Ford, GM Take Different Paths in Nov. Truck Sales

DETROIT ( TheStreet) -- November sales numbers for the Ford ( F) F-150 and the Chevrolet Silverado headed in different directions, underscoring the ancient competition involving Detroit's two best-selling vehicles.

Sales of the F-150 in November rose 18% to 56,299, prompting Ken Czubay, Ford vice president for U.S. marketing, sales and service, to declare during Ford's November sales conference call that "I've got to raise the benchmark to 55,000 from 50,000 for a real good month for us." For the first 11 months, F-150 sales are at 576,529, up 11.6%. F-150 is the best-selling U.S. vehicle for the past three decades.

November sales of the Silverado fell 10.4% to 30,674. For the first 11 months, Silverado sales totaled 367,613, just 270 vehicles more than during the first 11 months of 2011. Silverado is the third best-selling U.S. vehicle, trailing the second-place Toyota ( TM) Camry. Meanwhile, Dodge Ram November sales rose 23% to 24,337. For the year, Ram sales are up 20% to 263,152.

On the GM ( GM) sales call, Kurt McNeil, vice president of U.S. sales, conceded "we did not achieve our objective for the month" and attributed Silverado's decline primarily to high incentive spending by its U.S. competitors.

"GM had the lowest incentives in the segment, $500 lower than the segment average," McNeil said. "The biggest spenders have $1,500 to $1,700 more than we do." Alan Batey, interim chief marketing officer, said Chrysler's Dodge offered incentives as high as $5,000 on the Ram pickup. "We were shocked," he said.

The reason for the high incentives, McNeil said, is that competitors were trying to move out their 2012 trucks, something GM started to do sooner than they did.

"We started the 2013 models for Sierra and Silverado about 45 days earlier than last year, several weeks earlier than domestic competitors," he said. "This left us vulnerable to high incentive activity (when) competitors ramped up spending to sell off their 2012 stock."

Nevertheless, Batey said GM "took the strategic decision to be very disciplined. We knew they would liquidate a lot of inventory." Holding back on incentives helps to maintain residual values for GM vehicles, he said. Today, he said, 2013 models represent about 76% of Silverado inventory. At year-end, inventory will be at the high end of the previously estimated range of 200,000 to 225,000. Analysts expressed concern about the high level during the conference call because high inventories could threaten GM's commitment to pricing discipline.

But looking ahead, McNeil said, "December should be all all-new ballgame." This month is "one of the strongest months of the year for Silverado and Sierra, consumers are feeling good, housing is rebounding and we remain confident there will be a (fiscal cliff) resolution in Washington."

Looking further ahead, in the second quarter of 2013 GM will introduce a 2014 Silverado. GM has been building truck inventory this year in anticipation of plant shutdowns for retooling. analyst Jesse Toprak said Silverado "has a strong following and is long overdue for a major redesign." The new Silverado should do well, he said, "because we expect new home starts and construction to continue to improve, which accounts for a lot of truck sales."

-- Written by Ted Reed in Charlotte, N.C.