GMT900: So Far, So Good - Selling Near Sticker

[Perian]

Link: http://www.autonews.com/apps/pbcs.dl...3/newsletter12

DETROIT -- Initial indicators show that General Motors' high-stakes gamble to pull forward the launch of its new full-sized SUVs amid unstable gasoline prices might pay off.

January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price.

GM executives have acknowledged that the high-margin SUVs are critical to GM's financial success this year.

Dealers sold 3,000 new 2007 model Tahoes in January, says Paul Ballew, GM's executive director of global market and industry analysis. That's twice as many as GM had hoped for, he says.

GM shipped Tahoes to dealers in mid-January. It started building and shipping Yukons in the second half of January, so sales were minimal at about 200 Yukons for January, Ballew says. GM has shipped only 400 new Escalades, he adds.

"We've exceeded the sales estimate for the month," Ballew says. "We turned the production at a very healthy pace."

Dealers say the public reception of the vehicles has been positive.

"It's going to be a hot seller," says Frank Debartolo, general sales manager of Bredemann Chevrolet in Park Ridge, Ill. "People with older units will want this. Once we get more product on the ground, it'll start selling well."

Debartolo says he got three Tahoes on Jan. 27 and sold two the next day with a slight discount. He has two factory orders for customers who wanted specific vehicle features and has ordered 10 more.

Multistore dealer Mike Bowsher has ordered 250 Yukons and 60 to 70 Tahoes. Bowsher owns a Chevrolet store in Nashville, Tenn., and several Pontiac-Buick-GMC stores in Georgia and Florida.

"We won't see sales volume until we get plenty of product on the ground," says Bowsher, co-chairman of the Pontiac-GMC national dealer council. "Once I get this lot filled up, we'll do some serious volume."

GM is offering no incentives on the new SUVs, dealers say. It has cut prices on the new SUVs and has added features, while trying to minimize rebates.

Bowsher says consumers will pay close to sticker price.

"I had one new Yukon come in, and I sold it in one hour for full sticker," he says.

The Yukon starts at $34,690, $3,290 less than the 2006 model. The Tahoe starts at $33,990, about $2,000 less than its predecessor. The 2007 Escalade starts at $57,280, the same as the prior model. All prices include shipping.

Built in Texas
Tahoes, Yukons and Escalades are built at GM's Arlington, Texas, plant. Many Texas dealers got the first wave of shipments, says Scott Brasher, general manager of Brasher Motor Company in Weimar, Texas. He says he got eight new Tahoes on Jan. 6 and has sold two of them. He expects sales to improve once he gets a broader selection.

But Brasher says some buyers have gotten accustomed to rebates.

"The ride is much better, and people are impressed with the gas mileage," he says. "What customers are having a hard time getting used to is 'Where's my $8,000 rebate off the sticker?' "

Article continues at link.

[moman]

"January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price."



That's the telling point of the article. The Tahoe isn't a dud, but it's not going to be the hot potato GM thinks it will. If it was, they would be selling at or OVER sticker price. Even the dealer said he had a slight concession.

This is pure marketing hyperbole where nervous dealers are trying to drive sales of the Tahoe to weary consumers.

[Perian]

Originally Posted by moman

"January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price."



That's the telling point of the article. The Tahoe isn't a dud, but it's not going to be the hot potato GM thinks it will. If it was, they would be selling at or OVER sticker price. Even the dealer said he had a slight concession.

This is pure marketing hyperbole where nervous dealers are trying to drive sales of the Tahoe to weary consumers.

While you make a vaild point, inclusive of rebates, the 05 and 06 leftover Tahoe's are selling $9 to $15 below the new 07 units.

I don't care how good the new one is, that's a lot of money to justify the purchase of the new 900 over the old 800!

[moman]

Originally Posted by Perian

While you make a vaild point, inclusive of rebates, the 05 and 06 leftover Tahoe's are selling $9 to $15 below the new 07 units.

I don't care how good the new one is, that's a lot of money to justify the purchase of the new 900 over the old 800!

Correct but that shows the market correction that took place in the SUV market. People gladly paid $10k more for the 00 over the 99 Tahoe. Tahoes sold for sticker + for a good two years.

What a difference a couple years makes...

[GapingOrifice]

The GMT 900 is also a high volume "bread & butter" vehicle, so it's not like there's a supply issue, so dealers can't mark them up like they can a solstice. I am still doubtful over the push up date for the GMT 900 (at the expense of say, Malibu 2011 update instead of 08), and still don't think it's going to be the super big hit GM expected, but I do believe market share will increase in a stagnant but still very profitable segment.

[mbukukanyau]

Originally Posted by moman

"January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price."



That's the telling point of the article. The Tahoe isn't a dud, but it's not going to be the hot potato GM thinks it will. If it was, they would be selling at or OVER sticker price. Even the dealer said he had a slight concession.

This is pure marketing hyperbole where nervous dealers are trying to drive sales of the Tahoe to weary consumers.

What is the basis of your contention?

[Sgt Beavis]

Originally Posted by moman

"January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price."



That's the telling point of the article. The Tahoe isn't a dud, but it's not going to be the hot potato GM thinks it will. If it was, they would be selling at or OVER sticker price. Even the dealer said he had a slight concession.

This is pure marketing hyperbole where nervous dealers are trying to drive sales of the Tahoe to weary consumers.

Valid point. However, GM is only building it in one plant (Arlington) rather than the 3 it used to be built in. (Silao, Mexico, Janesville, Wis, and the Arlington plant) It seems that if they have reduced capacity to one plant (there best one at that) then they have anticipated that the GMT900's will not sell nearly as well as they did at their height.

[moman]

Originally Posted by mbukukanyau

What is the basis of your contention?

If you were a dealer, would you be quoted in the media saying the Tahoe is off to a slow start?

[roteague]

Still waiting to actually see on in person. Drove by the local Chevy dealer yesterday, still none on the lot.

[Perian]

Originally Posted by Sgt Beavis

Valid point. However, GM is only building it in one plant (Arlington) rather than the 3 it used to be built in. (Silao, Mexico, Janesville, Wis, and the Arlington plant) It seems that if they have reduced capacity to one plant (there best one at that) then they have anticipated that the GMT900's will not sell nearly as well as they did at their height.

I have read quite a few posts like this.

GM has NOT reduced SUV capacity. All three plants will be producing soon.

[asim]

Originally Posted by Perian

"I had one new Yukon come in, and I sold it in one hour for full sticker," he says.

How do people make such a major purchase that quick?!

[asim]

Originally Posted by Perian

While you make a vaild point, inclusive of rebates, the 05 and 06 leftover Tahoe's are selling $9 to $15 below the new 07 units.

I don't care how good the new one is, that's a lot of money to justify the purchase of the new 900 over the old 800!

The thing is around here it's hard to find a "pretty basic" 2005 Tahoe. Most of them are more expensives examples, even the cheapest ones MSRP for around $40k. With around $8k in rebates the price is around $32k. I rather but a bare bones 2007 for $34k (with supplier discount for $32k). You may not get some of the options that are on the 2005, (like locking rear differential, redundant radio controls, bucket seats, bose speakers, wheel flares, and XM), but I'd sacrifice those options for the newer model.

[MutoidMan]

I finally got the chance to check out the new '07 Tahoe at my local dealership over the weekend. All the dealership had was one black Tahoe, and it was sitting on the showroom floor.

Man, the pictures just don't do the new Tahoe justice. The truck is absolutely beautiful. In addition to being blown away by how great the exterior of the truck looks, I was impressed by how much bigger it looks. It really looks beefier and tougher, but with a sleek, streamlined, perhaps American art deco quality. The new Tahoe has unpretentious class and is simply impressive from every angle.

The interior was no less impressive. It easily trumps the previous generation's Escalade interior, never mind the previous Tahoe interior.

I really think that everyone who thinks the Tahoe isn't tough-looking either hasn't seen it in person or just don't know their asses from a hole in the ground.

Based on what I saw I would've ordered one right there if I could've, no question.

This new truck is the goods, and I wish GM much success with it.

[mobyss]

Originally Posted by moman

Correct but that shows the market correction that took place in the SUV market. People gladly paid $10k more for the 00 over the 99 Tahoe. Tahoes sold for sticker + for a good two years.

What a difference a couple years makes...

You're right - the 2000 Suburbans sold like hotcakes for sticker or $1000 to $2000 over for loaded ones - I worked at a dealer across the street from a Chevy dealer at the time. Of course gas was $1.09, so people didn't even consider mpg.

Already the 2007 Tahoes are building up on dealer lots - there aren't crowds of buyers waiting for them to unload the car-carriers late at night. I walked through a lot a week ago and there were 13 2007 Tahoes, and about 30 2006s.

Selling "close to MSRP" after one month? What if the Solstice was already selling for slightly under MSRP? Or the Corvette? GM would be worried - and they should be worried about this too.

[ZZ71]

I saw a new Yukon on Feb 1. I was at the dealer have the u-joints replaced on my 92 Chevy plow truck and saw it sitting in the service bay, came in overnight. They backed it out to put my truck in. It was Sport Red (carry over color) and was really nice. Sticker was 48g I was told, nothing on the window had prices. Someone was looking and it and it was sold before I left. I guess the person was waiting for it to come in to see and then jumped on it. This dealer never marks anything up. They have another full line dealer 5 miles away and they are always trying to out sell. Small town area.

If the trucks look as good as the Yukon, I will buy one in 2008 but not the first year model. I got a 1988 and had problems, got a 1999 and had problems.