The nation’s second-best selling vehicle is on sale for an extraordinary $8,162 below its sticker price. The discount shows just how desperate General Motors Co. (NYSE: GM) has become in competition with the other two top selling vehicles in the United States — Ford Motor Co.’s (NYSE: F) perennial market leading F-series and Chrysler’s Dodge Ram. The big discount may also be a signal that GM’s recalls have started to hurt its overall sales.
GM currently offers the Chevy 2012 Silverado 1500 Double Cab All Star Edition with a $4,500 cash allowance, $2,912, and a $750 option package discount. The sticker price of the truck is just over $35,000
Chevy sold 107,757 Silverados in the first quarter of the year, down 7.6% from the first quarter of 2013. Ford sold 178,358 F-series pick ups, an increase of 2.7%. But Chevy’s real challenge is that the long-time No.3 Ram passed it in sales in March–42,532 to 42,247. The Silverado’s sales did rise 6.8% in March, perhaps because of discounts. However, RAM sales rose 25.7%. The Silverado, at the current rate of sales, could be bumped out of the No.2 spot for a long time,
GM is up against two trends The first is the U.S. auto sales improvements have slowed in general after surging in 2012 and 2013. One school of thought is that the economic recovery has not been powerful enough to keep consumer spending high. The other is that most people have replaced their old cars, SUVs, and pick-ups they held onto in the deepest part of the recession. Many of those people have relatively new cars and may hold off replacing them for another year or more.
Of course, the wild card for GM is the extent to which car buyers will turn away from all of its products because of a series of recalls, deaths and charges the country’s largest car company covered up the dangers. April car sales figures will be out in slightly less than two weeks. If GM’s sales are down across most of its models, the problems it has with the Silverado will be minor