Alternative to the Ford F-150 that is.
At its core, the science of economics is actually much more simple than the morning market news will have you assume. If people aren’t buying, lower the price. Then, if demand is too high, simply raise it until the public interest tapers off. Things change when a competitor is introduced because then, a price war is started. According to Automotive News, that’s just the type of battle that’s started between Ram and Chevrolet in the full-size pickup segment.
The truck segment is an incredibly strange one to be a part of, but it pays well for the automakers that decide to join. It doesn’t cost manufacturers that much to actually build trucks, but the markups mean that profit margins are gigantic. However, Chevy and Ram have gotten locked into a bit of a price war lately and as a result, the incentives keep rolling in. For the first time since 2010, Ram has outsold the Chevy Silverado, by 2,412 trucks. Ram apparently outsold the Silverado back in 2014 by a couple hundred trucks, but that number is under scrutiny by the US Justice Department after FCA was caught forging its sales numbers.
The reason for the current uptick in discounts, which average $7,082 for Ram trucks this year, are because the price of new trucks has ballooned so much that buyers are shying away from them in favor of used models. Still, some of these sales could be attributed to the fact that Ram gave an average of $1,000 extra in incentives for its trucks than GM did. GM spokesperson Jim Cain said. “Profligate spending like that could set them up for a dead cat bounce.” Essentially, that means that Cain thinks Ram’s method is a temporary stopgap that won’t be enough to prop up sales once the incentives are gone. Even if this is true, the fact that Ram and Silverado sales are so closely tied up with each other is only an indicator of how hot this race is.