GM pickups fetch good prices, seek market share
Jamie LaReau |
Automotive News | 1:00 am, March 5, 2007
DETROIT -- The new Chevrolet Silverado and GMC Sierra are commanding strong prices at dealerships, but it's too soon to tell whether they'll gain market share.
In January, the average purchaser spent $31,799 for a 2007 Silverado and $33,196 for a GMC Sierra.
By contrast, the average transaction price for all pickups was $29,363. Those prices come from the Power Information Network.
But there's no sign so far that the new General Motors pickups will lead owners of Ford, Dodge, Toyota and Nissan pickups to switch brands.
Loyalists are buying
So far the new Silverado and Sierra are selling mostly to loyalists -- men in their mid-40s who previously owned a Silverado or Sierra.
The Power data show that 48 percent of all Silverado purchasers traded a Silverado, up from 33 percent a year earlier. Overall, nearly 76 percent of trade-ins were GM vehicles.
Loyalists typically are first to buy a redesigned pickup, says Tom Libby, Power's senior director of industry analysis. In the months to come, the Silverado and Sierra are likely to attract more Ford and Dodge owners.
Right now dealers are getting lots of pickups equipped with V-8 engines and crew cabs. Those high-priced options appeal to the loyalists, Libby says. GM must offer more basic work-style trucks to win traditional Ford and Dodge pickup owners.
That's because GM's pickup inventory is still undergoing a transition from the old pickup, dubbed the Silverado Classic, to the new version. In the spring, the company will phase out production of the Classic.
When dealers have a full lineup of the new pickup this summer, GM will introduce marketing tools such as low-interest financing and trade-in assistance. Says Mark LaNeve, General Motors' North American marketing chief: "We're not going to do a zero incentive, but we're going to be competitive on the truck."
Although GM executives remain committed to their strategy -- lower sticker prices and fewer incentives -- some feel some anxiety. Both Ford division and Dodge appear willing to pile on incentives to prop up sales.
Ford division has put $3,000 on its 2007-model F-150 trucks. And Dodge is offering as much as $12,000 in factory rebates and dealer cash on a 2007 Dodge Ram.