Car companies that offer huge discounts on models early in the year have a problem. They have to decide on ways to get slow-selling vehicles off the lots. The Chevy Silverado, General Motors’ (NYSE: GM) most successful vehicle based on unit sales, has such a large number of discounts to its sales price for President’s Day that something has to be very wrong.
The Silverado is the second best selling vehicle in the U.S. after Ford’s (NYSE: F) perennial front-running F-150. The Silverado’s sales are also pressured by another pickup — the Dodge Ram, which is the Chrysler flagship. The three top the list of best selling vehicles in America, ahead of the first place car — Toyota’s (NYSE: TM) Camry.
In January, Ford sold 46.536 F-150s flat compare with a year ago. The pickup’s new model, made mostly of aluminum, which lowers its weight by almost 700 pounds, has earned a number of positive reviews. The Silverado’s sales were 28,926, off more than 18% from January 2013. Pressuring the Silverado from below, the Ram’s sales were 25,071 — up 22%. The Silverado could drop out of second place as soon as this month, if the trends continue.
The stunning set of discounts for the Silverado drops the price of its Double Cab All-Star Edition from $37,520 to $30,428 for President’s Day. This includes a $3,900 Presidents Day Cash Allowance and a $2,442 Presidents Day Discount.
Silverado sales are not the only problem for the No. 1 U.S. auto maker. GM posted relatively poor earnings for the fourth quarter of 2013. Like all of the other large car companies in the U.S., it relies heavily on a small number of vehicles for the majority of its sales. Cars like the Corvette may get substantial press coverage, but they sell only a few thousand units a year.
Based on January sales, Chevy has only three vehicles among the 20 top selling cars and light trucks: the Silverado, Cruze and Equinox . Rival Ford has five vehicles on the list; Toyota has four. These numerical advantages show just how much GM leans on the Silverado. For now, it does not have much to lean on.