Pickup Price Wars Are Costing Ford Big

The new 2014 Chevy Silverado has touched off an old-fashioned Detroit price war. Photo credit: General Motors.

Price wars can be great for consumers. But they can be hard on automakers.

General Motors  (NYSE: GM  ) began rolling out its all-new Chevy Silverado this past summer, and reviews -- and sales -- have been strong. Discounts are part of the pickup business, but GM has tried to be stingy, to keep sale prices high and profits strong.

But Ford  (NYSE: F  ) wasn't in the mood to play along. Ford jacked up its incentives on the F-150 to almost $5,000 per truck last month. Those fat discounts might hurt Ford's profits, but from a sales perspective, the strategy worked: Ford posted a nice sales gain in September, while GM's sales fell -- and the General had some explaining to do. 

Now, GM is responding with its own discounts. As Fool contributor John Rosevear explains in this video, the stakes are high. How will Ford respond? And how will Ford and GM react when other automakers wade in with discounts of their own?

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