Exclusive: GM ratchets up truck discounts as U.S. sales skid

Wed Mar 5, 2014 8:59pm EST
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By Paul Lienert and Ben Klayman

DETROIT (Reuters) - General Motors Co (GM.N: Quote) ratcheted up discounts in February on its full-size pickups, but it is telling Wall Street analysts that it intends to maintain premium pricing and margins on the trucks despite a drop in volume and market share.

On Tuesday, Chuck Stevens, GM's new chief financial officer and a key member of CEO Mary Barra's executive team, was dispatched to New York to update Wall Street analysts on the automaker's financial outlook, including the performance of its big trucks.

A key message, according to analysts: GM remains focused on maintaining pricing "discipline," especially on the hugely profitable full-size pickups in a highly combustible and fluid U.S. market.

GM is "working on marketing strategies to gain traction at the lower end of the (pickup) market without giving up pricing gains at the high end," said UBS Securities in a Wednesday client note.

Analysts reacted guardedly to the message and observed that GM revealed few details about recent incentives.

New data on February sales incentives, released to Reuters late on Wednesday by two industry research firms, shows rising discounts on GM trucks.

Average per-vehicle discounts on GM's 2014 Chevrolet Silverado pickup jumped more than $500 to $4,218 in February, from $3,715 in January, according to Autodata, even as Silverado sales fell 12 percent from February 2013 and Chevrolet's share of the full-size truck segment dropped more than three percentage points to 22.5 percent.

In comparison, Ford Motor Co (F.N: Quote) sliced discounts in February on its industry-leading F-series pickups to $2,835. F-series sales rose nearly 3 percent from the previous year, commanding more than 34 percent of the segment.   Continued...

A line of Chevrolet trucks made by General Motors are seen for sale at a dealer in Wheat Ridge, Colorado February 6, 2014 file photo. REUTERS/Rick Wilking