For the Detroit Three automakers, pickups are not only their best-selling vehicles, but those trucks generally also yield the best profit margins. The F-Series pickups from Ford Motor Co. (NYSE: F) have been the best-selling vehicles in the United States for decades.
While Ford was converting its production lines to accommodate its all-new 2015 aluminum-bodied F-150, General Motors Co. (NYSE: GM) and Fiat Chrysler N.V. (NYSE: FCAU) upped their market shares and attracted a lot of buyers unwilling to wait for Ford’s new pickups.
Ford has since reclaimed its lead, but last month, Ram pickups from FCA outsold Chevy’s Silverado by more than 2,400 units. That hasn’t happened since at least 2010, according to a report from Bloomberg News.
The good news for buyers is that competition among the U.S. pickup makers is generating steep discounts as automakers launch an end-of-the-year price war.
Profit margins on pickups from all three automakers average about $10,000 per vehicle, leaving them a lot of room for attracting buyers with incentives. In September, average incentives on new vehicles from FCA totaled $4,302, according to an estimate from TrueCar. Ford’s average was $4,092 and GM’s was $4,101.
Incentives on pickups were more than $1,000 higher per vehicle, according to data from obtained by Bloomberg from J.D. Power. Ram pickups from FCA had an average incentive of $7,082, while incentives on Chevy’s Silverado averaged $5,647 and F-150 incentives averaged $5,173. Year over year, incentives for Ram pickups were up 29% in September, and sales were also up 29%.
Buyers want pickups, but the price for the vehicles has reached a level at which many people cannot afford them. According to Michelle Krebs at Autotrader, the imbalance between shopping interest in and inventory of pickups is greater than in any other type of vehicle. Supply far exceeds demand, largely due to sticker prices. Manufacturer and dealer incentives help redress that imbalance, and from now until the end of the year, those incentives are larger than they have been since December 2008.