GM Says Full-Size Sales Exceeded Expectations

[Variance]

The Daily Auto Insider

Tuesday, January 31, 2006

January 2006

At the Houston Auto Show, GM executives told the Dow Jones that demand from dealers for their new full-sized vehicles exceeded the automaker’s expectation. CEO Rick Wagoner, praised the fuel efficiency of GM’s large vehicles.

Both GM and Ford suffered large market loss to foreign competitors as the SUV and pickup market slowed last year. Nonetheless, GM is pinning its hopes on the launch this year of its GMT 900 line of full-size trucks and SUVs. GM says these new models will encompass about a third of its sales in 2006.

Wagoner told the Dow it's too early to predict how well the new large utility vehicles would sell but characterized the market for such vehicles as robust. He added that GM has a competitive advantage in the segment and doesn’t want to abandon it.

Wagoner also pointed to GM's recent decision to reduce sticker prices on almost its entire lineup of vehicles, including the new full-size vehicles. He said dealers have responded favorably to the decision to adjust its pricing strategy and move away from the incentives that customers have come to expect the past several years.

GM posted a fourth-quarter loss of $4.8 billion, and a full-year loss figure of $8.6 billion. This represents the first annual loss for the automaker since 1992. Losses in GM's core North American market totaled $5.6 billion, and the company has said a restructuring of its North American operations is its top priority this year.

Link: http://www.caranddriver.com/article.asp?se...rticle_id=10616

[caddycruiser]

They're already coming off as too expensive, just like the last gen's were, and I'd like to know where in the U.S., exactly, the demand is so great.

Some Tahoes are moving, but not that many...especially not with that kind of a pricetag, sans incentives.

[Croc]

??? They aren't any more expensive than the outgoing models! IN FACT, THEY ARE CHEAPER!

2006 Tahoe base MSRP: $34,890

2007 Tahoe base MSRP: $33,990

The last-gen sold just fine. Why are you saying THEY were overpriced??

[samuel]

They're already coming off as too expensive, just like the last gen's were, and I'd like to know where in the U.S., exactly, the demand is so great.

Some Tahoes are moving, but not that many...especially not with that kind of a pricetag, sans incentives.

Uhhh, well since sales were UP, they obviously ARE moving.

[caddycruiser]

I never said they weren't selling, I just said that if you do some checking and ask some dealers in different places, it's not like there's waiting lists or MSRP+ pricing going on...a good deal of them are still sitting idle, and a general consensus among a lot of buyers is that they're too expensive at this point, since there's no incentives yet.

Check this thread to see what I mean:

http://www.cheersandgears.com/forums/index...=60entry83768

[samuel]

I never said they weren't selling, I just said that if you do some checking and ask some dealers in different places, it's not like there's waiting lists or MSRP+ pricing going on...a good deal of them are still sitting idle, and a general consensus among a lot of buyers is that they're too expensive at this point, since there's no incentives yet.

Check this thread to see what I mean:

http://www.cheersandgears.com/forums/index...=60entry83768

According to actual facts vs your anecdotal evidence, the general consensus must not be what you are saying. If it was, they wouldn't have moved as many units as they did.

[Northstar]

I never said they weren't selling, I just said that if you do some checking and ask some dealers in different places, it's not like there's waiting lists or MSRP+ pricing going on...a good deal of them are still sitting idle, and a general consensus among a lot of buyers is that they're too expensive at this point, since there's no incentives yet.

Check this thread to see what I mean:

http://www.cheersandgears.com/forums/index...=60entry83768

How many waiting lists have there ever been on an SUV or truck? The F150 was probably the hottest newly-released truck (when it came out) in the last couple of years and I never heard about any waiting list on them.

You only hear about waiting list for Hybrids and aspirational cars such as the Solstice because they don't produce them in nearly as high of numbers. GM sold more Tahoes in January than it produced (some were produced in Dec. but not sold) so I'd say when selling rate is outpacing production that it must be doing pretty well.

If GM can sell them at the price it is selling them at (and doing well at that price) then I see no reason for GM to slash prices while it's making a fat profit on them. If sales start to slow then they can just lower the MSRPs.

[Croc]

I think caddycruiser is just a little ticked that maybe he or someone he knows cannot afford one...

[sciguy_0504]

???  They aren't any more expensive than the outgoing models!  IN FACT, THEY ARE CHEAPER!

2006 Tahoe base MSRP: $34,890

2007 Tahoe base MSRP: $33,990

The last-gen sold just fine.  Why are you saying THEY were overpriced??

With huge incentives.

[Croc]

With huge incentives.

Not throughout their entire lifecycle.

[turbo200]

Not throughout their entire lifecycle.

but for the last three years or so, as the MSRP ballooned into the one you quoted. The Tahoe began its last generation as a much cheaper vehicle and ended as a heavily incentivized one. I think it's far too early to start ringing the bells of success, but it's good news nonetheless. Edited February 2, 2006 by turbo200

[Dsuupr]

GM needs to put out the word about the actual gas mileage of these SUVs compared to ALOT of smaller SUVs and cars. The numbers are impressive.

[Flybrian]

Compare also the increased levels of interior refinement and added standard equipment and its very easy to justify any price 'increase.'

[Clownzilla]

Compare also the increased levels of interior refinement and added standard equipment and its very easy to justify any price 'increase.'

True! You must admit that the new GM full size SUV's are not better.............they are MUCH better! Even with a price increase, this SUV is still a much better buy.

[Munson05]

True! You must admit that the new GM full size SUV's are not better.............they are MUCH better! Even with a price increase, this SUV is still a much better buy.

I looked at one last week the loaded up LTZ. I was very impressed the interior was light years from the last gen,and if the mpg is whats advertised I honestly cant seethis not being a huge success. I would buy one right now but it is a little out of my price range right now. The fit and finish is impressive. I also think the truck is great looking. Right now im saving for the Camaro, After I get hitched well look to buy the Tahoe for a family car I can enjoy.