GM rolls out deals on new pickups as sales slide

Sales of GM's full-sized pickups fell 8 percent last month. GM said 2014 models accounted for about 60 percent of September volume.
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DETROIT -- General Motors is rolling out fresh incentives on its redesigned 2014 pickups, after demand for the Chevrolet Silverado and GMC Sierra declined in September amid heavy discounts by rivals Ford and Ram.

Sales of GM's full-sized pickups fell 8 percent last month. GM said 2014 models accounted for about 60 percent of September volume.

For October, GM is offering $1,000 in customer cash on the '14 Silverado and an additional $500 on some higher-priced packages, such as the All Star and Texas editions, according to a document sent to dealers.

GM also is offering a new "sales manager bonus program" that will award dealers a $200 bonus for each eligible '14 Silverado sale.

Overall, GM's September sales slid 11 percent on a sharp drop in deliveries to rental-fleet customers and weaker sales at Chevrolet.

Kurt McNeil, GM's vice president of U.S. sales operations, said today that competitors have gotten more aggressive with pickup incentives as they sell off 2013 models.

He said GM has been successful selling its outgoing 2013 models against the discounted rivals, but added that GM is almost out of '13 models.

McNeil confirmed that GM today began offering fresh incentives on the '14 pickups, but he didn't discuss them in detail. He said the move was planned and was not a response to competitive pressure.

"We're going to continue to work our plan and introduce them in the right way," McNeil said.

Sales should improve as dealerships get a better mix of lower-priced, higher-volume models, such as double and regular cabs with V-6 engines and less-expensive trims, McNeil added.

Some GM dealers have said that the '14 trucks have become a tougher sell now that early adopters have already bought one and Ford and Ram continue to dangle big discounts.

"If you didn't have any '13s left, then you were stuck trying to sell the '14s without any incentives," said Courtney Cole, dealer principal at Hare Chevrolet near Indianapolis. "They might be pretty, but not everybody is going to pay full price."

Lower share

The overall decline in September GM sales means that GM's market share -- flat at 18.1 percent for 2013 through August -- will be down through the first nine months of the year. CEO Dan Akerson said in January that he expected GM to gain "modest" U.S. market share this year.

GM sold 187,195 vehicles in September. Retail sales slipped 6 percent from a year earlier, while fleet sales sank 27 percent.

GM blamed the weaker fleet sales on a temporary discontinuation of the Chevrolet Colorado and GMC Canyon pickup; repositioning the Chevy Impala sedan as a retail seller, rather than a fleet staple; and slower sales of the Chevy Cruze compact to rental-car operators.

"We held our own in terms of retail market share," McNeil told analysts and reporters during a conference call.

Chevy down 15%

Chevrolet sales, which accounted for more than two-thirds of GM's overall volume, dropped 15 percent. Chevy was hurt by a 51 percent drop in Cruze sales to 12,730, the lowest level since December 2010, a few months after the car's debut.

The steep drop comes after a strong summer for Cruze sales, which jumped at least 70 percent in both June and July. GM ran a summer-long dealer incentive program on the Cruze that offered cash bonuses of up to $1,000 to dealers who exceeded GM-set sales targets.

In a research note last week, Morgan Stanley analyst Adam Jonas said stronger incentives in August, including dealer stair-step programs, likely sapped September sales for many automakers.

"Strong incentives and promotional activity (rebates and stair step) last month through Labor Day weekend, particularly with the outgoing MY'13s, did pull forward sales significantly," Jonas wrote.

GMC sales fell 10 percent. Cadillac sales rose 10 percent on higher sales of the ATS compact sedan, which was just launched a year earlier. Buick sales rose 7 percent on sales of the Encore small crossover, which was launched in February.

You can reach Mike Colias at mcolias@crain.com.


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