General Motors Incentives Skyrocket In November; GM Inventory Still Ballooning

General Motors moved to increase the average incentive spend per Buick, Cadillac, Chevrolet, and GMC vehicle by 36 percent in November in order to clear out an inventory glut that seemingly refuses to be cleared out.

According to Autodata, General Motors now has more than 873,000 vehicles in stock, nearly three months of supply. That’s 26 percent more inventory than at this stage of 2015, when industry-wide volume was pacing at roughly the same level as today, albeit with significantly less incentivization.

J.D. Power PIN data shows that General Motors spent $4,912 per vehicle sale in November 2016, a $1,302 increase compared with November 2015. According to TrueCar, industry-wide incentive spending rose 13 percent, year-over-year, a figure skewed by the dramatic increase at America’s biggest holder of market share.

Besides the striking incentive increase, GM once again resorted to fleet volume in order to generate overall sales momentum. After decreasing fleet emphasis throughout the year, GM’s fleet sales jumped 19 percent in November 2016, an 8,880-unit increase compared with November 2015 that drew fleet sales up to 22 percent of GM’s overall mix. (Year-to-date, 19 percent of U.S. GM sales are fleet-derived.)

Prior to November, GM had not reported a year-over-year fleet sales increase since last year.Buick.com screenshot - Image: Buick.comNowhere was GM’s push to produce greater volume more evident than with the company’s full-size pickup trucks. The Chevrolet Silverado and GMC Sierra generate more than one-quarter of GM’s U.S. volume. In order to keep pace with a full-size pickup truck market that grew 9 percent in November, GM spent an average of $5,753 to move each Silverado and Sierra, a 46-percent increase compared with the same period one year ago.

Ram spent $6,062 per truck sale, a 19-percent increase. Ford’s F-Series was incentivized to the tune of $4,467.

Ford reported 72,089 total F-Series sales in November 2016, a 10-percent uptick. Combined, the Silverado and Sierra trailed the F-Series by nearly 8,000 sales. 2015 was the first year since 2009 in which the GM twins combined to outsell the F-Series. But even with audacious discounts, the GM twins by 14,293 sales heading into December. (GM also sold 132,695 midsize pickups in the first 11 months of 2016.)

With a market that’s essentially flat and the demand that does exist fueled in no small part by hefty price reductions, GM has nevertheless forged on building vehicles like the market has plenty of room to grow. Fiat Chrysler Automobiles’ inventory is 9 percent lower today than it was a year ago; the Ford Motor Company’s inventory is nearly 2 percent lower.

General Motors outsold the next-best-selling manufacturer, Toyota, by 55,000 units in November. Buick, Cadillac, and GMC all posted double-digit percentage gains. Chevrolet sales grew 8 percent.

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