GM Raises Prices on Chevy/GMC Trucks

[nsap]

Prices, prices and more prices. It's the season for new stickers.

Most of the figures are coming from General Motors. But the Jeep Wrangler, Honda Odyssey and Kia Spectra also made the scene last week.

GM apparently didn't care for its original 2005 Chevrolet and GMC truck prices. So it raised them. Most notable was a $135 increase on 223 of the 225 Chevrolet Silverado and GMC Sierra full-sized pickups. The other two rose $95.

Prices of the smaller Chevrolet Colorado and GMC Canyon pickups climbed $100. Big vans and SUVs rose $50 to $200.

Pontiac higher, too

Pontiacs also moved up the price ladder, with an average September increase of $55. The boosts averaged $79 for Chevrolet and $138 for GMC.

Sales-weighted, the increase amounted to $99 for the full GM complement of cars and light trucks. GM's price boost for the introduction of its 2005 models averages $209, or 0.8 percent.

GM last week also priced its "Oprah car," the new Pontiac G6, and the 2005 minivans that will replace the Pontiac Montana and Oldsmobile Silhouette. Pontiac keeps the Montana name. Buick has chosen Terraza as the name of its entry. The Chevrolet Uplander (nee Venture) was priced earlier.

Pontiac's G6 four-door is $21,300. The fancier G6 GT is $23,925. The Montana SV6 starts at $25,235, which is $1,520 less than the previous Montana. The base Terraza is $28,825, which is $360 more than the base 2004 Silhouette.

All prices in this report include the destination charge.

Joining the Jeep lineup is the Wrangler Unlimited Rubicon. At $28,825, its price is $1,000 more than the Wrangler Rubicon and $4,470 more than the Wrangler Unlimited. The wheelbase of Unlimited models is 10 inches longer than other Wranglers.


Article Here

[mjd1001]

Of course how much does all of this mean in the face of incentives. I just wish GM would stop raising the prices in mid model year like they are doing though and be a little more moderate with the incentvies....but it's all marketing I guess.

[zaxxis]

Originally posted by mjd1001@Sep 27 2004, 11:53 AM
Of course how much does all of this mean in the face of incentives. I just wish GM would stop raising the prices in mid model year like they are doing though and be a little more moderate with the incentvies....but it's all marketing I guess.

Agreed.

Why not lower prices and sell for "most bang for the buck" instead of training people to expect rebates?

People wanting the '05 Mustang are already asking "what are the rebates" and the car isn't offically at dealers lots yet.

GM/Ford MUST get out of rebate games and start selling cars at a lower price!

-Z

[ackenda]

what makes this the most like smoke-and-mirrors marketing is that the rebates grow by a factor of 10 while they're adding $50 here and $23 there. it doesn't seem like the number crunchers responsible for the relatively tiny increases are communicating at all with the rebate folks.

i agree that they'd get better marketing mileage out of being able to say they offer an increasingly better (than the "foreign"--if you can still call it that--competition) product at an affordable price......
of course, something just occured to me: is this the way they're getting low prices while placating union agreements? after all, they need to sell the cars at a lower price, but are forced to have prices that cover union labor costs on paper. then, to incent sales, knock thousands off by moving monies that aren't affected in their business model by the union agreements?

honestly, i don't know what i'm talking about, but i figure there's more to it than "they don't know what they're doing by having higher prices with big rebates." after all, hasn't gm continued to be the most profitable domestic car maker?

[maccars]

Three points to remember:

First - GM's price increase on 05 units from last 04 pricing was 1.8% - GM seems to be trying to roll the price increases more gently than hitting the market with a big 4 or 5% number,

Next - Getting away from rebates will require retraining not only the purchasing public but the industry as well; as you so noted, customers are already looking for the incentives - even before the units hit the ground. The customers have already been trained to expect the incentives,

Finally - I don't think industry marketing types don't really understand what makes the automobile market work. Since 9/11 new car marketing has revolved around providing "super" incentives such as big cash and/or 0% rates; this has devastated the usually secure used car market - then to top that off, they have been really pushing "Certified" used car sales - with most of these vehicles coming from places like Enterprise/Alamo, etc. which further weakens values of retail sold units coming into the the used car market.

Unfortunately, the car market is about to go into a freefall, and nobody seems to realize it. Sadly, there will be no amout of incentives to stop it.

[ackenda]

Unfortunately, the car market is about to go into a freefall, and nobody seems to realize it. Sadly, there will be no amout of incentives to stop it.

why do you think that? (i'm not disagreeing, just genuinely curious)

[paul8488]

Hmmm... could the manufactures at least change the mindset of consumers if they started selling vehicles at MSRP, but added more free options? In the end their profit wouold be negatively affected, just like with incentives... but at least people might get over the idea that they're not getting a good deal without incentives.

For example, lets say they list a G6 for $25,000, and need $1500 in incentives to move it. Instead of cash, perhaps they could offer a panoramic sunroof (for example) as a no-cost upgrade, or whatever equivalent options were attractive, and demand the $25,000 for the car. Would that work? Or perhaps a bundle of options (all power options, leather, uplevel stereo, ABS, traction control, etc). Over time they could try and delete a few of these options, one at a time, to test the waters and see if they can move the cars for asking price. Though of course the asking price has to be reasonable... they might be a bit inflated now to accomodate the incentives. His also has the positive effect of getting more loaded cars out there, which generally make a better impression, I'd assume. You can get a great deal on a base, stripper Colorado, perhaps, but it's not bound to impress too many people.

I dunno... maybe that wouldn't work at all... but it's the only thing I can think of!

[ponchoman49]

Holy smokes there goes GM raising prices again! I mean come on guys the 05's have only been out for a month and some have just been introduced. What the article failed to mention is that some of the cars have gone up too. Impala and Monte Carlo have risen $100.00 along with Lesabre and Century as some examples and these cars have just started arriving about a month ago. So now GM is going to have a monthly price increase time table. This is not the time to be increasing prices but lowering them. Most people are not being fooled by the rebates only to find out the base price has risen a $1000 from last years model. Where is this getting us? The car went up almost a grand and GM is giving us a grand more in rebates. Ludicrous

[ackenda]

i can hear it now:

(late 2005) "the new 2006 impala has just arrived for the bargain price of $43,000. plus, act now and get $20,000 off the sticker price!"

ha!

[MelvinJ]

Originally posted by paul8488@Sep 27 2004, 03:26 PM
Hmmm... could the manufactures at least change the mindset of consumers if they started selling vehicles at MSRP, but added more free options? In the end their profit wouold be negatively affected, just like with incentives... but at least people might get over the idea that they're not getting a good deal without incentives.

For example, lets say they list a G6 for $25,000, and need $1500 in incentives to move it. Instead of cash, perhaps they could offer a panoramic sunroof (for example) as a no-cost upgrade, or whatever equivalent options were attractive, and demand the $25,000 for the car. Would that work? Or perhaps a bundle of options (all power options, leather, uplevel stereo, ABS, traction control, etc). Over time they could try and delete a few of these options, one at a time, to test the waters and see if they can move the cars for asking price. Though of course the asking price has to be reasonable... they might be a bit inflated now to accomodate the incentives. His also has the positive effect of getting more loaded cars out there, which generally make a better impression, I'd assume. You can get a great deal on a base, stripper Colorado, perhaps, but it's not bound to impress too many people.

I dunno... maybe that wouldn't work at all... but it's the only thing I can think of!

That has as good of a shot of working as anything. That's sort of what they are doing with the Cobalt - order early, and you get free stuff. Maybe that's a test bed for this type of pricing.

[maccars]

QUOTE 
Unfortunately, the car market is about to go into a freefall, and nobody seems to realize it. Sadly, there will be no amout of incentives to stop it.



why do you think that? (i'm not disagreeing, just genuinely curious)

New vehicle sales are slumping (August sales alone down 7%), trade-in values are at an all time low, incentive levels now are being increased three times a month, whereas before it was only once a month. Top this off with dealers advertising back of net cost sales prices. It's October, 1929 all over again.

My point is that this can't go on forever.

[dlr]

Here’s the real world situation on why rebates are needed.

Most people keep a car about 3 years. Unfortunately they finance them over 60 months on average. This generally causes them to owe more on the car they want to trade than it is worth. They also usually do not have cash to put down or cover the difference between what they owe and what the value is. The rebate is cash from the factory to cover the negative equity and allow the consumer to buy a new car. Without rebates most people couldn’t get a new car.

[T-Type]

I'm going from memory here, but small price increases throughout the year have been common since the '70s I believe. Sometime back then there was a major price increase at the beginning of the model year. The increase was so big it shocked the public and hurt sales. That where the term 'sticker shock' comes from. The automakers learned from that and now they break up the increase into several small increases throughout the year.

[ackenda]

New vehicle sales are slumping (August sales alone down 7%), trade-in values are at an all time low, incentive levels now are being increased three times a month, whereas before it was only once a month. Top this off with dealers advertising back of net cost sales prices. It's October, 1929 all over again.    My point is that this can't go on forever.

yea...i can see that. thanks.

...plus, the increase in car price over the last couple of decades has been disproportionately higher than people's increase in disposable income for cars and other larger investments.

i think you're right, and there's not much that can fix what's happening unless cars start being made cheaper and more desireable. tough to actually pull off that solution.

[ChevyLaxMan]

If they continue to play the rebate game, Chevy Trucks will lose there claim to having a better resale value than ford or dodge. Just a thought.