Incentive spending at General Motors’ four brands was down 46 percent in the third quarter of this year.
According to Cox Automotive, GM’s incentive spending was trimmed by 46 percent in Q3 to an average of $2,994 per vehicle. The publication found Chevrolet cut incentives to an average of $2,726 per vehicle, while GMC was close by at an average incentive of $2,935 per vehicle. Cadillac and Buick trimmed incentive spending to an average of $4,845 and $4,020 per vehicle, respectively.
Average transaction prices at GM’s four brands have risen this year as the microchip shortage took a bite out of the automaker’s production output, limiting inventory at dealerships. GM’s overall ATP rose 16 percent in Q3, Cox Automotive reports, surpassing the $50,000 mark for the first time at $50,392.
While ATPs were up, the market showed some signs of cooling off in Q3, with GM sales falling a significant 37 percent to 443,117 units. This underperformed the market average significantly, with vehicle sales down 13 percent industry-wide in Q3.
“In the U.S., which accounts for the bulk of GM’s revenue and profits, sales plunged by a third during the third quarter,” Cox Automotive observed. “GM underperformed the market, allowing Toyota to surpass it in sales for the second consecutive quarter, the first time that has ever happened.”
Chevrolet saw the biggest sales decline in Q3 of GM’s four brands. Chevy sales fell 37 percent to 284,045 units, with both Toyota and Honda outpacing the budget-friendly American brand. For reference, Chevy sold nearly 543,000 units in Q3 of 2015. GMC sales fell by 33 percent, while Cadillac sales fell by 32 percent and Buick sales 20 percent.
While this may look bad on the surface, Chevy sales were down mainly because it prioritized production of its larger, more expensive and more profitable models amid the chip shortage. Inventories and sales of popular budget-minded models like the Chevy Equinox waned, but sales of models like the Chevy Tahoe and Suburban increased. Sales of the Corvette were also up 60 percent in Q3 amid sustained high demand for the recently introduced eight-generation model.