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What does it cost to be #2?

by David Zatz on

As the market for full-size pickups is slowing down, Michigan automakers are slamming cash on the hood to fight for market share, reducing the profitability of their most lucrative vehicles.

Last month, Ram bought its #2 U.S. sales position with an average incentive of $7,082, higher by 29% than incentives in September 2015, according to Bloomberg News. Those numbers don’t come close to the $10,000 Ford used to clear out old pickups last year, but is still high.

2016 Ram 1500 and Case CNH

The incentives were costly, but worked — Ram sales shot up by 29% while Chevy’s Silverado fell by 16% and Ford’s F-series dropped by 3%.  (General Motors pickup sales are still higher than FCA’s, since similar pickups are sold by GMC as well.)

Automotive News reported that pickup profits may be as much as $10,000 per truck. However, GM boosted its Silverado incentives to $5,647 last month, while Ford dropped F-series cash slightly to $5,173.  Some analysts have said that, due to the more expensive costs of aluminum and manufacturing with aluminum, Ford may have less flexibility for incentive spending.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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