GM Sales and the Pickup Price Puzzle
In June, NPR made passing mention on air of a pamphlet circulating in Paris, intended to help Parisians understand foreign visitors. Americans, the pamphlet explains, like to know prices are fair. This “getting a good deal” mentality is what some in the car industry believe is behind recent price increases by General Motors (NYSE: GM).
Vehicles affected by the change are the 2014 Chevrolet Silverado and the GMC Sierra full-size pickup trucks. Dealers learned the pickups were getting a price pick-me-up on October 7, according to Reuters. The price of each vehicle will be raised 6 percent, or $1,500, which is also the amount of money buyers can receive through cash-back incentives if they buy before the end of october. Reuters further reported that analysts believe the trucks and their respective SUVs net a profit of $12,000 per vehicle for General Motors.
The incentives being offered so quickly after the price hike was announced struck some as a gimmick. Speaking with The Detroit News, Michelle Krebs, a senior analyst at Edmunds.com, said, “They can raise the price, but by having an incentive, it looks like they’re still offering a deal against the competitors.”