Jump to content

Gorehamj

GM Signals That Higher Average Transaction Prices Are Here To Stay

Recommended Posts

 

2019 sierra denali gm image.jpg

John Goreham
Contributing Writer, GM-Trucks.com
4-30-2019

We've reported the GM sales and financial results here at GM-Trucks.com in the past quite regularly. One interesting take-away the GM financial results data being offered by the company is the increasing shift from sales unit volume to an emphasis on transaction prices. We find this interesting because there are two very different ways to look at higher transaction prices. They are good for stockholders and bad for truck buyers.

 

Back in early April, GM focused on higher transaction prices, saying that its overall average prices in Q1 had increased by $8,040 higher compared to their outgoing models in the first quarter of 2018. That stunning upward shift in prices was tempered by the fact that GM had only produced limited trims and configurations of the 2019 Silverado and Sierra, while continuing to build the previous-Gen 2018 trucks in the lower cost versions. However, this week GM released the data of its financial performance in Q1. With a bit more time and more 2019 models produced, GM updated its "good news" about transaction prices of its trucks, saying, "The company’s full-size truck launch is ahead of plan and drove strong pricing for the quarter in North America. Average transaction prices for GM’s all-new full-size crew cab pickup trucks are up $5,800 over the outgoing models." We looked up the current inflation rate and found that it is presently at historically-relative lows between 1.5% and 1.9% this past quarter. It does not seem that GM is increasing the cost of its trucks due to higher costs, but rather due to a shift in the trims and configurations it is choosing to produce. 

 

 “We are bullish on pickups and expect to gain sales momentum throughout the year,” said Kurt McNeil, U.S. vice president, Sales Operations. “We are installing capacity in Flint to build more HD pickups in total, more crew cab models, more dualies and diesel models, too, all in response to dealer and customer demand.” It looks like higher truck prices are here to stay, at least for the near term. 

Share this post


Link to post
Share on other sites

Being bullish on pickups will just allow RAM to continue selling more 1500s and stay in the #2 spot.

And of course keep Ford at #1 as always! :shakehead:

  • Like 1

Share this post


Link to post
Share on other sites
Posted (edited)
1 hour ago, Sierra Dan said:

Being bullish on pickups will just allow RAM to continue selling more 1500s and stay in the #2 spot.

And of course keep Ford at #1 as always! :shakehead:

Not so sure about that?  We will see by year end?  GM is now completing it's ramp for 1500's.  Lipstick on a PIG only goes so far......

Edited by mookdoc6

Share this post


Link to post
Share on other sites
Posted (edited)

What does being number one in sales really mean in the long run anyways?

Or number two or three for that matter?

I could really care less who sells the most trucks. It does not matter to me one bit. 

I've been running Chevy trucks since 1980. Most of them I bought brand new. ( I currently own two 2018 Silverados , number 15 and 16).

I highly doubt I'll ever own a Ford or Dodge. Just because they may sell more trucks sure don't make me want to run out and buy one. 

A lot of guys are getting all butthurt because Dodge just passed GM in truck sales. I'm not. I could care less. We alll know they are an inferior truck with reliability issues. And Ford,as far as I know,  they count all the trucks they sell F 150 thru F 650 as truck sales to inflate the numbers. GM only counts 1500, 2500, and 3500 pickups and 3500 chassis cabs. The new Silverado 4500 ,5500, 6500 may put a dent in the competitions truck sales but we will have to wait and see. I haven't even seen one in person on the road yet.

Bad news is trucks cost more than ever now and that's not going to change.

Edited by dieselfan1

Share this post


Link to post
Share on other sites
4 hours ago, Sierra Dan said:

Being bullish on pickups will just allow RAM to continue selling more 1500s and stay in the #2 spot.

And of course keep Ford at #1 as always! :shakehead:

I hope they do.  GM needs a big big humbling lesson if they want to survive. 

  • Like 4

Share this post


Link to post
Share on other sites

GM wants to wein consumers off of the customary 10-13 k off msrp . They are bullish and confident their trucks are worthy of paying more . Big question is will consumers ''buy it''. How much more do consumers figure GM truck is worth imo.

Share this post


Link to post
Share on other sites
On 4/30/2019 at 3:01 PM, dieselfan1 said:

What does being number one in sales really mean in the long run anyways?

Or number two or three for that matter?

I could really care less who sells the most trucks. It does not matter to me one bit.

I completely agree with you but if customers are not finding their trucks appealing and moving in to brands offering a better bang for the buck it will cost start costing them. It's not so much sales numbers as it is danger of their product losing appeal.

Share this post


Link to post
Share on other sites

And I would like to let GM know that "My Money Will Continue To Stay In My Wallet!" 

  • Thanks 1

Share this post


Link to post
Share on other sites

Im not sure its wise to advertise that tactic. To me its basically stating their sales strategy is to offer a less competitive truck at higher prices because your loyal buyers will keep buying.

 

Am I missing something?

Share this post


Link to post
Share on other sites
On 4/30/2019 at 4:01 PM, dieselfan1 said:

 

 

A lot of guys are getting all butthurt because Dodge just passed GM in truck sales. I'm not. I could care less. We alll know they are an inferior truck with reliability issues.

Go back before 1994 Ram re-invention and Dodge...I mean Ram, had almost no truck market left. No one wanted their outdated stuff. Since then, they have come back to life and are dominating on a train that just keeps picking up speed, passing up GM in truck sales. Calling them inferior while getting your butt handed to you in sales is the definition of insanity.

Share this post


Link to post
Share on other sites
8 hours ago, O_J_Simpson said:

Go back before 1994 Ram re-invention and Dodge...I mean Ram, had almost no truck market left. No one wanted their outdated stuff. Since then, they have come back to life and are dominating on a train that just keeps picking up speed, passing up GM in truck sales. Calling them inferior while getting your butt handed to you in sales is the definition of insanity.

They haven't passed GM in sales, they only outsold the Silverado. Sierra+Silverado sales are way ahead of Ram.

  • Like 1

Share this post


Link to post
Share on other sites

The problem with GM's thinking is that they need to convince their buyers that the higher price in some form nets them a better truck. This could be because of features, reliability or both.

 

GM at the moment doesn't have a lineup that could convince me as a truck buyer that their vehicle is worth the extra money.

 

Reliability? All three manufactures have their issues and lemons but can I definitively say that I will get a longer lasting truck because I bought GM? Nope.

 

Features? The GM twins lack here. Interior wise I don't believe GM is on par with Ford or Ram. The 2019 interior doesn't differentiate itself far enough from the previous generation and doesn't add anything of value.

 

Mechanicals? Want a 6.2? Better get a top trim in order to even have the option. Want a two speed transfer case? Got to add the off road package. 

 

From my perspective GM seems to have locked one feature into specific trim levels or packages forcing people to combine packages for a higher value truck. In the event you can't get all of the packages you want, they are forcing their buyers to compromise.

 

41 minutes ago, HondaHawkGT said:

They haven't passed GM in sales, they only outsold the Silverado. Sierra+Silverado sales are way ahead of Ram.

I wouldn't say way ahead.

 

Ford F-Series 214611 214191 .2%
Ram Truck 120026 103964 15%
Chevrolet Silverado 114313 135545 -15.7%
GMC Sierra 40546 41468 -2.2%

Source 

 

Combined GM sold 154,859 to Rams 120,026, a difference of 34,833 with the GM vehicles trending down.

  • Like 1

Share this post


Link to post
Share on other sites
3 minutes ago, mawint said:

The problem with GM's thinking is that they need to convince their buyers that the higher price in some form nets them a better truck. This could be because of features, reliability or both.

 

GM at the moment doesn't have a lineup that could convince me as a truck buyer that their vehicle is worth the extra money.

 

Reliability? All three manufactures have their issues and lemons but can I definitively say that I will get a longer lasting truck because I bought GM? Nope.

 

Features? The GM twins lack here. Interior wise I don't believe GM is on par with Ford or Ram. The 2019 interior doesn't differentiate itself far enough from the previous generation and doesn't add anything of value.

 

Mechanicals? Want a 6.2? Better get a top trim in order to even have the option. Want a two speed transfer case? Got to add the off road package. 

 

From my perspective GM seems to have locked one feature into specific trim levels or packages forcing people to combine packages for a higher value truck. In the event you can't get all of the packages you want, they are forcing their buyers to compromise.

 

I wouldn't say way ahead.

 

Ford F-Series 214611 214191 .2%
Ram Truck 120026 103964 15%
Chevrolet Silverado 114313 135545 -15.7%
GMC Sierra 40546 41468 -2.2%

Source 

 

Combined GM sold 154,859 to Rams 120,026, a difference of 34,833 with the GM vehicles trending down.

 

That's the smallest gap Ram could manage despite offering 30+% more in incentives in Q1. Every year for the last 5 years, Ram has fallen short of GM by hundreds of thousands of trucks. GM can act like they don't plant on adjusting prices but they will when investors start screaming about falling sales.

Share this post


Link to post
Share on other sites
On 4/30/2019 at 5:27 PM, pickmeup said:

GM wants to wein consumers off of the customary 10-13 k off msrp . They are bullish and confident their trucks are worthy of paying more . Big question is will consumers ''buy it''. How much more do consumers figure GM truck is worth imo.

This kind of hits the mark. I paid $43K for my $54K MSRP RST. I feel there were some key features left out on my truck, which are standard on a similar trim with Ford and RAM. However, I was fine with that because I got $11K off. 

 

Had I paid closer to $50K for the truck, I would really be regretting it now. 

 

So if GM wants to wean customers from the $10-$14K off MSRP, they should build a truck worth paying closer to MSRP. Pretty simple. 

 

Share this post


Link to post
Share on other sites

I'm pretty sure I'm just done. Price increases since I bought my 2015 are...….can't find the right words. Lock me out of my PCM, BCM and TCM? I bough it. I own it. End of story. Got rid of everything I have an interest in buying. RCSB. Full sized FAMILY cars. Eliminating what I want to PUSH me toward higher margins only pushed me to used. The idea that if one thing is all I have to choose from will get me to buy that one thing? Think again. I still have two feet and like walking. Cheaper and  more healthful too. Strong arm me? Get a grip! :fume:

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


  • Similar Content

    • By Gorehamj

      John Goreham
      Contributing Writer, GM-Trucks.com
      7-27-2017
      On the day that the Ford Pickup turns 100 we thought we would ask our members if they think classic trucks are worth their current valuations. Good condition early 1970s Chevy pickup trucks now sell for the same price as a new Chevy pickup truck. Late 1940s and early 1950s pickups sell for even more. Classic vehicle collectors are turning to trucks in increasing numbers.

      Black Book recently analyzed the value of a selection of classic trucks based on their auction sale prices and the results are very interesting. “We love our trucks today because of the versatility, functionality, and even technological features included in many of today’s popular models,” said Eric Lawrence, Director of Specialty Products at Black Book. “These trucks of yesteryear were pioneers of their time when trucks had a different meaning on the roads but still offer the right amount of nostalgia that makes them extremely valuable today.”

      Are these valuations just a bubble, or will classic trucks soon be reaching the six-figures like so many classic cars?













    • By Gorehamj

      John Goreham
      Contributing Writer, GM-Trucks.com
      8/21/2015
      Today Chevrolet released prices of the all-new, made-in-the-U.S.A. (soon) 2016 Camaro. The base Camaro 1LT with no options, which will be a rare sight at any dealership, starts at just $26,695 MSRP. The most powerful Camaro SS ever starts at $37,295. Figure $40K for a well-equipped 1SS. In addition to releasing prices, Chevy has built a "Visualizer" that shoppers can use to dress their Camaro before visiting a dealer. Click here to see that.
       
      Although we mention that stripped base Camaros will be unusual inventory items, Chevy has significantly upped the standard 1LT content and it will have a lower base price according to Todd Christensen, Camaro marketing manager, who said, “We expect it will be even more popular as the 2016 Camaro 1LT is priced less than the 2015 model and offers significantly more standard features and technologies.” Here is a list that Chevy says was either optional or not available on base Camaros in the past:
      Chevrolet MyLink with Apple CarPlay capability OnStar 4G LTE connectivity with Wi-Fi hotspot Driver Mode Selector with Snow/Ice, Tour and Sport modes on all models and Track mode on SS Remote vehicle starter system (with an automatic transmission) Driver information center with color display Keyless access with push-button start Rear vision camera Automatic climate control Leather-wrapped flat-bottom steering wheel LED daytime running lamps Capless fuel filler Variable-ratio electric power steering 8-way power driver, 6-way power passenger seats Electronic park brake Driver and front passenger knee air bags The New Camaro RS package adds RS-specific grille inserts, a rear spoiler, 20-inch aluminum wheels, High Intensity Discharge (HID) headlamps with LED signature lamps, and LED taillamps
       
      The 1SS Camaro gets all the goodies found in the 1LT and RS plus this content:
      Cooling systems for the differential, transmission and engine oil Brembo brakes with four-piston front and rear calipers Goodyear Eagle F1 Asymmetric 3 run-flat tires. Active Rev Matching (manual transmission models only) Limited slip differential (manual transmission models only) Configurable Driver Information Center Chevy's 2SS adds all the luxury goodies such as:
      - Leather heated and ventilated front seats
      - Wireless phone charging
      - Interior spectrum lighting
      - Heated steering wheel
      - Head-up display
      - Bose premium audio
      - Rear Cross-Traffic Alert, and Side Blind Zone Alert with Lane Change Alert
       
      Christensen expects two-thirds of Camaro buyers will go all-in and get the fully-loaded 2SS. The only other options not included on the 2SS buyers may add are magnetic ride control, the eight-speed auto transmission, in-dash Navi, dual-mode exhaust and a power sunroof.







    • By Gorehamj

      Although we mention that stripped base Camaros will be unusual inventory items, Chevy has significantly upped the standard 1LT content and it will have a lower base price according to Todd Christensen, Camaro marketing manager, who said, “We expect it will be even more popular as the 2016 Camaro 1LT is priced less than the 2015 model and offers significantly more standard features and technologies.” Here is a list that Chevy says was either optional or not available on base Camaros in the past:
      Chevrolet MyLink with Apple CarPlay capability OnStar 4G LTE connectivity with Wi-Fi hotspot Driver Mode Selector with Snow/Ice, Tour and Sport modes on all models and Track mode on SS Remote vehicle starter system (with an automatic transmission) Driver information center with color display Keyless access with push-button start Rear vision camera Automatic climate control Leather-wrapped flat-bottom steering wheel LED daytime running lamps Capless fuel filler Variable-ratio electric power steering 8-way power driver, 6-way power passenger seats Electronic park brake Driver and front passenger knee air bags

      The New Camaro RS package adds RS-specific grille inserts, a rear spoiler, 20-inch aluminum wheels, High Intensity Discharge (HID) headlamps with LED signature lamps, and LED taillamps

      The 1SS Camaro gets all the goodies found in the 1LT and RS plus this content:
      Cooling systems for the differential, transmission and engine oil Brembo brakes with four-piston front and rear calipers Goodyear Eagle F1 Asymmetric 3 run-flat tires. Active Rev Matching (manual transmission models only) Limited slip differential (manual transmission models only) Configurable Driver Information Center

      Chevy's 2SS adds all the luxury goodies such as:
      - Leather heated and ventilated front seats
      - Wireless phone charging
      - Interior spectrum lighting
      - Heated steering wheel
      - Head-up display
      - Bose premium audio
      - Rear Cross-Traffic Alert, and Side Blind Zone Alert with Lane Change Alert

      Christensen expects that fully two-thirds of Camaro buyers will go all-in and get the fully-loaded 2SS. The only other options not included on the 2SS many may add are magnetic ride control, the eight-speed auto transmission, in-dash Navi, and dual-mode exhaust and a power sunroof.
       
       
    • By Gorehamj

      John Goreham
      Contributing Writer, GM-Trucks.com
      5/04/2015
      This news story will come danger-close to an opinion piece, but we will try to stick the facts. Here is a fact: According to KBB, new vehicle prices are rising. However, not all segments are costing more. Truck prices are rising the most sharply. KBB says that new full-size truck prices are up 4.5% since this time last year. Mid-size trucks are up 3.5%. That means that if your buy-price for a new truck is $40K, you are paying $1,800 more for your new truck this year than buyers did last year. It is easy to shrug off that increase as being due to inflation. However, inflation is nowhere near that level right now. In fact, it is at -0.1%. That's right, things in general cost less this year than last. So why are you paying more for your truck?
       
      Meet the 2016 Chevy Volt. Sales have been in a tailspin for the past year. That is a big problem for GM. California and other states now mandate zero emissions vehicles and the Volt is GM's main way of dealing with that. Sales must increase. The new Volt is better in every measurable way. It will have better fuel economy, a longer range, more perky performance, is safer, and it even grew a seat! It is now a 5-passenger vehicle rather than 4. Amazingly, the price has dropped. New Volts cost $1,200 less than outgoing Volts. Surely that is due to breakthroughs in technology. The truck folks couldn't be subsidizing the Volt owners, right?
       
      The Volt also provides its owner with a $7,500 federal income tax rebate (assuming they have taxes to pay to be rebated). Even better, state revenues also go to Volt buyers in the form of instant rebates. In many states that rebate is up to $1,500.
       
      Stop and imagine what your latest truck would have cost you if instead of a price increase of $1,800, it went down by $1,200 and then you got a check back for $9,000 from your governments. What would you do with the approximately $12,000?



  • Recently Browsing   0 members

    No registered users viewing this page.

  • Forum Statistics

    208,491
    Total Topics
    2,232,845
    Total Posts
  • Member Statistics

    177,945
    Total Members
    8,960
    Most Online
    Pushtruck23
    Newest Member
    Pushtruck23
    Joined
  • Who's Online   36 Members, 0 Anonymous, 228 Guests (See full list)

×

Important Information

By using this site, you agree to our Terms of Use.