Editor's note: Silverado U.S. sales have remained ahead of Ram this year. An earlier version of this story misstated that comparison.
DETROIT -- General Motors, which has seen its U.S. market share fall faster than any other automaker through the first five months of the year, is hitting back with multiple June promotions and marketing plays for its core Chevrolet brand.
In a message sent to Chevy dealers Wednesday, Chevy U.S. chief Brian Sweeney acknowledged that May “did not deliver the result we planned for.” GM’s 18 percent slide, which it blamed on a planned pullback in rental sales and lost production stemming from the April earthquake in Japan, knocked its May market share to within half a point of rival Ford, and cut into retail share for GM and the Chevy brand.
“Now, it’s time to close out the second quarter and defend our position as the fastest growing full-line brand of 2016,” Sweeney wrote in an email to dealers Wednesday.
Chevy is running a Truck Month promotion that will feature “our strongest offer yet” on the Silverado light-duty crew cab, Sweeney’s note said. GM will offer 0 percent financing for 60 months plus up to $8,250 in cash and other rebates on some crew-cab models, according to a slide presentation detailing the June promotions sent to dealers on Wednesday. Crew-cab variations of the Silverado start at $36,840, including shipping.
Silverado sales growth has lagged behind Ford’s F series and Fiat Chrysler's Ram so far this year, reversing gains Chevy made in 2015, when the Silverado notched its biggest market-share increase in more than a decade. The Silverado’s share of the all-important full-size pickup market fell to 21.3 percent this year through May, from 22.5 percent. Both Ford and Ram gained.
Still, GM continues to command strong pricing for both the Silverado and its twin, the GMC Sierra. Both pickups hit new records for average transaction prices in May and dealer inventories have been held below those of their rivals, GM noted in its sales release Wednesday.
GM said its full-size pickup incentives through May were below those of rivals, without citing figures. J.D. Power data show that GM’s incentive spending in May equaled 9.5 percent of the average transaction price of the Silverado and Sierra, vs. 10 percent for Ford and 12.7 percent for Ram.
GM’s overall incentive spending was tame in May relative to the competition, according to figures from Autodata Corp. and J.D. Power. GM increased incentive spending by 7.7 percent vs. a year earlier, compared with the industry’s 10.9 percent average increase, according to Autodata. GM said its incentive spending as a percentage of its average transaction price was 9.8 percent in May, below the industry average of 10.6 percent, citing J.D. Power research.
Strategic moves
In a statement, GM spokesman Jim Cain noted that competitors have been outspending GM on discounts recently and that the June promotions are strategic.
“We can execute our June plan, get dealers and customers excited, and keep our operating discipline intact,” he said. “Very few of our competitors can say the same.”
GM has touted its retail market-share gains over the past year even as its overall share sagged because of the planned reduction in rental sales, aimed at enhancing residual values by stemming the flow of cheap rental cars returning to the market.
But May snapped a string of 12 straight months of retail sales growth, GM said. It said a production disruption from an earthquake in Japan in April hurt the supply of the Cruze and other vehicles.
Chevrolet’s market share fell to 11 percent in May, down 1.7 percentage points from a year earlier, putting it at No. 3, behind Ford and Toyota. It also slipped behind Toyota for the year through May at 11.6 percent, vs. Toyota’s 11.8 percent.
GM’s market share for May was 15.7 percent, just ahead of Ford at 15.3 percent. That’s GM’s lowest mark in any given month since at least 1990, the earliest monthly figures kept by the Automotive News Data Center. Before that, GM’s annual market share ranged between 30 percent and 50 percent stretching back to the 1950s.
Short-term hits
In an interview with Automotive News last month, GM North America chief Alan Batey said GM was committed to its strategy of cutting back sales to daily rental fleets, even if it meant short-term hits to overall market share. He said those cutbacks will moderate through the year.
Among the other promotions Chevy is rolling out for June:
- Through June 15, Chevy will offer 20 percent off the sticker price on high-end models of the 2016 Chevy Impala large sedan, Sonic subcompact and Spark minicar. For example, a top-trim-level LTZ Impala will be advertised for $8,025 cash back, according to the slide presentation.
- $750 cash for owners of non-GM vehicles, also through June 15, “to drive conquest traffic and take share from the competition,” the document says.
- “Unprecedented support” for the redesigned Chevy Cruze and Malibu sedans, including an extra $500 in cash that can be combined with the conquest promotion. Chevy also will accelerate its advertising blitz behind its two highest-volume cars, both of which were redesigned for ’16.
