Check out these two numbers from the slew of auto sales data released on Friday.
December sales of Ford's (NYSE:F) F-Series pickups: Up 8.4%.
December sales of General Motors' (NYSE:GM) Chevy Silverado and its heavy-duty siblings: Down 16%.
Ford's F-Series is nearing the end of its life. An all-new one is due next year. You'd think sales would be falling off, but they've been very strong.
Meanwhile, the Chevy Silverado is already all-new -- it was just rolled out last summer.
We keep hearing how great GM's new products are. So why isn't the Silverado selling better?
Why the sales numbers might not be telling the whole story
GM says there are a few external factors making the Silverado's numbers look bad. Those factors are worth considering.
First, GM points out that it had very few 2013 Silverados -- that's the old model -- left in stock in December. Most were sold off earlier in 2013, with steep discounts. (Steep discounts are typical at the end of a model's life.)
GM is being very stingy with discounts on the new trucks in a bid to improve its profits. That's not good for truck buyers, but it's the right move for GM.
Meanwhile, Ford still had quite a few 2013 pickups on its dealers' lots in December. Ford says 55% of the F-Series pickups it sold in the U.S. in December were 2013s. The remainder were new 2014 models.
Ford's F-Series didn't change a whole lot from 2013 to 2014. But still, Ford is offering bigger incentives on the leftover 2013 models than it is on the 2014s. (That's also standard industry practice. Whenever you see an automaker advertising a "year-end clearance sale," that's what's going on.)
We won't have December incentives numbers for a few more days. But according to the experts at Edmunds, Ford's average incentives on 2013 F-150s in November were $4,789, versus just $3,138 on the 2014 Chevy Silverado.
That sounds like a big difference, but the average transaction prices for the two were nearly identical, says Edmunds: $39,466 for the F-150, $39,614 for the Silverado. Again, those are November numbers, but December's probably won't be a lot different.
That makes it sound like a wash, doesn't it? But sometimes a bigger-sounding deal can help close a sale. GM juggled its incentives and pricing on the Silverado in October to make its deals sound a little more generous.
GM hinted on Friday that buyers were favoring Fords in December because Ford was offering better deals. They argue that once Ford's 2013 models are mostly gone, in a couple of months, we'll have a better basis for comparison.
That may be a valid point. Certainly, it'll be a little more of an apples-to-apples comparison as 2014 unfolds.
GM also points out that it sold a ton of pickups last December, when it was beginning the process of clearing out old models before the all new 2014s arrived. One could argue that the the year-over-year comparison numbers look weaker than they should be as a result.
Finally, GM says that it's still ramping up production of some versions of its new trucks. As more of those come into inventory, GM's sales should improve, it says.
Those are also valid points.
The upshot: It's not time to worry -- yet
Here's my take: GM is being stingy with discounts on its all-new truck, and that probably cost it some sales in December.
On balance, I think that's a good thing -- a very good thing. For too long, GM propped up its sales numbers with aggressive pricing moves that clobbered its profits.
Retiring GM CEO Dan Akerson has pushed hard to improve GM's profits -- and its vehicles' resale values. Making great cars and trucks -- and limiting discounts -- is the way to do that.
The 2014 Silverado is a strong product. GM took a conservative approach with its new trucks, and one could argue that the company might have been a little more aggressive. Chrysler's recently revised Ram has trumped it in some tests, but it's still a strong product, and it should do well over the next several years.
GM's discipline on incentives will probably cost it some sales with price-conscious shoppers, but it's the right thing for GM's bottom line. It's the right thing for GM's customers, too -- limiting discounts now will help resale values down the road.
Akerson's emphasis has been on profits over sales numbers. If GM's profit margins in North America show improvements over the next few quarters, the company's ups and downs in the month-to-month pickup-truck horse race won't matter much.
But we'll have to wait and see how that plays out before we pass judgment.