Will GM's Pickup Strategy Continue to Pay Off?

2014-Chevrolet-Silverado-Action front II

Apparently most of the 2014 Chevrolet Silverado and GMC Sierra 1500 critics who panned the new half-tons' conservative design strategy deserve to eat some crow. According to Automotive News, the fact that GM's twin pickup trucks have lost marketshare should not be the key to assessing the success or failure of the new pickups. With transaction prices of the pickups at $5,000 more per vehicle than last year, these two trucks have played a major role in providing the new GM with solid profits.

But some dealers are worried that the drop in marketshare and GM's reluctance to put more incentives on the hoods of the trucks means some customers will turn to a competitive dealer, especially when those competitors offer segment-exclusive technology and cool features the GM twins lack. The article speculates that the next generation of GM 1500s could make use of more lightweight materials, offer eight- and 10-speed transmissions and more fuel-efficient powertrains. Some of the more aggressive federal fuel economy regulations don't go into effect until the 2019 model year, right about the time the next-generation Chevy Silverado and GMC Sierra are due.

Whether GM is willing to concede any more marketshare (remember, Ram outsold Chevrolet in March, 2014 for the first time) or is able to pick up a few percentage points with more incentives remains to be seen. GM seems to have done pretty well designing and producing more $40,000-plus trucks for customers, but to stay in the black it will need to address its market-share slip soon, and that could mean better pricing and bigger deals. Summer and fall pricing will be key.

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Comments

GM better have their 8 speed behind their engine by the '16 model year.

I think its two fold. GM went the route of refining a decent truck which goes a long way in adding quality to a truck as they do ride and drive very well better then some of the competitors but they don't bring anything new to the table which doesn't bring in new buyers especially when they are more expensive then the other brands.

@Mark Williams

Don't count GM out yet. Counting March as a big gain by RAM forgets that Chevy is just one piece of the GM truck pie.

Then there's the new Canyon/Colorado in September just in time for the NFL season. Something tells me the dealers will be busy this Fall.

Does anybody else remember how GM dealers were complaining last year that they had to give their trucks away because the factories produced so many to keep supply steady for the new model factory shutdown?

I would surly hope they could squeeze $5000 more out of a new product, when they were giving the last model year trucks away.

To be successful with only $5000 more per vehicle, they should be increasing sales, but with decreasing sales they probably should be more like $8000 more per truck.

I'm not sure I would call the re-design completely "conservative". They made the front ends big enough to house a small family so I would say the exterior change is risky, in a bad way.

The new 5.3 is conservative though, considering how much hype there was regarding its design I can not believe how weak it feels and how underwhelming the MPG is.

Chevy needs to look to the past and sell vehicles similar the way Saturn did. When you bought a Saturn everybody in the dealership came out and thanked you and clapped, they thru parties for their customers, every year Saturn Owners traveled to the factory in a cross country meeting, they treated the customer as gold or it was an enjoyable experience to go to the dealer, they made you feel special, like a friend!
The last time I was in a Chevy Dealer the salesman smelled like he was smoking weed and was yelling at me at the top of his voice throwing different prices around so fast nobody could remember and he followed me around so close that I stepped on his feet twice.
I kinda wish Wal Mart would sell new vehicles instead of going to dealerships

Will their strategy pay off??

Build a new truck that isn't really new, increase the price, drop market share, and get hit by a slew of recalls..................

Sounds like "old" GMC............

and we all know how that turned out.

@Tom#3--The buying experience of most dealers is not very good. I would rather just order a vehicle over the internet directly from the manufacturer. Cut the price and sell direct. Not likely to happen but it would save a lot of aggravation and save money.

The new new trucks aren't coming to 2019, so they will be semi-competitive this year.

Next year GM will not be competitive. GM will sell less and less. Lose more market share and have to increase inentives.

Then there's the new Canyon/Colorado in September....

They will cannibalize Silverado and Sierra sales.

Then…….every time they add more rebates to sell the Silverado, the mid-sizers will suffer from being too close in price to the full-size range.

Then they will need to rebate the mid-sizers even more to sell them.

Then you wind up with lower transaction prices and you can kiss the $5k more per truck goodbye.

Rinse, Repeat.

It's easy to tell which of you have ever worked for a car dealer.

The GM salespeople are pumped about having a truck to compete with Tacoma and Frontier.

Ford salesmen? RAM salesmen. Not so much.

Salespeople only care about getting a pay check and leaving to party on Friday night, not the company strategy.

Colorado will probably cannibalize full-size sales more than GM would like to admit.

They will be lower profit sales, also. Thus, GM will sell more truck "units," but will make the same money as if they sold more fullsize units.

NOBODY has had a very successful midsize, and a fullsize truck. This will be very interesting to watch.

@SilverFX4Guy - "The new 5.3 is conservative though, considering how much hype there was regarding its design I can not believe how weak it feels and how underwhelming the MPG is."

You're a Ford guy who knows nothing about "how weak a Silverado feels and much less about the MPG! The 5.3 gets better MPG than your sorry ecobust and doesn't need a turbo for power. Guess what happens when that turbo goes out? You have just another $hitty V6 engine from Turd. Some of you morons on here make up $hit to sound like you know what you're talking about, but in fact, you sound like the uneducated retard that you are. The new 5.3 from GM is the most refined motor out there. We just bought a 2015 Yukon XL and got 23 MPG driving it home 350 miles away. That's pretty damn good! The Turd ecobust gets 22 MPG when it's empty, going down a hill, with the wind behind it. The second you put some weight on that ecobust, your MPG cuts in half. Do some research like Motor Trend, Pickuptrucks, TrucK Trend, and all the others have and you'll see that GM's 5.3 actually gets the MPG that it claims, unlike Ford and Ram! Even my Ford fans say they wish they had their Ford truck with GM's powertrain, the 5.3 motor. They hate the pansy a$$ sound of the ecobust and the fact that it's a V6.

GM fanboys hate the EcoBoost cos they don't wanna get their Chevy V8 spanked by a Ford V6.

Here's a crazy idea...

Which is better, selling 100 trucks and making $1000 on each one or selling 75 trucks and making $1500 on each?

Unless you know the actual dollar profit margin on each truck, you can't make a cogent statement about whether GM is succeeding or failing.

I know from my past business experience, sometimes volume is overrated.

I'm not a big fan of how GM is managing itself. It appears they stole the 1990s 'How to Run Toyota Inc' handbook and are trying to copy it.

GM seems to forget that at least Toyota built it's reputation in the 70s and 80s by manufacturing good, reliable and affordable vehicles. This is something that GM is lacking.

The shining light I see for GM is the diesel Colorado. I just hope GM invested enough money into the truck to make it a competitive vehicle. Not like our Colorado which is nearly a generation behind the Ranger, Amarok and BT50.

Soon the Hilux and Frontier will be out. One of them is sure to be far, far superior to the Colorado and the other far better.

I don't see GM doing well into the future with pickups, they will be where the Ram was, only supported by a handful of diehard fanboi's.

I don't think the Colorado will affect Silverado sales very much if at all.

1) The vast majority of truck buyers go into a dealership shopping for either a small truck or a full size truck. I doubt many will be cross shopping them.

2) Right now small truck buyers are not going into GM, Ford or Dodge dealerships at all. Bye the end of the year they will be going into GM dealerships and that can only be good.

3) I believe it would be a heck of a lot easier to move a Colorado to a Silverado then the other way around.

Dont worry for gm ,,,,,

@Big Al,

I can read the facts for myself, I was hoping you could share some opinions with us.

Although I know "brand loyalists" will disagree with me, I tend to think all of the current full-size trucks on the market today are extremely good and capable vehicles. Even the Titan. Where I think GM is gambling is counting on their loyal customers who would not consider a different nameplate never deciding to jump ship. If one was to go test drive all of the trucks on the market with no preconceived brand loyalty why would they not choose the one with the best price? They are all great driving vehicles with similar capability and real world mpg.

GM having so many recalls ,not just with its new half ton but other vehicles . I would not consider a Gm truck at any price. I feel sad saying that, but trying not to pay familys compensation over the ignition switch fault.when they have lost loved ones is just disgusting !

@Mark Williams
I think it would be good to try to spread out when articles get posted throughout the week instead of posting 3 in a day and then going several days without a new article.
I find that when several articles are posted in a day, only the most recent one gets comments. If only one article a day gets posted, that gives us more time and opportunity to discuss the article.

Last month I looked at a 2014 Chevy Silverado regular cab, short bed Z71. Now I know regular cabs don't have their appeal like they did, say 15 or 20 years ago, but they still appeal to some people. But what person would pay upwards of almost $40,000 for a Z71 regular cab pickup? For that price you might as well get a 4 door crew cab or an LTZ double cab.

Strategy?

Make a Shitty looking truck with no real innovation and charge more than the competition to those dumb enough to pay for it?

GM disgusts me, and I was raised on chevies.

Think about the strategy rationally.

The goal was to increase market share and transaction prices. Not lose market share. The goal was to increase both!

If you're is in denial about it, if you are minimizing it, if you're conning yourself about it, then you'll never get where you need to be.

@ Jack

I was in the market for a mid size pickup a few years back. Was leaning towards a tacoma since I had owned 2 previously. I found that the tacoma was priced exactly the same as an equally equipped ram 1500. That was when I bought my first full size ram. I've owned 3 now and going back to a mid size never crosses my mind.

So my point is people will cross shop, but i don't think they will be interested in the full size and swayed to the mid size truck. If that is the case, It would be another blow to GM's wallet.

" means some customers will turn to a competitive dealer, especially when those competitors offer segment-exclusive technology and cool features the GM twins lack."

Lacking = G.M. Trucks!

Nobody's perfect. As long as your strategies are non-destructive, you can learn to live with them. If a Colorado is 90% the size of a Silverado but cheaper, it could cannibalize sales of the more profitable trucks.

Be careful to distinguish the difference between a strategy with flaws and one with a serious problem. Serious problems losing market share to cheaper and less profitiable trucks. Unlike idiosyncrasies, these are not behaviors you should learn to live with.

Ditto what others say. What continued working strategy?

Sound like there is some real butt hurt people out there, Like Alex, he cry's bout some taho he drove two years ago for a rental with no 4 low transfer case and radio system LOL! Then you got Mrs big al from oz only sticking up for GM cause they offer a midsize with a diesel to fit his on going mind set to make us all drove slow snails.

You people need to really grow up. GM could be give away trucks like Ram but they aint. They got the edge offing a small lower price truck to get people to step in GM'S dealer ships door way to see what they have.

@ Lou_BC
Part of your statement was not accurate "Build a new truck that isn't really new" when the 13 and 14 1500's are nothing a like mechanically. What you just described is what Mike Sweers does when he talks about the 13 and 14 Tundra which are mechanically a like for bean counter reasons most likely.

@ All Ford Guys
Please someone tell me why when you guys compare the EB to any V8 you guys refer to it just as a V6? You know that is very misleading when the thing has not just a turbo but two turbo's. Since turbo's are found on HD trucks engines and jet engines that is no small thing to leave out. The performance of the 3.5L EB is very good but you don't have to over hype it as saying a twin turbo V6 has better performance than a NA V8 doesn't sound all that astonishing does it.

I would place myself in the same group as many others here, since I don't at all agree with GM's strategy. I do understand why they are doing it though. Their quality in the past has been lacking and by charging a premium for their trucks, they hope to uplift their image from being a seller of "fleet" or "rental" vehicles to a company producing class leading vehicles. Unfortunately for GM, the public knows better and has already called GM's bluff, we know that from the slow sales of the trucks.

For GM's strategy to work their trucks would have to be MUCH more desirable than Ford, Ram, Toyota or Nissan. Few here would say that's actually the case. As a side note, an interesting story that illustrates this is that I have a friend who bought a new GM truck. He would be considered a loyal diehard GM guy. To my surprise, no one noticed or paid any attention to his new truck. I kind of felt bad and I made a point to ask him about it and have him show me it. If it wasn't for that I don't know if anyone else would have noticed it. I think their trucks have come a long way in some respects, but there is just something about them that isn't getting people excited.

Now getting back to GM's strategy, I mentioned what I think is the reasoning behind their strategy. The idea was brought up earlier in the comments that GM can only make money on having thick profit margins. Since it seems their strategy has been cannibalizing sales, I wonder how long can that strategy last? Everyone else, such as Ford and Ram are operating on much thinner profit margins. Actually, even when their trucks are being sold with $10,000 in incentives they are still making tons of money. They wouldn't be in business if that wasn't the case.

The problem will a slow selling model is it isn't as relevant to the public as a fast selling model (Ford) or even a model that is growing in sales (Ram). No one wants to be "that guy" who went out and bought an overpriced, underselling truck that people have heavily criticized.

Lastly, I think pricing has a profound influence on the customer's ultimate truck decision. Lets put it this way, if everything were reversed and Ram was selling their trucks for $10,000 more than the competition, lets say $45,000 and a similar truck from Ford and GM was $35,000, then I would most certainly go for a GM or Ford.

@johny dope
I thought our 'discussion' yesterday resolved some of your differences and your animosity towards 'things' not from Mexico or the US.

It's amazing how some of you guys have a limited level of comprehension.

Have you read my Colorado comments at all? Or, better still can you construct a 'picture' in your mind of my views and impression of the Colorado?

It appears not.

@Big Al from Oz
I think the Colorado has potential, but GM has to play their cards just right with this one.

Most importantly, with the slow sales of the full size trucks, they wouldn't want them to cannibalize the sales of them at all, not after all the money that has been put into the full sized trucks. That could happen more easily than most people think.

It brings up an interesting question though, that is, how many full size buyers have been buying full size trucks due to the lack of midsized trucks? The problem is, I don't think that the Colorado will revitalize the midsized market in the U.S. This has historically been a market in which buyers have been quite reluctant to "buy American". Toyota and Nissan have had a strong impact on the compact/midsized market and still do. With the failure of the previous generation of Colorado, unless GM gets a massive advertising campaign going to promote the new Colorado, I think the general public might assume it's the same shoddy truck as the outgoing ones. The public needs to be made aware that the new Colorado is a viable player in the midsized market or it's not going to sell.

@Hemi @Big Al

the approach to compact trucks changed about 10 years ago, but Ford continued making the (North American) Ranger anyway. Wrong approach.

GM released the first-gen Canyon/Colorado about the same time. It was not their best effort. It was about 8 years old when the first ones hit dealer showrooms. Nissan and Toyota killed it.

Nissan and Toyota had such solid compacts in their lineup back then that RAM douched the Dakota. Apart from Q/A issues the Dakota V8 was a nice truck. But it's gone now.

Back around 2001, Ford had the old school Ranger, Chevy had the S10 and RAM had the Dakota. None of those trucks are available today but a lot of people liked them.

Ram needs a compact; ditto Ford. GM is there with a second stab at the twins. See how they do this time.

@Hemi Monster
I agree the Colorado will not revitalise the mid size market.

If any of the latest GM light duty commercials (other than the Nissan/Renault van) is anything to go by, GM will/has already srewed up the Colorado/Canyon.

GM is trying to operate on the cheap. It has to because previous poor management by the UAW and GM execs, supported by poor government subsidies have allow mediocre business practices to continue.

In all honesty I do hope GM goes the way of Chrysler and is sold to an overseas company that knows how to run a business.

GM has much potential, but it's culture from the top to the bottom is an example of how an institution can go wrong.

Once businesses as large as GM have problems it is very hard to change direction.

GM needs to be sold and restructured, this should of happened in 2008. But, the government was more interested in saving the UAW than the company.

@papa jim
I totally agree there is no market for compact pickups in the US other than a niche market. The compact (like in the link) will probably sell to retiree's in Florida and teenage girls in LA.

I can see after looking at the photo in the link below that compact pickups might not be a big seller in the US (or even Australia for that matter).

I do think a midsize pickup will be more viable in the US rather than a compact pickup. Diesel ones will gradually become popular.

The aluminium SUVs with a balcony will make steel midsizer more attractive.

Imagine a global Ranger with the 2.7 Eco Boost! I would like to see that here.

http://www.tundraheadquarters.com/blog/wp-content/uploads/2010/04/scion-xb-truck-1.jpg

I think toyota sells around 200,000 tacomas a year hardly a niche market.a ford raptor would be an example of a niche market.when you think about it todays small pickups are about the size of old full size ones or at least the size of a dakota.the bad part they cost about the same as older full size pickups.

By the time the Colorado rolls out, GM will have numerous other recalls and GMs name will be too tarnished to sell all that many Colorado's. So they won't impact 1500 sales. GM needs to worry about the new 2015 F150. It will get record mpgs for a gas truck. Even as good as the Co.

who cares...go FORD

When you have the best truck on the market and the next best truck is in 7th place(ford), you don't worry about a disposable truck that is in the 18th position, (ram). That is just how far GM's competitors are behind the Sierra/Silveraldo. It is like 2nd place winner at Daytona being 7 laps down from the winner..........blown away! GM knows ford is its only true competitor and ram is for renecks not smart enough to buy a ford because their mommy is the sister and daddy is grandpa. The Tundra is making strides and is a better truck than ram but lacks market share

Will their strategy pay off??

Build a new truck that isn't really new, increase the price, drop market share, and get hit by a slew of recalls..................

Sounds like "old" GMC............

and we all know how that turned out.

Posted by: Lou_BC | May 6, 2014 4:30:52 PM

Sounds about like Ford for the last several years concerning their entire F-Series line. Updated but never redesigned. At least the GM trucks got entirely new bodies, updated chassis, engines, etc. What has Ford done lately? A new dash, new grilles. GMAFB, Lou you are so freaking wishy-washy. Last year you say that you'd consider a new GM truck. You change your mind like I do my underpants.

"Imagine a global Ranger with the 2.7 Eco Boost"

@Big Al

Actually, it fails unless the Ranger of your dreams comes along at about $25k (with the base trans/motor--or at $30k tops with trim upgrades and Eco Boost).

I continue to believe that the math doesn't work. As a workable alternative, imagine the drivetrain from Subaru's turbo Forester six-speed resting under a global mid-size crew package.

Subaru sells their turbo all wheel drive SUV for about 30k.

The math works, yet Subaru still sells the majority of its Foresters with the base drivetrain. Go figure.

Subaru's low center of gravity, torque and intelligent AWD system is perfect for an off-road plaything with some mild towing and driveability chops.

Throw in near perfect scores for reliability and it's being made in Indiana and you're there.

They just need a partner with some real world pickup packaging and sales experience. Ford? GM? RAM? Nissan?

Me thinks somebody is using Big Als moniker...

GM or GMC as some call them still has the same problem they've always had. Themselves. Who and or what is a GM? Over the years I've seen countless examples of this. 2-3, sometimes 5-6 vehicles that look like the same exact car,suv,cuv,truck with a few grill changes and trim packages. And then to add insult to injury they stick some sort of fake brand/company badge on them and try to fool the buying public. Are you really buying a Chevrolet? Or a Buick? Of course you're not. That last mid century nostalgia of Chevrolet carried them through some tough times but even those die hards have been leaving. The world is passing them by and especially in the truck realm. Somebody needs to rip the band aid off and turn this company (whoever they are) into a 1 truck company. Quit splitting loyalty. And in house of all things with Chevrolet truck guys battling it out with GM truck guys and vice versa. It's not just in internet land either. There's tons of guys in GM's with calvin peeing on Chevrolet stickers. And there's tons of guys in Chevrolet's with calvin peeing of GMC stickers. I've seen fist fights over this stuff with GMC guys saying their truck is GM and Chevy guys saying their truck was real Chevy from decades ago and GMC exists because of Chevy. It's insane. Is that really how a proper company is run? They need to put all the trims and all of the options/packages into 1 line of trucks and be done with it. It's the only way they'll survive into the future.

What they've done to devalue Chevrolet to elevate GMC for example is a Prime example. One truck (GMC) gets the looks, the trims and the marketing. The other (Chevrolet) gets shafted. Chevrolet customers simply leave. It's happened to their car sales for the same reasons unless you're talking about a Corvette/Camaro. Until they become 1 unified thing, I don't think their strategy will amount to a hill of beans.

The front end on the twins is ugly as sin. I hope the next models look better.

I'm pretty brand loyal to Toyota. But with that said if Toyota doesn't step up their game on the Tacoma by the time the new Colorado/Canyon diesels hit the lots I may venture to GM. But this is assuming that GM doesn't price themselves out of the market like they usually do when they offer a niche' vehicle.

I do not know what is up with Ford these days but honestly I am about over it. I'm a regular Super Duty buyer usually every 3-4 years. Not anymore. No new truck in 15 years, unreliable diesel engines, antique solid axle front suspension, wet noodle frame etc., etc. The list goes on and on. Time to look elsewhere.

@98Sienna

Yeah, Big Al normally hears a sound like a dog whistle when someone posts a response to his comments. For him to go more than 3 hours without a reply means

A. his ISP is down
B. his hearing aid is turned off
C. drum roll please, he's cleaning the fuel injectors on his truck--again.

Here I am. My ears were burning!!!! Was someone talking about me?? I want to apologize to johnny doe for being mean to him the other day.



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