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Truck buyers could be in for quite a holiday gift from General Motors this year. The maker is offering incentives of as much as $9,000 on some of its full-size pickups this month, hoping to clear out a massive backlog of Chevrolet Silverados and GMC Sierras on dealer lots.
?We have the oldest trucks out there,? which means they need the biggest givebacks to remain competitive, conceded Mark Reuss, president of GM?s North American operations.
But GM isn?t alone. Ford, Chrysler, Nissan and Toyota have all ramped up givebacks on their pickups in recent months ? and the deals are made even sweeter when you consider today?s near record-low finance rates.
The heavy discounting might not seem much of a surprise considering what has happened in the truck market over the last half decade. But, in fact, after taking a big hit during the recession, sales of full-size pickups have actually been growing fast this past year ? and there?s even been a ?bump? in demand since Superstorm Sandy devastated the East Coast, said analyst Jim Hall, of 2953 Analytics, in Detroit.
That?s been great news for Ford, which will end 2012 with its big F-Series once again the best-selling vehicle in the U.S., and Chrysler?s Ram brand is scoring well with the 2013 remake of its full-size 1500 pickup.?
General Motors also hopes for a rebound when it launches all-new versions of the Chevy Silverado and GMC Sierra around the middle of 2013.
?There is nothing more core to our business than trucks,? noted Reuss, during a well-attended preview of the two trucks at a movie soundstage in the Detroit suburbs. ?And we think we?re timing this very well.?
Since Henry Ford bolted a bed onto the back of a Model T a century ago, pickups have been a major factor in the American automotive market.? During their peak, a decade back, they accounted for as much as 17 percent of overall U.S. new vehicle sales, or 2.46 million during the record year of 2004.
But demand began to collapse even before the nation fell into a recession and dipped to just 1.5 million for 2011.? Part of the problem was that trucks had lost their cool at a time when the hippest buyers were likely to look at a fuel-sipping Prius rather than a gas-guzzling pickup.
?The recreational pickup market is now pretty minor,? and not likely to bounce back, according to analyst Hall.?
But the commercial market is another matter entirely.? As the economy has slowly recovered, so has demand for trucks.? There has traditionally been a close link between the housing industry and demand for pickups, noted GM?s Reuss.? And the latest numbers for housing starts, he said, suggests that sales will likely get even stronger in the months ahead.
Dealers are already reporting a surge in sales along the East Coast, in part due to the need to replace vehicles destroyed by Superstorm Sandy. And ?contractors who might have needed one truck before may now need two to take on all the added work? repairing the damage wrought by the storm.
For the industry, that?s the good news.? ?The market is getting stronger,? beamed Reuss during the Silverado and Sierra preview, but ?it is very, very competitive.?
GM clearly had to increase incentives to cut back on a 140-day dealer supply of the two trucks ? about double the normal industry inventory.? But even Chrysler, which has seen strong demand for its new Ram 1500, has been forking over rebates and other incentives adding up to about $4,700 per truck in recent months.
?Everyone?s been discounting,? said?analyst Hall.? ?Trucks are always going to have some discount on them considering the market is so competitive.?
In an unusual twist, Asian makers are adding to that pressure. Despite bold pronouncements, Toyota and Nissan have largely failed to make inroads with their Tundra and Titan models, and have had to be even more aggressive just to maintain their own meager shares.
Manufacturers are hoping they can compete with more than just cashback deals, of course.? The new GM pickups have gone through significant redesigns for 2014 that Phillippi calls ?evolutionary? on the outside, while he describes the interior updating as ?huge.?
Gone are the days when driving a truck meant living the hard life.? Those old-fashioned metal or plastic instrument panels have been gilded with leather and aluminum accents.? Even the most basic cloth seats now can be ordered with seat heaters.? And the Silverado and Sierra updates will get many of the high-tech infotainment and safety features more commonly found in up-market sedans or crossovers.?
They even can be ordered with WiFi to easily allow an owner to conduct business on the road ? the center console concealing a cavernous storage area big enough for hanging folders and a large laptop computer.
The pickup truck market is likely never to reach the peaks set in the early years of the new millennium. But even without the urban cowboys that drove it to record levels, sales are clearly rebounding.? Pickups are back up to nearly 12 percent?of the U.S. market and if the housing market continues its own revival trucks will gain another point or two in the coming years, most analysts predict.
The good news is that competition will likely remain intense, forcing makers to continue upgrading their products even while offering hefty incentives.
Source: http://www.nbcnews.com/business/even-economy-america-keeps-truckin-1C7660205
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