Looking to buy a Chevrolet truck or SUV? Well, the time is now! That’s not supposed to be sales-pitchy or gimmicky — I’m dead serious. General Motors Company (GMC), the parent company of Chevrolet, has recently announced some serious discounts, on an extreme level. Currently, the brand is offering incentives as high as $10,000 for some of its trucks and sport utility vehicles (SUVs). Typically, incentives are a bane on the auto industry, given the damage they do to sales margins. So, why would GMC shoot itself in the foot like this?
We’ll explore that, then talk about a couple of the specific models that have crazy deals right now.
Why Do This?
Why is GM doing this? Well, some analysts have pointed out that the parent company overbuilt cars and trucks, thinking that late 2016 and early 2017 would provide strong sales. Now, it has too much product and can’t sell it as fast as projected. When this happens to an automotive manufacturer, they get stuck between a rock and a hard place. The only way to break out? Deep-discounted sales.
This is more than just speculation, by the way. The manufacturer admitted this during a recent interview with Bloomberg. The fact is: GM is trying to reduce inventory from a 90-day supply down to about 70 days by the end of this month.
Which vehicles were overproduced? Not surprisingly, the ones that have been pushing the U.S. auto industry to new heights over the past couple years. In other words, the brand’s most popular models: SUVs and full-size trucks.
Two of the discounts are on GM’s best-selling vehicle: the Chevy Silverado. These discounts total more than the $10,000 mark mentioned earlier. Both lighter and heavier versions of the 2016 Silverado are getting these $10,000+ discounts, along with the 2016 Chevy Suburban – with the LT trim getting a price cut of $10,124.
The hope is to push these 2016 models out before the end of January, so that GM can focus its attention on the sales of the 2017 models.
Is This a Bad Omen?
Now, what many people are worried about is whether this is truly just to get the 2016 models off the lot as fast as possible. Or, is there something even more worrisome going on with the parent company?
The Chevrolet Silverado is always in direct competition with the Ram 1500 and Ford F150 truck series, after all. Two companies who aren’t offering discounts this low on their trucks, which could work in Chevy’s favor, and speed the efforts to get these 2016 models off the lot. Undoubtedly, the brand will feel the sting of a slight cut in its profits.
At this point, it’s worth the risk. Either the products sit there and don’t sell (wasted production time and expenses) or the sales are enough to make the trucks and SUVs leave the lot, and the company gets some of the money back. Just leaving them at full-price and hoping they’d sell at the same rate alongside the new 2017 models would be insanity, and GM doesn’t really have a choice at this point.
Regardless, now is a great time to get a good deal on a new (and I’m sure used) 2016 Chevy Silverado or Suburban.