The old shell game

Things like that lets you know GM still has it's head up it's ....

The article seems to indicate consumers aren't bringing any down payment, and the $1500 aids in qualification.

Not sure of the tricks that solely GM is using and the others aren't. If $1500 is a trick, I need to open the dictionary to find out how to properly qualify the $8200 I got off the MSRP on my Ford.

They didn't raise the price by 8200 one day and then a day later give you an 8200 rebate.

Correct, in GM's case it's $1500 or 18% of my Ford discount in total.  Rebates typically change monthly for all manufacturers on most all models.  Not sure this qualifies as inferno fire sale territory, but tossing aside the factual numbers anything is possible in our over dramatization conjecture laden society.

Money talks and having a multi-thousand dollar difference between competitive product and space will certainly tug at consumers.  New models will carry some cache' for some.  Others price is everything.  If GM is getting kicked around on price, it's inevitable they make adjustments, just as the competition does.

GM's going to have to do something.  GM seems be be getting slaughtered from a price point perspective.  As with any newly launched product solid and might command a premium, but not the premium they're asking.  This is also a broader indicator that market and economic metrics are not as rosy as government figures and talking points suggest.

The adjustment this month increasing incentives $1500 and raising the price $1500 was to address down payment qualification, not actual price point or transactional price comparison. I would expect the coming months to add an additional $1000 to $2000 to the current incentives to adjust and balance.

Mike Colias
Automotive News
October 21, 2013 - 12:01 am ET

Read more: http://www.autonews.com/article/20131021/RETAIL07/310219846/pickup-truck-price-gap-riles-gm-dealers#ixzz2iYkZ2mNz
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DETROIT -- General Motors' game plan for the most important vehicle launch since its 2009 bankruptcy amounted to producing a knockout next-generation pickup that would command top dollar.

Critical acclaim for the redesigned 2014 Chevrolet Silverado and GMC Sierra suggests that GM nailed the first part of that strategy. But as the new trucks hit the heart of their launch cycle, the pricing part appears to be running up against cold market realities.

Many Chevy and GMC dealers say sales of the 2014 pickups have been disappointing since the June launch, stymied by stiff price competition from heavily discounted Fords and Rams.

Silverados are "selling very poorly" at Dimmitt Chevrolet in Clearwater, Fla., General Manager Sam Pilato says. The dealership, which typically sells 10 to 25 of the full-sized pickups a month, didn't notch its first Silverado sale this month until Oct. 16.

W. Carroll Smith, president of Monument Chevrolet in Pasadena, Texas, says his supply of Silverado crew cabs hit 170 days, up from the normal 110, amid a dearth of buyers.

"We all know that it's a great truck," Smith says. "But [GM's] position is that the vehicle stands on its own and it doesn't need a bigger rebate. That's not what the market is telling us."

They echo the sentiments of other GM dealers who rave about the '14 truck -- GM's first redesigned full-sized pickup in seven years -- but who complain that meager incentives are keeping buyers at bay. They insist that GM needs better offers to counteract Ford and Ram, which are still selling down their stocks of 2013 models with incentives of as much as $9,000.

The situation underscores the challenge GM faces in achieving CEO Dan Akerson's twin goals of boosting U.S. market share while also lifting North American profit margins to 10 percent, from 7.6 percent last year, which would put it closer to Ford's.

Strong pickup pricing is critical to closing that gap. GM executives want to erase what they have pegged as a $1,000 transaction price differential between their pickups and Ford's. "The expectation is with the newest truck ... we should be able to at least close the gap," Chuck Stevens, CFO of GM North America, said a year ago.

Dealers and analysts say the price disadvantage on the redesigned GM trucks is probably temporary -- Ford's and Ram's incentives could ease once their stocks of '13s are depleted. But some GM dealers worry that the gap is preventing them from capitalizing on the launch buzz.

The price of a popular Silverado model -- a four-wheel-drive crew cab with a 5.3-liter engine in the All Star package -- is $43,005 after factoring in incentives, GM says, while the comparable 2013 F-150 model, a 4wd XLT Super Crew with an EcoBoost engine, is $40,385 after incentives.

Read more http://www.autonews.com/article/20131021/RETAIL07/310219846/pickup-truck-price-gap-riles-gm-dealers#axzz2iYQ4JpCM