GM, Ford dealers boost discounts on big trucks

08 Feb, 2014

DETROIT: General Motors Co is boosting discounts on full-size pickup trucks by thousands of dollars to keep pace with competitors and to whittle down bulging inventories on dealers' lots.

Dealers for rival Ford Motor Co, meanwhile, are also offering hefty discounts.

GM is running a national Presidents Day sale through February 28 at Chevrolet and Buick-GMC dealers that provides incentives of up to $7,092 on the 2014 Chevrolet Silverado and up to $7,588 on the 2014 GMC Sierra. The more generous discounts are being implemented just eight months after the redesigned trucks hit the market last summer.

Ford, whose full-size F-series pickup has been the best-selling U.S. truck for 37 years, is providing much lower incentives of up to $3,250 on its big trucks. The F-series is due for a major overhaul late this year.

But many Ford dealers are advertising much richer deals on the carryover 2014 F-Series, with discounts ranging up to $9,000.

On its website on Saturday, Mac Haik Ford in Georgetown, Texas, was selling a 2014 F-150 XLT for $36,315 - a discount of $8,790 from the suggested retail price of $45,105. At Marysville Ford in Washington state, a similar 2014 F-150 XLT was being offered for $8,360 off the $39,355 sticker price.

Chevrolet dealers are countering with even heftier deals, some much cheaper than GM's official Presidents Day specials.

Jeff Belzer Chevrolet in Minneapolis on Saturday advertised a 2014 Silverado 1500 for $20,084 -- $10,576 off the sticker -- while Wilsonville Chevrolet outside Portland, Oregon, listed a 2014 Silverado 1500 Crew Cab for $30,410, a discount of $10,705 from list price.

Since its new trucks were introduced in mid-2013, GM has struggled to keep pace with Ford.

One bright spot for GM has been a significant increase in the average transaction price, after incentives, on the pickups, which had lagged well behind Ford just a year ago. According to research firm Kelley Blue Book, the average transaction price on the Silverado in January jumped nearly 12 percent to $40,575, while the transaction price on the F-150 remained nearly static from a year ago at $40,672.

But inventories of unsold trucks have been building at both automakers. At the end of January, Ford had a four-month supply of F-150s, while Chevrolet's supply of Silverados had climbed to five months. A two-month supply is considered ideal.

GM's pickup sales also fell in January, partly the result of bitter weather and partly because the company has yet to begin selling heavy-duty versions of the 2014 Silverado and Sierra.

Combined sales of the Chevy and GMC pickups plunged 17 percent to 40,044, while Ford's F-Series sales dipped 1 percent to 46,536. A year ago, before their overhaul, the Silverado and Sierra together outsold the F-series in January.

Heavier incentive spending on the big trucks is likely to cut into profits at both companies, although full-size pickups remain among the most profitable vehicles in the industry.

Full-size pickups and sport utility vehicles account for more than two-thirds of U.S. automakers' global pre-tax earnings, even though they make up just 16 percent of North American vehicle production.

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