With new vehicle demand reaching record highs and inventory levels at almost never-before-seen lows, there’s little reason for automakers to offer price incentives on their vehicles at the moment. For this reason, incentive spending at most major automakers has dropped significantly over the past 12 months or so, and General Motors’ Chevy brand has been no exception to the rule.
According to Cox Automotive, incentive spending at Chevy dipped 66 percent year-over-year from $2,672 in the fourth quarter of 2020 to $1,610 in the fourth quarter of 2021.
In line with this trend, Chevy’s average transaction prices were also up in Q4 2021, rising 21 percent to $50,336. These impressively high ATPs were driven largely by the Express delivery van and the Camaro sports car, which each posted impressive ATPs of over $44,000 throughout the quarter. The Chevy Silverado, which is the best-selling Bowtie-badged product, also saw ATPs rise eight percent to $54,432. The Chevy vehicle with the highest ATPs in Q4 2021 was the Chevy Corvette, which sold for an average of just under $85,000.
Across all four of its brands, GM slashed incentive spending by 65 percent in Q4 2021 to an average of $1,919 per vehicle. This compares with incentive spending of $5,115 per vehicle in the fourth quarter of 2020. Cadillac had the highest incentives at an average of $4,172 per vehicle, followed by Buick at $3,207 per vehicle, Chevy at $2,672 and GMC at $1,924 per vehicle.
While GM sales plummeted by 43 percent to 436,358 vehicles in the fourth quarter of 2021, Cox says it expects the automaker to still report solid earnings “because it slashed incentives and garnered hefty average transaction prices (ATP) despite lower sales.”
“GM clearly focused on the production of its high-ticket models, some of which had sales increases combined with ATP gains,” Cox Automotive observed. Pricier GM models that are helping to drive this ATP increase include the Silverado, Tahoe, Suburban and Corvette.
With automotive production output expected to remain low in 2022 as the semiconductor chip shortage persists, it’s unlikely incentive spending will rise very much at any of GM’s four brands this year.