GM boosts pickup truck deals to shed inventory

Published on NewsOK Modified: December 17, 2012 at 7:09 pm •  Published: December 17, 2012
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"We went harder because we missed on November," Mark Reuss, GM's North American president, said last week as he unveiled new trucks that will hit showrooms late next spring. "The incentive loads are competitive, so we're off to a good start," said Reuss, who wouldn't reveal by how much GM had reduced its truck inventory.

GM plans to temporarily close its truck plants in the coming months to help deal with inventory problems and to switch over to new models. It also added at least a week of down time at car factories in Lordstown, Ohio, and Kansas City, Kansas, for maintenance and to control supplies. The Ohio plant makes the Chevy Cruze compact, while the Kansas factory makes the Chevy Malibu midsize car.

Through the year, the Ram has led the way in deals most months, followed by the GM trucks, according to J.D. Power. Ford has been below the other two most of the year.

The Ram has led the way because Chrysler traditionally has offered big discounts and buyers expect them, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area firm that tracks auto sales trends. GM has been in the middle, and Ford has been able to keep discounts down due to the popularity of its turbocharged six-cylinder "Ecoboost" engine that can tow loads yet still gets decent gas mileage, Schuster said. Although most pickups sold in the past have had more powerful eight-cylinder engines, half of Ford's sales this year have been equipped with V-6s.

At Serra Chevrolet in Southfield, Mich., north of Detroit, truck sales have been strong all year, but December is shaping up to be a great month because of the incentives, said Greg Brown, general manager. "I'm selling every one I get," he said. "I think the incentives are phenomenal on them. It's driving traffic in here."

And GM promises to remain competitive with discounts for the foreseeable future, said Don Johnson, head of Chevrolet sales. "We want to make sure we get our unfair or fair share," he said. But he added that the company won't go into "liquidation mode" to sell trucks.

Schuster said GM made too many trucks for the market and then decided to cut discounts at a bad time.

He said it's a great time to buy, but the deals may not last long, especially as GM gets closer to selling its revamped trucks. The housing industry is coming back, and that always increases truck sales. And the average age of pickup trucks on the roads approaching 11 years, so companies and individual buyers are replacing them, Schuster said. That means there will be demand that could cut into supply and increase prices, he said.

"You have everyone trying to finish the year strongly," he said. "As we then look into next year, we're likely to see higher prices, certainly on the new trucks."