DETROIT -- General Motors boosted incentives on its pickup models this month after its biggest foes gained ground, intensifying a price war within the U.S. auto market’s most hotly contested segment.
Discounts averaged about $6,996 for the Chevrolet Silverado and $5,315 for the GMC Sierra this month through Feb. 12, according to J.D. Power dealer data obtained by Bloomberg News. Incentives on GM’s models surged 56 percent and 82 percent, respectively, from a year earlier as Fiat Chrysler Automobiles and Ford Motor Co. dialed back their spending, according to the researcher.
The pickup segment is among the most profitable within the global automotive industry, giving carmakers room to offer deals and motivation to make market-share grabs. At the same time, fierce brand loyalty among truck owners means that automakers have to offer bigger deals to entice them to switch models. The rise in incentive activity also reflects the U.S. auto market slowing down following a seven-year streak of expansion.
“It’s taking a lot more incentives now to move the metal than it did last year or certainly the year before,” said Michelle Krebs, senior analyst with car-shopping website Autotrader.com. “Things are slowing.”
GM is spending 26 percent more in discounts on each Silverado truck than Fiat Chrysler does for its Ram and 85 percent more than Ford does on its on F series, according to the Power Information Network data, which J.D. Power doesn’t release to the public.
The deals from GM are part of a “Truck Month” promotion that includes offers for about 25 percent off the sticker price of some 2016 Sierra pickups or $11,185 discounts for select 2017 Silverado models. The offers follow sales declines in January for both of GM’s full-size truck models while Ford and Fiat Chrysler’s pickups gained.
“Last month, GM’s pickup sales were down,” Frank Ursomarso, owner of Union Park GMC in Delaware, said in a phone interview. “That’s why they’re doing this. GM has to battle against Ram and Ford.”