Because of stagnant sales, General Motors--for which trucks account for 50% of its sales--will cut full-sized pickup-truck build at its plants in Pontiac, Mich.; Flint, Mich.; and Oshawa, Ontario. It is doing likewise at its plant in Janesville, WI, where big SUVs are made. Shift cuts will reduce its full-sized pickup capacity by 88,000, and full-sized SUV capacity by 50,000 units.
J.D. Power & Associates' Power Information Network, which tracks sales and customer sentiment, reports that year-to-date through April 20, "days to turn"--the number of days that vehicles sit on dealer lots--has increased from 69 a year ago to 100 now. By contrast, "days to turn" for all vehicles has dropped from 64 to 61 days. Large premium SUVs have gone from 47 to 53, and mid-sized SUVs have increased from 70 to 76 days.
The picture may be worse than that because sales of large vehicles are being pushed by incentives. According to Edmunds.com, incentives for large SUVs have risen from $3,661 to $4,016 on average, across all makes. For large trucks, incentives have increased from $3,330 to $4,362. By contrast, incentives for large cars have dropped from $4,237 to $3,513 this year versus last.
Todd Turner, president of Car Concepts in Los Angeles, says some automakers are spending well over those averages. He says last month Dodge spent--on average and across its whole lineup--$4,200 in incentives. But for Dodge Ram, the company had as much as $7,500 in combined incentives. "It's a historical high," he says. Turner says Toyota is spending around $3,000 on incentives for Tundra.
Turner says GM has about 39% of the pickup truck market, Toyota has about 11%, Ford has around 40% of the market, and Dodge has about 18%.
General Motors says in the first quarter of this year, U.S. sales across all makes of full-size pickup truck and full-size SUVs have dropped 15% and 26%, respectively. Turner says as part of that, GM has lost 30,000 units in full-sized pickup sales year-to-date versus last year. Ford has lost 22,000 units, and Dodge has lost 20,000 of Ram sales.
"GM needs to do something more; it's tragic that it's the second-to-the-newest pickup in the segment--Toyota's Tundra is only six months newer--and they should not be the biggest loser in the segment," says Turner.
Jessica Caldwell, director of pricing and market analysis with Edmunds.com, says gasoline prices are not the only factors suppressing truck sales. She says the moribund real estate and development markets have had an effect on sales. "There aren't nearly the construction needs now for which you need large trucks; that plays into it, and also a growing negative attitude toward large vehicles. It was very cool once to own a truck, but now you see large vehicles have fallen out of vogue."
Caldwell says GM's truck problem will be exacerbated this summer when Ford bows a new F 150 and Dodge its new Ram. "And so you will have Silverado and Sierra going against brand-new models."