General Motors Co.’s (NYSE: GM) Chevy has entered the pickup incentive awards in earnest. The three top-selling vehicles in the United States are pickups, led by Ford Motor Co.’s (NYSE: F) F-150 and including Chrysler’s Dodge Ram.
Chevy must believe it has lost ground, or is losing it. The brand has begun to offer incredibly large discount packages to move its Silverado full-sized pickup. Recently advertised for the 2014 1500 Double-Cab All-Star Edition is a $4,500 cash allowance, a $2,912 discount and a $750 option package, totaling $8,162. All this for a truck that sells for only a little above $35,000.
The offer is as desperate as it seems. Silverado sales are off 7.6% this year to 107,757. Sales of the F-150, which always tops the industry, rose 2.7% to 173,358. Most troubling for Chevy, Ram sales were up 24.9% for the first quarter to 96,906. The Ram has moved within striking distance of taking the number two spot.
Full-sized pickups are not only the best-selling products the Big Three have. They are also products for which there is almost no competition from Japanese or German car companies. BWM, Audi and Mercedes do not sell full-sized pickups. Toyota Motor Corp.’s (NYSE: T) Tundra does not sell particularly well, and it is not among the top 20 vehicles in terms of U.S. sales.
Auto industry analysts, and likely company executives, probably have become anxious about whether overall sales can keep pace with the rapid rise of 2012 and 2013, which followed the collapse during the recession. While autos sales in March looked good, the economy may have slowed. Alternatively, many Americans may have already replaced the old vehicles they could not afford to replace during the downturn.
The proliferation of discounts, on pickups and a number of other models, is a sign that sales for the balance of the year will be weak.
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