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Friday, September 19, 2014
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Published: Saturday, 10/19/2013 - Updated: 11 months ago

GM boosts prices as pickup truck battle rages

Analysts say increase will help boost sales as dealers strengthen incentive deals

ASSOCIATED PRESS
The Chevrolet Silverado Z71 debuts in Pontiac, Mich. General Motors is adding almost $2,100 to the sticker price of the base 2014 Chevrolet Silverado. The Chevrolet Silverado Z71 debuts in Pontiac, Mich. General Motors is adding almost $2,100 to the sticker price of the base 2014 Chevrolet Silverado.
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DETROIT — General Motors Co.’s recent announcement that it is raising prices on its pickups doesn’t necessarily mean customers will pay more.

GM is adding almost $2,100 to the sticker price of the base 2014 Chevrolet Silverado. That’s 8.5 percent above the price when the truck hit showrooms in the spring. Other versions of the Silverado and the GMC Sierra will see similar percentage increases.

Raising prices sounds like an odd way to boost sales. But industry analysts suspect it’s a marketing ploy. They expect GM to raise incentives starting next month so dealers can advertise big discounts. Customers will feel they’re getting a deal — whether they do or not depends on the size of the discount.

GM’s pickup sales fell 8 percent in September while its two biggest competitors recorded increases. Sales of Ford’s F-Series, the best-selling pickup in the United States, rose 10 percent and Chrysler’s Ram posted an 8 percent increase. The Detroit Three dominate U.S. full-size pickup truck sales with 90 percent of the market. The Toyota Tundra and Nissan Titan make up the rest.

GM didn’t offer the sweet deals Ford Motor Co. and Chrysler Group LLC did last month, said Jesse Toprak, an analyst for the TrueCar.com auto pricing Web site. Raising prices and then adding incentives is common, and truck buyers especially like to get deals, he said.

“This whole change in pricing strategy for trucks at GM is really meant predominantly as a sales-closing tactic for dealerships,” Mr. Toprak said. The increase covers trucks built after Oct. 7, so pickups now on dealer lots won’t be affected.

GM officials also may be counting on a recent change in buying habits: Consumers now pay less attention to the sticker price. Mr. Toprak says most buyers research their cars and trucks online before buying.

Many third-party auto Web sites suggest prices that people should pay that are below the sticker price, he said.

“Savvy customers know how to look beyond this and go to net pricing,” he said.

In May, Nissan Motor Co. took the opposite strategy. The Japanese automaker cut prices and incentives so its cars showed up in Internet searches done by price-sensitive buyers. Nissan sales are up 13 percent since then.

GM spokesman Jim Cain wouldn’t say whether the company would increase discounts when incentives expire Oct. 31.

But he said incentives allow cash-strapped customers to use rebates as down payments.



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