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Old 8th April 2014, 14:14   #1
Black 6050
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Default RAM Pickups out sell Chevy Silverado

Is the world coming to an end? Perhaps not, but I'll Bet GM and Ford, will start to mention Dodge in their pickup commercials now. And, perhaps they should thinking about mentioning the Challenger in their Camaro and Mustang ads….or Chrysler just might give them another surprise……..

How Chrysler's Ram Crushed the Chevy Silverado

John Rosevear
April 5, 2014

Sales of the Ram were up big in March -- enough to out-sell Chevy's Silverado for the first time in years. Source: Chrysler

Think you had a hard week?

Think about how it would feel to be General Motors GM.

I'm not even talking about the beating CEO Mary Barra took when she testified before Congress about GM's unfolding recall debacle.

That was plenty bad, of course. But behind all those recall headlines was this grim news: The Chevy Silverado pickup -- arguably GM's single most important product -- came in third in total sales last month.

That was a surprise. And it can't be making GM's leaders very happy.
Yes, the Ram really outsold the Silverado in March

Ford's F-Series pickups win the monthly sales wars more often than not, even when the Silverado's sales totals are added to those of its upscale sibling, the GMC Sierra. It's not a surprise that the Blue Oval's pickup out-sold the GM twins once again in March.

But it's not every day Fiat Chrysler's Ram pickups outsell the Silverado.
In fact, it hadn't happened in almost 15 years -- until it did, last month.
Chrysler reported on Tuesday that it sold 42,532 examples of the Ram 1500 and its heavy-duty siblings in the U.S. in March, beating the 42,247 Silverados and heavy-duty Chevy pickups sold by GM.

Silverado sales rose 14% last month, but it wasn't enough to beat the Ram. Source: General Motors Co.

Sure, if you add in the 16,863 full-sized pickups sold by sister brand GMC in March, GM still holds a solid second place in America's pickup sales wars.
But like I said, it has been a long time since the Ram out-sold the Silverado.

How did Chrysler pull off that victory?
By going where GM has recently been trying very hard not to go: To the land of deep discounts.

Big discounts led to big sales for Chrysler

According to J.D. Power figures reported by Bloomberg, Chrysler's incentives on the Ram 1500 averaged a whopping $5,598 per truck, 35% higher than Ford, and 46% more than GM.

Now, many of the individuals who buy pickups for their own use have strong brand loyalty. It takes more than a fat discount to get loyal Chevy (or Ford, or Ram) drivers to switch brands.

But commercial fleet buyers are much more price-sensitive. A lot of pickups are getting sold to general contractors and oilfield-services companies and the like right now. For those buyers, who might be buying three or four pickups at a time, a fat discount can make all the difference.

GM's pickup incentives used to be among the highest in the business. But the all-new 2014 Silverado and Sierra were supposed to change that. They're much better trucks, GM reasoned, so we're going to ask higher prices for them.
That has worked out pretty well for GM -- at the upper end of the pickup market. GM is selling a lot more loaded trucks than it used to, and it's getting much better average transaction prices for them. Long story short, it's making much more money per truck than it did on the old Silverados.
But that strategy has cost it sales at the lower end of the market -- and Chrysler has stepped up to take advantage.

GM is already striking back, but how much will it help?

GM initially scoffed at the Ram's sales victory. As GM spokesman Jim Cain told Automotive News, "The 1980s called. They want their marketing strategy back." He went on: "It's really easy to deeply discount your truck, mine the subprime market and offer cheap lease deals to buy market share."
That's all true. But it's also true that GM boosted its own incentives in March. The average per-truck payout was still far lower than Chrysler's, but on some models, the discounts were rich -- over $7,500 off of the sticker price. It helped -- Silverado sales were up 14% -- but not enough.

It also rapidly became clear after the sales totals were reported that GM's dealers would really like to be selling more pickups. Just hours after Cain's statements to Automotive News, the trade publication reported that GM was setting out to beat Chrysler at its own game.

Automotive News reported that GM will extend its March discount program on Chevy trucks, and they're sweetening the pot with an additional $1,000 on Silverado 1500 double-cab models.

And so the battle goes on. But at what cost to GM's profit margins? We'll find out.

So the question is….Is the Silverado a good truck that just needs a better price? Or is GM trying to make lemonade out of a lemon, here?
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Joe G.
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