Average transaction prices across the industry will moderate as production normalizes after years of supply constraints, said Srini Rajagopalan, managing director of data and analytics for J.D. Power, particularly as automakers build more entry-level models and base trim levels. But, he added, automakers also have learned that they don’t want to overproduce and discount to move metal.
People are still willing to pay more than $100,000 for luxury or niche vehicles, and profit margins on them are good, so it makes sense for automakers to keep building them, said Jessica Caldwell, executive director of insights at Edmunds.
Pricing on the Denali versions of the Yukon and Yukon XL full-size SUVs, for instance, topped $90,000 this year through February, according to Edmunds data.
“I don’t think every brand can do that,” Caldwell said. “It probably is a bit easier [for GMC] because they have always been that step above the mainstream.”
Yet, she added, it is important for brands to also be mindful of consumers who need to purchase at lower price points.
Aldred said GMC’s pricing strategy does not leave behind buyers, such as for its smaller crossovers and midsize pickups, and has built a lineup that supports both.
Consumers can still buy a full-size GMC Sierra pickup in the $40,000 range, said Bo Mandal, CEO of Mandal Automotive Group in Mississippi, who has a Buick-GMC dealership. But consumer demand is “incredibly high” for Denali and AT4 vehicles, as well as for the Yukon large SUV, he said.
The content and features GMC is putting in its vehicles are comparable to luxury brands, said Mandal, chairman of the Buick-GMC National Dealer Council, who also has a BMW store. A truck today can be a family vehicle, he added, not just a household’s second vehicle.
“The premium truck’s the more popular truck right now, no question about it,” he said. “That’s what everybody wants.”
Aldred said he thinks shortage-driven pricing, including dealer markups, has somewhat settled down, and buyers of fast-turning top-end vehicles likely are less affected by interest rate hikes and high monthly payments.
“Certainly for GMC,” he said, “we’re still seeing that [demand] is remaining very robust indeed.”