Automotive News [AN] reports that GM's recent cutbacks in pickup truck production weren't deep enough. While Ford, Dodge and Nissan dealers are all sitting on a relatively health supply of full-size pickups– 100, 120 and 105 days respectively– GM's inventory channel is stuffed to the gills. "As of Dec. 1, inventories of the Chevrolet Silverado (153 days supply) and GMC Sierra (150 days) were bloated despite $5,000 rebates on 2007 models." The automaker's desperation to move the moribund metal is showing-up at the sharp end. "Ken Fichtner, owner of Fichtner Chevrolet in Laurel, Mont., says he took an additional 10 Silverados last month, at GM's request. This month GM asked him to take an additional 20 trucks, and he said no. 'I am sitting on a 13-month supply right now," Fichtner says. 'They wanted me to go to an 18-month supply but we only sell 10 a month, and I'm in the heart of truck country!'" As Frank Williams predicted back in April, there's only one way this is gonna go: GM will have to put massive incentives on its pickups, dinging residual values and further eroding the profits delivered by GM's former cash cows. And THEN cut production even more.
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Can’t blame this one on import bigots. Dumb move on their part that GM didn’t jump on the hybrid bandwagen years ago.
I’d love to get a Chevy pick-up for the price of some little crapwagon car.
Now if the wife felt the same way….
wohoo! i sure do hate the idea of spending $25K+ on something for hauling sod and poo
So if they’re already offering $5000 on 2007 models, how high can they go? $7500 isn’t unheard of (although it’s insane). But can they go higher? 153 days is a lot of trucks…
Two of my friends just bought Yukon Denalis for under invoice price. One got it for a full $2000 under invoice. These dealers gotta be hurting real bad, not to mention GM and the residual value of their trucks.
Then again, I know fully depreciated GM trucks will (still) be the most valuable rigs 10+ years from now. But that might be all that’s left.
It is just the market adjusting naturally. If GM has to boost rebates to move products, then it simply means that the products were overpriced.
Don’t know if this means anything, but I drove back from a family Christmas get-together in Flagstaff yesterday on Christmas Day. I set the cruise on my IS 250 to 75mph and was passed constantly by more Chevy Suburbans, Yukons and Silverados than any other make. At 90 plus mph, what do these things get, like 10 mpg?? I have no idea who these Chevy drivers were, but I could sort of sense that I probably wouldn’t like ’em if I ever met ’em. And if their kids were in these vehicles, a crash/rollover at these speeds would involve vehicular homicide.
This is basically what Farago predicted about six months ago.
The “Big Iron” is only real profit center for GM. Market is shrinking (mortgage mess, gas prices) and competition is heating up (Toyota added 200,000 units of “big iron”).
GM will ship less units, but even bigger problem is that profit per pickup will be much lower. This is big problem.
yankinwaoz said ” It is just the market adjusting naturally. ”
Easy for him to say. For GM this is big deal. Imagine losing $2000 margin on 700,000 units per year.
Not to insult GM pickups – if I needed this kinda truck this would be my first choice. But I don’t need this kinda truck (see no need to use 5,500 lb of steel to commute).
Big 2.8 still have the “really big iron” market, HD pickups. No Japanese iron here as yet, and this is fashionable market – but up against higher diesel prices.
Cost to sell overproduced pickup truck – $10,000
Choice of photo accompanying article – priceless.
There is nothing wrong with the trucks, just that they have been trying too hard to force them down everyone’s throats for too long. The end result will be depreciation which may actually hurt future sales.
I wonder if creating a base pickup with the inline Atlas V6 would would help? Make the price point for the entry model a little lower, and (hopefully) be able to tout superior economy. Of course, they would have to clear that 153 day supply (!!!!!!) first. Kind of makes me wish I was in the market, I’d bargain ruthlessly.
who wants a gas hog vehicle with cliff face depreciation and visually challanging interiors?
I find it hard to believe that Ford and Dodge are sitting on 60-day inventories, and not in the same boat as GM.
NickR :
I wonder if creating a base pickup with the inline Atlas V6 would would help?
The Atlas inline 6 is just that, inline, not a V configuration. Although generally recognized as a wonderful engine, my understanding is that it’s a little pricey to build and suffers from the “Not a V8” stigma, regardless of it’s HP & togue ratings.
Plus, it’s not really capable of improving the EPA figures much. Also, big inline 6’s aren’t the best for packaging – not nearly as flexible as a V6 (or even a small V8). I believe when GM disco’s the GMT360 platform, it’s not going to be worth producing any longer, and that will be the last of them.
Too bad – it’s good motor, typically surrounded by a less than stellar platform.
willbodine:
Don’t know if this means anything, but I drove back from a family Christmas get-together in Flagstaff yesterday on Christmas Day. I set the cruise on my IS 250 to 75mph and was passed constantly by more Chevy Suburbans, Yukons and Silverados than any other make. At 90 plus mph, what do these things get, like 10 mpg?? I have no idea who these Chevy drivers were, but I could sort of sense that I probably wouldn’t like ‘em if I ever met ‘em. And if their kids were in these vehicles, a crash/rollover at these speeds would involve vehicular homicide.
I hate to defend GM vehicles or SUV (of any make) drivers’ bad behavior. But 90mph is not unsafe on a well maintained interstate in good weather. If they were weaving, passing on the right, and/or tailgating, you should have specified…
Sure, at 90+ mph, sure your mpg sucks. But you get to your destination ~20% faster. Time is worth the extra gas and environmental damage to many people like me.
The Silverado is a great truck but higher gas prices and a depressed housing industry have taken its toll on that market and I don’t think that is going to change any time in 2008.
ihatetrees – the extra environmental damage is always worth it to the generation that will not have to pay for the consequences.
I’m hate to defend GM vehicles or SUV (of any make) drivers’ bad behavior. But 90mph is not unsafe on a well maintained interstate in good weather. If they were weaving, passing on the right, and/or tailgating, you should have specified…
Sure, at 90+ mph, sure your mpg sucks. But you get to your destination ~20% faster. Time is worth the extra gas and environmental damage to many people like me.
Your kidding us ,right?
I know you can’t actually believe the statement you just posted!
Only a totally selfish uninformed fool would push a Tahoe sized vehicle to 90mph on a public road on a busy travel day like Christmas.
Now dont get me wrong I love a good fun “drive” that involves “extra” speed. The difference is I have seen what actually happens to victims of high-speed crashes.
SUVs by design are NOT meant for high-speed travel! Just because some auto-makers are stuffing over-powered engines into these things does not make them any safer. It makes them faster and only increases the danger factor for everyone sharing that road with the idiot that thinks he is safe traveling at 90 mph in a vehicle that is uncontrollable in any but the best of circumstances.
Explain to me how it is safe for someone to drive a vehicle with just about ZERO emergency manuverabilty on a public road full of other drivers?
If you think that’s bad, try to sell a trade-in that’s 5 years or older these days. I wouldn’t be surprised to find that trucks and SUV’s likely encompass 60%+ of the vehicles in ‘wholesale heaven’ at the dealer auctions. They’re just not selling worth a flip. Even the compacts are struggling.
The housing market has quite a bit to do with it on the pickup side. No surprise there. What’s not being reported is that there are now some very serious issues with rolling people into a new model from a 3 to 4 year old model. The depreciation is just brutal (repos have hit record levels) and too many folks out there are too far upside down on their loans for GM to bail them out. It’s actually hit the SUV market the hardest but there’s plenty of options out there for someone who wants to be a near-new pickup for 50 to 60% of the initial selling price.
The ‘stupid’ financing era is on a strong decline and GM can not survive without access to that credit.
Like I’ve been saying for a long time, the large light truck market is headed back to the 25% or so of the US market it held at historically for decades. The 80s and 90s boom up to 50% of the market has been killed off by high fuel prices.
Now where the **** are the super efficient small pickups and panel vans that could sell like hot cakes with highly efficient 4 cylinder turbo diesels? Something the size of a 1972 Toyota Hilux but with modern safety, comfort, emissions and efficiency engineering. Build a panel van version on the same chassis. Lots of tradespeople and businesses could do what they need with such a vehicle and save a fortune on fuel at the same time. This is the kind of vehicle Bob Lutz will never get behind passionately because he is so thoroughly old school. He thinks the bigger and flashier is the only way to go. Now the market needs well crafted gems, not gaudy bling.
Naaaaahhhh… Americans still like to have room whether they’re driving a compact or a full-size. A lot of folks also prefer something that is easy to work on… or at least has low parts costs to it.
I can see a turbodiesel truck hitting a niche if the quality is there. But I still am a bit doubtful. Diesel still costs far more than gas in most regions of this country and unless that changes, it will be an uphill climb. That is unless the diesel version offers a phenomenal mileage and/or power differential.
Willbodine,
The hell of it is, unless you assign a really low value to your time, at least some speeding is probably cost-effective, given the low price of fuel. On a typical 1200 miles trip, I could cut 2.4 hours while using an extra $18 in gas by going 75 instead of 65. If you can cut an extra meal or night on the road, the economic penalty of additional speed is even lower.
I drive the limit, anyway (or fairly close) but, with the low price of fuel, it’s easy to see why so many pick up the pace.
But in the big picture, yeah, 90mph in an SUV – or just about anything – is irresponsible. Even negligent. And at 90mph, there’s almost certainly a big economic penalty.
“I can see a turbodiesel truck hitting a niche if the quality is there. But I still am a bit doubtful. Diesel still costs far more than gas in most regions of this country and unless that changes, it will be an uphill climb. That is unless the diesel version offers a phenomenal mileage and/or power differential.”
Based purely on what I see on the roads, the Dodge Sprinter seems to be taking a lot of share from traditional vans as a work van. UPS and Fed-x are moving to them in volume for their smaller trucks and I see all kinds of other local business users driving them around. Fuel economy from the Sprinter’s Mercedes turbo-diesel is the most often given reason for switching to these from the Econoline/Chevy Express class of full sized vans.
In the heavy duty truck range diesels also have huge market share, again in part because of superior fuel economy.
I don’t see any reason that wouldn’t work in small trucks as well.
Has nobody notice the success of the Mini? A premium smaller sized vehicle can be extraordinarily popular and profitable.
If they put $8000 grand on the hood, Im gonna buy a Silverado. Its a quality truck and I’ll be able to get it for the price of HHR. GM is in real trouble, 153 days? That is incredible!
Hasn’t Honda said they’ll be putting a diesel in the Odyssey soon? What could they do if they reskinned it along the lines of a cargo van with a lot of the comforts, and costs, stipped out? It tows 3,500 lbs. as is and seats 7. So at 150 lbs. per person that’s 1,050 lbs. with more available if we remove the seats, etc.. So they’d have a half-ton van with great reliability and more than competitive mpg ratings. Interesting.
I looked at, and drove, a Sprinter before buying a GMC, but the price differential, and having to find a Freightliner dealer (at that time) for any service tilted me away from the Sprinter. A well done Ody cargo van would get lots of consideration IMO.
“A well done Ody cargo van would get lots of consideration IMO.” Certainly an interesting idea. Chevy sold a lot of Astro vans in that configuration and Ford made the Aerostar cargo vans for years as well. What is crazy is that GM and Ford simply abandoned those markets. First of course they let the vehicles grow multiple layers of moss underfoot through over a decade of neglect, then they simply shut ’em down. Really sad.
How many market segments can a mass market company give up on and still be a mass market company?
Why make way too many trucks? Maybe this is one reason: GM has enormous overhead and labor expenses that continue even if it doesn’t make vehicles. By building up the inventory of unsold trucks, the expenses related to building those vehicles become an asset; i.e., inventory on hand. Thus, those 2007 expenses embedded in inventory won’t hit Cost of Sales until the inventory is sold, which will be 2008 for most units. It’s a way of kicking the can a little bit farther down the road.
carguy:
the extra environmental damage is always worth it to the generation that will not have to pay for the consequences.
I pay – via taxes. If the taxes are not enough, raise them. If you don’t have the guts to do that, then regulate them to death. But be prepared for political blowback when the price is finally paid by too many.
Tax energy and/or things that consume it – gasoline, diesel, natural gas, engine displacement, car weight, home sizes, home energy use, second homes, etc.
If Prius driving suburban soccer mom wants to make performance vehicles more expensive, I’ll work to have the regulatory state make her 3500 sq. foot house too expensive to heat…
whatdoiknow1:
Your kidding us ,right?
No.
Only a totally selfish uninformed fool would push a Tahoe sized vehicle to 90mph on a public road on a busy travel day like Christmas.
Correct. I should have added “good driving conditions” to my “good weather” take. I wouldn’t drive ANY vehicle 90MPH on a crowded road. Well, maybe a Euro road…
I don’t know about the Tahoe. It is one of the more suspect handling SUVs (compared to the relatively good-mannered Exploder). However, I suspect that in a well maintained Tahoe, 90mph can be safer than 75mph. Example: You’re crossing Montana/N.Dakota on your way to Minneapolis. The time/fatigue saved is worth it compared to the cost ($$$ + environmental damage).
Now dont get me wrong I love a good fun “drive” that involves “extra” speed. The difference is I have seen what actually happens to victims of high-speed crashes.
It’s not a difference. I’ve seen it too.
SUVs by design are NOT meant for high-speed travel!
I disagree. Some are fine. As long as your respect the fact that it IS a truck.
Just because some auto-makers are stuffing over-powered engines into these things does not make them any safer. It makes them faster and only increases the danger factor for everyone sharing that road with the idiot that thinks he is safe traveling at 90 mph in a vehicle that is uncontrollable in any but the best of circumstances.
I understand your frustration. However, I’d rather focus on the idiots, not the vehicles they drive. I would like to see states adopt better licensing standards for vehicles with certain weight and horsepower characteristics.
Explain to me how it is safe for someone to drive a vehicle with just about ZERO emergency manuverabilty on a public road full of other drivers?
It’s not. And I never advocated that.