Key Dealer says GM Needs to Step up Incentives on Trucks

[Ming]

Key dealer says GM needs to step up incentives
By Kevin Krolicki
Tue Apr 29, 2008 5:42pm

DETROIT (Reuters) - General Motors Corp needs to increase incentives on slow-selling trucks to clear inventory at a time when customers are struggling to trade in rapidly depreciating large vehicles, a major U.S. auto dealer said on Tuesday.

Group 1 Automotive Inc Chief Executive Earl Hesterberg said in an interview his dealership group -- the fourth-largest in the United States by sales volume -- had been forced to curtail truck orders sharply to run down an inventory that shot higher in the past quarter.

He said Group 1's inventory of light trucks ballooned to 89 days supply in the first quarter, up 21 days from a year earlier amid declining sales for trucks and SUVs and rising gas prices.

By contrast, the dealer group's inventory of unsold cars rose just slightly to 57 days, reflecting a build-up from car makers like Toyota Motor where stock had been lean before the first-quarter drop in industry-wide sales, he said.

"The truck situation needs to be rectified," Hesterberg told Reuters. "We need to order less or to see a lot of trucks sell quickly -- and I don't think there is any sign of the market turning."

Hesterberg said Ford Motor Co had become more aggressive than it had been a year ago in offering incentives to support sales of its market-leading F-series pickup trucks.

FULL ARTICLE: http://www.reuters.com/article/ousiv...35320220080429

[Ming]

when customers are struggling to trade in rapidly depreciating large vehicles

So let me get this straight -- GM needs to push its biggest vehicles on people who are struggling to trade in rapildly depreciating big vehicles.

Get 'em in to something new and big that cost's $40K with a couple of grand more in incentives, give 'em only a little for their undesireable trade-ins, and then watch them drive off the lots in their shiny new Depreciations, knowing what that's likely to do to their finances a few years from now. Sounds a little like something else that's been in the news lately....something about subprime mortgages... Well, you can't say Earl Hesterberg doesn't have the best interests of his customers at heart!

We need to order less (big trucks)

At least that makes sense for everyone (except Truckman who wants the lots overflowing with unsold trucks so he can swing a really good deal ).

[Uzzy]

The dealer network is GM's second biggest problem IMO. After the union, of course.

[doh]

I am confused. Isn't the Americain Axle strike hurting supply of trucks?

[TruckMan]

Originally Posted by Ming

At least that makes sense for everyone (except Truckman who wants the lots overflowing with unsold trucks so he can swing a really good deal ).

I never advocated such a thing - though it has crossed my mind once or twice. I'll be in the market again soon - we're expecting twins in October! Should be a great time to pick up a new SUV.

[member12]

GM needs to cut production. The last thing they need is selling trucks to people who can't afford them...and they don't want to hurt their solid resale value in this area.

And GM dealers need push for more of the popular malibu models in exchange for taking more XFE Cobalts, full sized trucks, or Aveos.

If they are going to offer deals, then offer deals on the work truck models (if they must keep the factory running). Moving metal to the private sector is going be slow- and GM must cut Tahoe, Suburban, and Silverado (and the GMC counterparts). Make deals with municipalies, oil services companies, constrution companies, and utility providers on the Trailblazers, Suburbans, and Silverados, but cut the production of trucks to the private buyer.

Also...what kind of fuel economy is the new Duramax getting? That might have something to do with their slow sales in many areas.

[TruckMan]

Originally Posted by member12

Also...what kind of fuel economy is the new Duramax getting? That might have something to do with their slow sales in many areas.

If you're looking at a Duramax and you're worried about gas prices, you don't need a Duramax. That goes with any truck. People that buy trucks and complain about gas prices piss me off. A truck is not intended to get good gas mileage - it's intended to do work (tow, carry loads, etc) efficiently. If you're worried about gas prices, buy something more efficient, not a truck.

[Uzzy]

Originally Posted by member12

GM needs to cut production. The last thing they need is selling trucks to people who can't afford them...and they don't want to hurt their solid resale value in this area.

They are. Productionis down due to the American Axle strike and they just announced over 3000 lay-offs starting in mid-July. Oshawa, among others, will be losing a shift.

Originally Posted by member12

And GM dealers need push for more of the popular malibu models in exchange for taking more XFE Cobalts, full sized trucks, or Aveos.

They don't push those, because they don't make much on them. GM doesn't make much money on them either, though.

Originally Posted by member12

If they are going to offer deals, then offer deals on the work truck models (if they must keep the factory running). Moving metal to the private sector is going be slow- and GM must cut Tahoe, Suburban, and Silverado (and the GMC counterparts). Make deals with municipalies, oil services companies, constrution companies, and utility providers on the Trailblazers, Suburbans, and Silverados, but cut the production of trucks to the private buyer.

From what I've heard the OPP (Ontario Provincial Police) will be switching much of their fleet of patrol vehciles from the outgoing Crown Victorias to Chevy Tahoes. I've seen a few black and white Tahoes already and that paint scheme on those trucks looks badass! Windsor Police has also bought a few Tahoes recently I noticed.

It's not likely they'll push the Trialblazer since it's going out of production.

[Rocket 88]

Originally Posted by Uzzy

From what I've heard the OPP (Ontario Provincial Police) will be switching much of their fleet of patrol vehciles from the outgoing Crown Victorias to Chevy Tahoes. I've seen a few black and white Tahoes already and that paint scheme on those trucks looks badass! Windsor Police has also bought a few Tahoes recently I noticed.

I thought OPP was something else... So everyone was singing about being down with the Ontario Porivincial Police?! I love Canada.

While trucks aren't going away anytime soon, the decrease in demand is reality and incentives aren't going to change that long term. While hardcore work trucks don't get good gas mileage the hybrid system used on the Tahoe would be helful. Maybe smaller trucks will make a comeback for those who can use less truck.

[Hurricane]

Originally Posted by Rocket 88

I thought OPP was something else... So everyone was singing about being down with the Ontario Porivincial Police?! I love Canada.

LOL!

[Uzzy]

Originally Posted by Rocket 88

I thought OPP was something else... So everyone was singing about being down with the Ontario Porivincial Police?! I love Canada.

I still can't figure out why Naughty by Nature is down with the Ontario Provincial Police.

[hawki2]

Has there been any rumors if GM will increase the incentives? ie..additional rebates, 0% for longer periods(72)?

They says more incentives will erode the market, but they still need to sell vehicles.

[smithrob75]

Originally Posted by TruckMan

If you're looking at a Duramax and you're worried about gas prices, you don't need a Duramax. That goes with any truck. People that buy trucks and complain about gas prices piss me off. A truck is not intended to get good gas mileage - it's intended to do work (tow, carry loads, etc) efficiently. If you're worried about gas prices, buy something more efficient, not a truck.

Actually you're more worried about gas mileage than anyone else. My brother's business uses a 2003 3500 flatbed with a 30ft gooseneck. He quoted shipping from Missouri to Near San Antonio @ $800. He was in nearly $650 with just fuel, not counting his time. Needless to say, with diesel at $4.25 or so a gallon that would make a huge difference. As I recall the 1993 Dodge Cummins got around 20 mpg. Surely the Duramax could do better.

[KingElvis]

Originally Posted by TruckMan

If you're looking at a Duramax and you're worried about gas prices, you don't need a Duramax. That goes with any truck. People that buy trucks and complain about gas prices piss me off. A truck is not intended to get good gas mileage - it's intended to do work (tow, carry loads, etc) efficiently. If you're worried about gas prices, buy something more efficient, not a truck.

Look at the truckers who are convoying past the capitol and protesting by holding up traffic. They have trucks and are very worried about fuel prices.

If the truck is used for commercial purposes, gas mileage is a criterion that belongs near the top.

[Ming]

Originally Posted by smithrob75

As I recall the 1993 Dodge Cummins got around 20 mpg. Surely the Duramax could do better.

But that was before the truck (and car) horsepower/torque wars really ramped up. Everyone with a diesel truck needs to tow a mobile home or airplane, after all.

It's just my opinion, but I'm not one who thrills at bragging rights for horsepower or torque in a truck (somehow people managed to get by fine before the HP wars) - I just need something to do a decent job for a truck and get the best miles per gallon that it can -- so I think some GM engines could stand to be reengineered for LESS horsepower and torque (yes, I know sacrilege!) and significantly better fuel economy.

I'd love to see some of GM do Brasil's torquey little 4-cyl. diesels come over, as well as a fuel efficient, but strong pulling 6-cyl. diesel.