunately they burned some bridges and will need to earn consumer trust again.

Ford's already building 2014's, which will also be very competitively priced since it is the last year for that model. They will have all sorts of creative packages and discounts, and offer the most bang for the buck. And in only a few months Ford will be showing off the 2015 model for mid 2014 production. Those 2 things will pull a LOT of attention away from GM's twins. Then think of Ram trucks and the new things they are gradually rolling out now too. They are picking up market share and getting rave reviews and awards. This is GM's time to get sales rolling, so they'd better take advantage of the new model while it's till new. This time next year the 2014 GM trucks will be the oldest design of the big 3.

You should be able to get 10-12K off the sticker price on well optioned crew cabs on anthing but the GM and maybe the Tundra. I have been pricing new trucks and all them are giving me 10K off to start with except GM. I think a lot people don't like the look of the GM trucks they look very old fashioned to most people. The do have about the best mileage with there new V8 but thats about it.

The headline for the story questions GM's timing, without ever mentioning the country's dreadfully weak economy.

How do working people add big increases in their health premiums, rising taxes and high unemployment to the topic and still buy a new truck. That math does not work.

Big fabulous half ton trucks were the hot ticket 6-8 years ago because people had jobs, construction was booming and prospects for future growth looked good, at the time.

My 2009 Silverado is running strong, has only 50k miles and it's going to be another year or more before I can even consider another $700 per month truck payment.

GM is in deep trouble.

Engines: GM is desperately running ads that the new Silverado is better than EcoBoost. But people are finding out that the new Silverado only 1 mpg better in fuel econ and way down on hp and torque.

Interiors: People are finding out that the GM upper trims may have better soft touch interior materials, but the Ford and Ram higher trims both LOOK better
People are finding out that the crewcabs are not as roomy as the Ford. People are finding out that the crewcabs blow hot air on rear passengers. All of this was featured in GMI's review just days ago - a pro GM site.

Features: People are finding out that their version of the man step is still too high and defeats the purpose. People are finding out that the butt buzzers are not really needed.

Pricing: Nobody to blame but themselves. GM have just been honest up front about the price increase. GM stated they knew that there was going to be an increase and that this was their plan. If that is the case, they shouldn't have lied to buyers and stated that the prices were not increaseing. Moreover, don't say you're going to give $1500 off to attract buyers and then "promptly raise prices" by that much or more.

It is a mess and is only going to get worse when the new Fords debut in January and Ram continues to gain interest.

GM went too concervative with these. For evryone who says Ford and Ram have to give big incentives to sell their trucks are idiots! It's that time of year, clear inventory to make room for the 14's comimg in. GM is the only one loosing market share. Gotta wonder?

The thing is, GM raised the MSRP of all these trucks, then added incentives. Net, the price is the same, or worse.

Then, this is a 2014 truck that is staying around until mid-2014: Ram and Ford are clearancing 2013's right now with no brand new models in the pipeline (with the exception of Ram having a diesel, but that won't be available en masse on dealer lots until after the first of the year).

So, yah. GM will probably have an easy time selling through its remaining 2013 model year inventory, if it has any in significant numbers, but they are putting brand new trucks against last years heavily discount trucks right now. And at prices that aren't that competitive.

This truck will be competitive (price wise) against the 2014 Ford and Ram products, but buyers are taking 2013 deals right now.

GM added the incentive. Then a week later rasised the prices. This is bait and switch.

As much as I like GM and have been a fan for life, they've royally screwed the pooch with this new truck. From design to packaging options to pricing, it's one big screw job. I have been trying to build a Silverado on their website only to have it either crash or not be fully functional for weeks. Last time I tried, you don't even get 20" rims on the top trim (right now), the LTZ package. You either get 18" rims or 22" rims for another $2K. If you want the 20" rims, you HAVE to get the Texas Edition package which is a rip off to begin with, and that cost you $2,200. The Texas Edition use to mean chrome door handles and mirror caps, fog lights, the 5.3 liter engine, and 20" chrome rims. The Texas Edition on the 2014's is now bulky running boards which I don't want, and 20" rims for the LTZ model. What!!??? So basically, GM found a way to charge an extra $2,200 for what use to be standard equipment? Go F*** yourself GM!!! This whole reversal of what the Texas Edition consists of has really turned into bigger profits for GM and screwing it's customer!! We're not stupid GM!!!! You can't even buy an LTZ without the Texas Edition right now. Every single LTZ truck in Texas has the pricey Texas Edition on it and it's just more money for the dealer and GM. What a freakin rip-off!!

Seriously, GM needs to fire every moron that had anything to do with this truck, from the design to marketing and start fresh. It's a MAJOR screw-up and GM is going to find out the hard way. Also, the commercials about "a woman and her truck" are embarrassing! Ford's commercials are about being tough and dependable with steel and rocks, and GM has commercials about a kid, a woman, some rain, and a truck? What!!!!!????? I'm confused and I think the commercials are ridiculous. Right now, after 24 years of buying Chevrolet, I've given up on them. Their other models/vehicles like the Corvette and Impala are awesome, but these morons running the truck division need to be fired. All of them!!!!

Its that time of year when truck makers usually throw money on the hood to move trucks anyways so whats the big deal about that? The big question is how could a company actually go through and design an inferior truck (or anything for that matter) when you competition already has a better 1/2 ton that whose current generation has been on the markets since what, 2010? Hell they are beating you in Super Duty sales with a platform that has not seen much updates since 1999 :O Let that sink in for a minute folks...

When you compare the GM's to the Ford & Ram trucks, they lose.
Not a good thing when the 2014 GM trucks are not as good as the 2013 Ford & Ram.
Who cares about fuel economy when you can get 50 more horses for 1 mile per gallon penalty.
I feel the more power you have, the less throttle input needed to move the same weight.
Most people can't tell the difference between the 2013 & 2014 GM trucks, oh yea, a new grille.
GM should have waited & done this truck with a total redesign.
To me, GM flooded the market when clearing the 2013's out & who is going to trade a 1-year old truck in? Unless it's on another manufacture.

If this trend continues I wonder if GM is going to rush an emergency refresh out like they just did for the 2014 Malibu. Either way it doesn't bode well for a completely redesigned cash cow vehicle like the LD truck market.

And what's with the same ugly colors from 2001? They couldn't even come out with some different/unique and interesting colors for their "all-new" trucks??? Right now both Ram and Ford are offering some really cool colors (blues, greens, rust, and others) and GM has the same old blue granite, brown, and same old ruby red besides the standard white, black, and red.

I'm telling you, GM thinks they've hit a home-run with this truck but sales are going to prove otherwise and I'm glad because I think this is the kick in the ass that the GM truck division needs as a wake up call. They've half-assed this truck from the beginning and have tried selling us on it, thinking that we're ignorant and uneducated customers, and they're WRONG! This should have truly been an all-new design, not just a facelift with direct injection added. All they've basically done was come out with an update that should have been done 3 years ago. Ram and Ford have figured it out and their sales are proving it. Listen GM, you can't $hit in my coffee and call it Nutmeg and think that I won't know the difference!! Instead of a new Silverado, I'm looking at a 2014 Ram. F*** GM!!

i can't tell the difference between a '99 Super Duty and a '14 Super Duty. the same goes for a 2004 F-150 and a '14 F-150. LMAO just a different grille! LMAO

There are multiple factors affecting GM's new trucks.
1. The "raise the bar" campaign has shown that the bar was set too low. They targetted the market as if it were a stationary target. GMC has a slight mpg advantage but that is about it.
2. The Chevy trucks are already looking "old". I loved the looks of the 2014 Silverado when it first came out but as I see more of them I have 1980's flashbacks. The Sierra all of a sudden looks better.
3. GMC waited too long to update the GMT900's. I believe that they lost customers due to that.
4. The economy is still weak and GMC's we won't raise the price, then offer a rebate, and raise the price the same as the rebate crap hurts their credibility.
5. Truck buyers have gotten used to big rebates.
6. The competition still has more options and better features.
7. Ford has said that they are doing so well that they can play the deep discount game as a hold over until the next gen trucks come out.
8. The current Ram is a refresh and it beats the GMC siblings in virtually every category. Ford's aging F150 is still competitive.

If one wants to play the "cliché game", a "Perfect Storm" of factors are playing against GMC. They could try to ride it out but I doubt they will be able to.

@Chris Why don't you go to the dealer ship and ask if you can trade the rims for the size you want and have them take the running boards off to save money if you don't want them?

For years GM told us GM trucks weren't selling as well as the competition because they had the oldest product and the Fords were the newest. Now they have the newest and the Fords are older, and the GM's are are selling even worse.

According to the AP via TrueCar, Ford spent $100 more than the GM and Ram spent $700 more in discounts.

If GM can't sell an "all new" truck that has "more features including increased gas mileage" because of a lousy $100 to $700 discount on older trucks from Ford and GM then GM needs to go back to the drawing board.

And just wait until next year, then the GM's will look really bad.

@George How? Next year GM will have an 8 speed trans and more light weight aluminum body parts so performance and MPGs are getting to be better once again (mid 2015). Then most likely a bump in HP and TQ when Ford shows their cards (late 2015) and a 10 speed trans again best MPG and awesome performance. Then after all that it will be time for a body and interior refresh(late 2016 early 2017). GM is in a great spot Fords going down all while GM rakes in big profits and gains back market share.

They make great trucks, they just probably need better marketing. GM is still tryna get on their feet right now from the bankruptcy so its harder for them to jump out and take risks like the other 2... So right now they just tryna build a solid dependable truck to start with and then the other stuff like " extra colors, packages and luxury trims etc. like the other 2 will come later. GM is not stupid, they are watching the market just like every one else. People act like the other two trucks could fly or something.

@Lou, Just wait for the new 8 speeds.

"Also, the commercials about "a woman and her truck" are embarrassing! Ford's commercials are about being tough and dependable with steel and rocks, and GM has commercials about a kid, a woman, some rain, and a truck? What!!!!!????? I'm confused and I think the commercials are ridiculous. Right now, after 24 years of buying Chevrolet, I've given up on them. Their other models/vehicles like the Corvette and Impala are awesome, but these morons running the truck division need to be fired. All of them!!!!"

I know how you feel and I feel the same way. The ads and the new pitchman are terrible.

Answer: Howie Long. Bring back Gary White and Howie Long. They need to fire the marketing team. I don't care what anyone says Howie Long was a great pitchman and the half tons were selling like hotcakes bck then. Howie Long must come back. Are you listening GM?

Dear GM,

Get rid of the new guy and bring back Howie Long!!!

http://www.youtube.com/watch?v=kPHfg8tPH-A

Chevy Silverado. An American Revolution!!!

Johnny Ford is going to show its cards next year in mid 2014 for a new 2015 model... not until the end of 2015. GM is in deep trouble. They made a bet and it now looks like they bet wrong and are losing. Ford is kicking GM's teeth in with an older yet proven platform. What you think will happen when the all new F150 makes a bow NEXT year and the new SD shortly after that?

I am pretty sure there will be a new SD to follow the half ton within a year. Ford is just moving ahead with the motor updates in the current gen now.

@ johnny doe
The 2015 F-150 will be lighter, look better, have a 10 speed tranny out of the gate, an add a more fuel efficient engine to the line up! How will GM compete with that?

Dear GM:
Bring back Howie Long.

It's the legend in off-roading!
http://www.youtube.com/watch?v=bYaLz3-QRos

GM, Are you listening?

Bring back HOWIE LONG!

@Fred
@Johnnie Doe

- I like the new GMC siblings. With that being said, they are barely competitive NOW and all of the refreshes under the sun will not help them as Ford and Ram still have new platforms to unveil.

Ford will have the same transmissions as GMC at the same time. The programiing will be different.

Just ask Jeep about the Cherokee.
The LandRover Evoque uses the same transmission as the Cherokee.

That could turn out good or really bad.

@Fred - GMC needs to rekindle the same feelings that came from the "Like a Rock" and "Heartbeat of America" commercials. No attack ads or getting in touch with one's feminine side.
No cheap shots, BUT no apologies.

The message needs to be -
"we build a kick ass truck".
Take it or leave it!

Howie Long didn't make a difference! It's the product! The last generation looks better than the new trucks, period!

johnny does is a moron, why even bother debating with that idiot.

If GM just raised the price $2. from the start they could have had the Howie Long ads paid for, increased sales and made more money. There is still time to bring back Howie Long. GM, are you listening?

http://www.youtube.com/watch?v=ORzJzn0MyIg&list=UU9HGh_5dIlp-cjQdjuPn2yg

Jim, It is the product, but it is also the ads. I can't place all the blame on the product when the ads are not transmitting the right information to the buyers!

The new pitchman and ads featuring a geeky guy, a woman and a kid and her truck have been an utter disaster and have done enormous damage. The marketing team is a disaster and needs to resign. The whole thing reeks of Government Motors incompetence.

One thing can fix it - Howie Long! Also the like a rock/built tough ads. A combo of the two should be considered ASAP.

Fred, I agree I love the new Corvette, and my parents just bought a new Impala and it is a sweet ride. Seems they put all their resources into the cars and left the trucks.

This does not surprise me in the least bit. The timing and the amount of GM's price increases have hurt them. It is no surprise that Ford and Ram are using large discounts in order to take advantage of this misstep by GM. The economy is far from full recovery and this price increase could not come at a worse time.

It may be beginning to dawn on GM that a no-name geeky guy pitchman, and a woman and her truck ads have been an utter failure.

A Woman and Her Truck | Chevrolet
http://www.youtube.com/watch?v=3RgGTdnQICM

Bring back Howie Long!

Incentives do mean something to many buyers, but you could not give me a Ford or Ram pickup. I want a truck that will last longer and cost less to own, and that truck has to be a Chevy or GMC.

LOU BC They already have ads like that.

http://www.youtube.com/watch?v=4ppmYNg4tVM

This truck is going to get little touches all the way up to 2017 then a total refresh. It won't be the same truck lots of tech is going to roll into these truck over the next 4 years.

@Frank if you wasn't high jacking my name try to make me look like a moron go crawl back in you're hole till you have a useful comment besides name calling and trolling like a 5 year old.

GM has the best full size half ton on the market. They ought to hold the line, charge more even if it hurts sales a bit. Those rebates are costing Ford and Ram money, let's see how long they can take it. Particularly Ram, with the whole Chrysler Fiat fight going on, they are going to be on shaky financial ground (again).

Most comments so far are a great indication on why Chev sales are decreasing.

1. What is the value of recommended retail prices in the US? They don't mean very much when people tend to buy on the bottom of a price cycle.

2. There are brand loyal consumers, but how loyal are consumers? It seems price dictates brands purchased more than the phan boi's would admit.

3. The US economy isn't in a very good state. The recovery is patchy. It will not take much to upset the small growth that has occurred over the past couple of years.

I also think GM itself has the wrong overall strategy for itself. It still is using the 'old Detroit' model of trying to sell the most. Could GM think every car they sell stops another from selling? Rather than thinking about profit per sale.

Being and having the mostest, biggest, etc. doesn't translate into profitabilility.

In the end of last year and beginning of this year GM had pickups everywhere and heavily discounted. This is when they started to compound their current problem.

There are so many who will buy a Chev pickup and it appears it is related to cost. Brand loyalty is reducing, like everywhere else on the planet.

When you don't have much money you will buy what you can afford before a brand name. That's why the Chinese sell so much.

Like I've stated in the past pickups will become less affordable. People will eventually buy other products.

How much longer can Ford and Fiat keep prices down?

I read every comment on here and not one of you mentioned a big factor in this equation. They still don't have their full line-up of trucks available. Isn't it a bit premature to say they are a failure until they have the lot full of every motor, body and trim option??? Agreed their marketing and strategies could be better and they were very conservative with the restyle but they are still great trucks... do yourselves a favor and drive one before you go jump on the "they must suck" bandwagon!

@Big Bob, $100 bucks isn't going to hurt Ford.

Ford, which has an older truck with a lower base price, spent about $100 more discounting the F-150, while Chrysler spent nearly $700 more ..
http://www.fool.com/investing/general/2013/10/16/gm-raises-silverado-price-will-bigger-incentives-f.aspx.

@ Big Bob
I think this might be the first time I have ever responded to one of your comments.

You are full of $hit. You come out with totally unremarkable comments that are baseless dribble, have live meaning or credibility.

How the fu#k can you talk $hit. Really, it appears price dictates sales. Phan boi'sm is only for the few, like yourself, you go out and pay more for a Chev, but by sales numbers it appears most don't give a damn what brand they have.

Sales are indicating that each product has its positives and negatives. The pickups are that closely matched that it doesn't take much to persuade a consumer to change or buy a different product.

@Big Al from Oz GM isn't stuck in 'old Detroit' model of trying to sell the most or the would have 9,000 on the hood too. They are putting profits in thought first.

(The situation underscores the challenge GM faces in achieving CEO Dan Akerson's twin goals of boosting U.S. market share while also lifting North American profit margins to 10 percent, from 7.6 percent last year, which would put it closer to Ford's)

Read more: http://www.autonews.com/article/20131021/RETAIL07/310219846/pickup-truck-price-gap-riles-gm-dealers#ixzz2iU3GkgN1


(Still, executives say they would rather hold the current pricing on the Silverado and Sierra than lower it to chase market share. GM is advising dealers to sell the truck on its merits, such as best-in-class fuel economy, power, and tow ratings, as discounts to match the competitions are not available.)

Read more: http://gmauthority.com/blog/2013/10/price-incentives-on-competitive-models-stymie-gm-2014-truck-sales/#ixzz2iU3lVAyL

@johnny doe
I do agree that any company wants to increase profitabilility.

How they can achieve that is a different story. You can increase prices or restructure. Restructuring isn't easy, you have 'committed old school' management, UAW, government regualtions, etc to use most efficiently. Some of these challenges are awkward to overcome.

I know where I work we have an ingrained culture, it took decades to get where it is.

The organisation now wants to change direction. I look at myself and say do I fit in? No, I only half fit in.

Will they fire me? No. Why? Because my corporate knowledge is worth more than the profit or improvement they are after. In other words I have the knowledge to make the change they want, but it will take time.

GM is structured to work as a team and it will be hard to change in a short period of time. Unless, you go through remove the useless UAW and worn out old school management.

Like I stated look at the change that Sergio has made at Chrysler. Sure it has hurt them in the short term with pathetic vehicle launches etc, but once they can organise themselves and work as a team they will improve.

These are the problems that Detroit is encountering. Chrysler had to use a sledge hammer to make the changes so far. GM hasn't gone to those lengths.

Recommended prices are just that, they don't have meaning other than some marketing power.

GM isn't in the best possible position. They have been relying on 'taking' sales away from other manufacturers at a cost.

If GM want to go down the path they are heading another manufacturer that is better run will take those sales.

GM need to look at themselves to increase profit, and not just pricing. It's easy to run a business less efficiently and increase prices to make up for shortfalls. But to do it competitively is harder.

GM has decades of culture to overcome, this takes years to change.

@ Big Bob
I think this might be the first time I have ever responded to one of your comments.

You are full of $hit. You come out with totally unremarkable comments that are baseless dribble, have live meaning or credibility.

How the fu#k can you talk $hit. Really, it appears price dictates sales. Phan boi'sm is only for the few, like yourself, you go out and pay more for a Chev, but by sales numbers it appears most don't give a damn what brand they have.

Sales are indicating that each product has its positives and negatives. The pickups are that closely matched that it doesn't take much to persuade a consumer to change or buy a different product.

@ Big Bob
I think this might be the first time I have ever responded to one of your comments.

You are full of $hit. You come out with totally unremarkable comments that are baseless dribble, have live meaning or credibility.

How the fu#k can you talk $hit. Really, it appears price dictates sales. Phan boi'sm is only for the few, like yourself, you go out and pay more for a Chev, but by sales numbers it appears most don't give a damn what brand they have.

Sales are indicating that each product has its positives and negatives. The pickups are that closely matched that it doesn't take much to persuade a consumer to change or buy a different product.

Here's the BIG problem for GM, Ford, Ram, etc.
In my opinion and experience, the "perceived value" of a well optioned 1/2 ton, V-8 (or Ecoboost), Crew-cab, 4x4 is $35,000 - $38,000. However, the MSRP for that truck is $45,000-$50,000. That's a HUGE problem for truck manufacturers. In Business School, you learn that there IS a maximum price that someone is willing to pay, and it based on this perceived value or "utility" that they will receive from purchasing or owning the truck. In my opinion, truck manufacturers have hit the ceiling, which means they have a problem. They want to make a $10,000-$15,000 profit on each one of these trucks. I think those days are gone. I think you are going to start seeing some de-contenting, and cheapening to drive prices back down. $50,000-$55,000 1/2 ton gas trucks are NOT going to fly off the dealership lots. NOT in this economy. Maybe not in the next 10 years.

@Frank if you wasn't high jacking my name try to make me look like a moron go crawl back in you're hole till you have a useful comment besides name calling and trolling like a 5 year old.

Practice what you preach you damn TROLL! You are like usless, how many miles on your 2011 Chevy now, 500,000, fken retarded.

@ nlp, but they ARE flying off dealer lots. Ram dealer lots. Ford dealer lots. Just not GM dealer lots. Read the article from the Automotive News that this site is referencing. Then read the many comments below it. Many are from GM dealers. Read about their plight. It's not pretty. Now read the monthly sales numbers on this site and notice how truck sales continue to grow each month. Then look at the slowest growing, and even declining sales of GM. Connect the dots.

Hey Frank can you even make a comment with out name call or trolling? I doubt it you never post any useful information its pretty sad really.



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