GM’s Pickup Prices Are Trucking Things Up for Dealers
This summer, General Motors (NYSE:GM) was all about the launch of its highly anticipated next-generation pickups, the 2014 Chevrolet Silverado and GMC Sierra. Recognizing that a recovering economy coupled with a recovering U.S. auto industry translated to more interested American buyers ready to drive the redesigned trucks, GM rolled out an expensive marketing campaign and encouraged dealers to tout the new vehicles’ many alluring features. The problem the automaker now faces, however, is that no one is willing to buy them.
According to Automotive News, dealers are complaining about flattened demand for the new Chevy Silverado and GMC Sierra, and they blame the vehicles’ high price tags for consumers’ lack of interest. Though the dealers recognizes the trucks’ merits, they insist that GM needs to offer more alluring offers that counteract competition from heavily discounted Ford (NYSE:F) and Chrysler Ram trucks, but GM has so far refused.
That’s because the U.S. automaker recognizes that it is selling new redesigned pickups while its competitors are in sell-down mode, meaning they’re willing to highly discount their vehicles just to get them off the lots. The price of a popular Silverado model, for example, is $43, 005 after factoring in incentives, while the 2013 F-150 model is $40, 385, but GM execs maintain the position that this is a temporary period that will soon end, and GM spokesman Jim Cain explains, “You don’t ever want to let the oldest trucks in the market dictate strategy for the newest and best truck in the market.”