More Videos
- Saab Lovers Sound Off
- Obama's Emission Reduction Pledge Paints Future for Autos
- Toyota Makes Recall Fix And So Long Saab
- The L.A. Extravaganza: A Test for Auto Shows
- Volt Drive: Great Ride, Interesting Interior and a Friendly Chirp
- Volvo Talks Show New Day Dawning for China
- Starting Car2Go - Smart Move for Daimler
- GM Cuts Losses—Plans Early Loan Repayment
- Ghosn's Bet: 10% of World Will Drive EV's in 10 Years
- Ford, Hyundai, Audi Gaining Interest
MOST SHARED
- Good Sign for the Economy: 'Greed' Makes a Comeback
- Commercial Property Fears Are Overblown: Zell, LeFrak
- Dubai Stocks Could Fall a Further 30%: Charts
- Manufacturing in Focus as Bulls Call for Turn in Dollar
- Bank of Japan Offers More Liquidity at Emergency Meeting
- Dubai Markets Close Sharply Lower for Second Day
- Timeless and Time-Tested Warren Buffett Watch Predictions
- AIG Cuts Debt to Government by $25 Billion; Shares Up
- More Late on Auto Loan Payments in Third Quarter
- Bove: 26 Banks May Need To Raise More Capital
- Farrell: Forget About Dubai—Worry About This
- How Long Will This Health Care Firm's Rally Last?
- Dubai a 'Wake Up Call'—Expect Volatility Now: Market Pro
- Treasury Threatens Banks, Not Borrowers
- We're Approaching a Market Bubble: Portfolio Manager
- Hershey Shares: What Options Are Saying
- Nov. 30: Unusual Volume Leaders
- Why Careful Shoppers Are Great for the Box Office
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Commercial Property Fears Are Overblown: Zell, LeFrak
- Trump: Time to Force Banks to Start Lending
- Accused Fraudster Rothstein Arrested
- More Late on Auto Loan Payments in Third Quarter
- Treasury to Sell 12.7 Million Capital One Warrants
- Contagion Fears Calmed by Dubai World Plan
- AIG Cuts Debt to Government by $25 Billion; Shares Up
- GM Sees China Sales Soar 110% in November
- Good Sign for the Economy: 'Greed' Makes a Comeback
RSS FEED
Behind The Wheel
Text Size 
 |
CNBC.com photo composite |
Here's what talks with truck buyers: cash. The more the better. And right now, pick-up buyers are picking up deals that have them sitting in the catbird seat. In fact, GM [GM
Loading...
()
] is doubling the cash back it's offering people who buy a new Chevy Silverado or GMC Sierra. That's an extra $1,000 on top of 0% financing.
Why would GM throw out such a an offer on new trucks that just came out last fall? To keep up with Toyota [TM
Loading...
()
] , that's why. Yes, the Japanese automaker is finally hurting the Big 3 where it really hurts--in pick-up sales. Last month, thanks to generous deals including 0% financing, Toyota Tundra sales shot up 21%. Meanwhile GM's total sales in June plunged thanks to weaker than expected truck sales. When I talked with people in motown last week, it was clear the hit in truck sales is not sitting well with American auto executives.
Since GM is #1 in trucks, and trucks are the vehicle in terms of profit, the boys in Detroit are giving dealers more ammunition to win over buyers. Will it help stop the erosion is sales? Perhaps at first. But this is not a long solution. Greater incentives hurt GM profit margins on trucks.
Unfortunately, the Big 3 incentive genie is out of the bottle and may be here for a while. Toyota is getting the Tundra sales it wants (2007 goal: roughly 200,000 annual sales) with greater incentives. If they have to keep rolling out 0% financing, the guys at Toyota will do that.
All of this is good for pick-up buyers who want a deal. These are the best offers in roughly a year, and they aren't going away. For those of you who think Toyota's truck strategy is "all hat, no cowboy", think again. With richer rebates and 0% financing the Tundra is ready to take on the big buyers
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes