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Future GMC Product May Hinge On Buick; "Something Fresh" One Year Away

12K views 92 replies 54 participants last post by  LARSONEM 
#1 ·
Wards Auto News

February 4, 2015



Article Quotes:

DETROIT – Duncan Aldred, U.S. vice president, Buick-GMC, confesses the iconic General Motors truck brand soon will add at least one more offering to its lineup, but says there are no plans to grow the profitable unit much beyond what it offers today.

“To grow to 5% (industry) market share, we will need one or two additions to the portfolio,” Aldred tells WardsAuto during a recent interview here. Aldred, who wants to expand the brand’s U.S. market penetration from 3% to 4% within five years and to 5% within 10 years, stops short of sharing details on the next GMC product but suggests something fresh could emerge as little as 12 months away.

“When you look at the portfolio, you start to think, ‘What niches are there?’ You could argue a third (CUV) between the Acadia and Terrain. But there is not much space,” he says.

One key consideration for future GMC products, oddly enough, hinges on Buick. The shared sales channel means both brands vie for showroom space and marketing dollars, neither of which are limitless – for GM or its dealers.

That means the next new product from GMC may not be so new after all. WardsAuto forecasts a redesigned Acadia in 2016 as a ’17 model, but as a slightly smaller edition of the 7-passenger CUV. The new Acadia would realign the Buick-GMC showroom to include four sizes of CUVs, with the large Buick Enclave at the top, followed by the shrunken Acadia, the midsize GMC Terrain and the compact Buick Encore.

“Too much product sometimes can be as bad as too little,” Aldred says of the showroom dilemma. “I think GMC has got it about right.”

“We are looking at portfolio options,” Aldred says, adding that whatever the next product is, it will not be half-baked. “It’s a truck brand and it’s a premium-truck brand. We’re not going to move away from that.”

The latest addition to the GMC portfolio has been a resounding success, Aldred claims. The Canyon midsize pickup and its Chevrolet Colorado platform mate cannot meet brisk demand.

“The momentum is phenomenal and we’re trying to think of creative ways to increase line rate, capacity, it’s a good problem to have,” he says.

Aldred expects a big year for GMC in 2015. The brand is coming off a year where it sold 501,853 vehicles, up 11.3% vs. year-ago. Average transaction prices ballooned 10%, and 21% of sales were highly profitable top-of-line Denali models.

Brand-building will be the primary driver, supported by greater advertising and marketing budgets. Aldred declines to say how much, but estimates spending will double. A key piece will be a television campaign the brand is wrapping up to air in the first quarter.

“It will really position GMC as a premium-truck brand,” Aldred says.
 
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#48 ·
The Wrangler starts at $23k. The Canyon starts at $21k. By your logic, GMC shouldn't sell the Canyon. I think a Wrangler is a fairly truck-like vehicle and GMC can sell them at a premium. Plus Chevy dealerships are already packed with 18 different vehicles; 9 cars (Spark, Sonic, Cruze, Volt, Malibu, Impala, SS, Camaro, and Corvette), 2 vans (Express and City Express), 3 CUVs (Trax, Equinox, and Traverse) 2 BOF SUVs (Tahoe, and Suburban), and 2 pick-ups (Colorado and Silverado). The Wrangler can spawn a number of different vehicles and there's just no room for that at Chevy.
Everyone here knows GM will simply never do that. They make $10k+ profit on their big SUVs and they barely differentiate them on the outside...only slightly more on the inside. There's no way they spend the money necessary to do that on a less profitable vehicle.


You missed my point why the Wrangler fighter should be a Chevy. the first reason is that Chevy has much more dealerships. The second reason, Chevrolet can cover the very low end of the that marker and the extremely high end of the market. GMC in my opinion will have to start at the middle of the Wrangler market to justify such a small niche market (niche for GMC not for Jeep obviously)
And to your point about different interiors for the Envoy and Trail Blazer, why wouldn't they do it? They did it with the original models and they couldn't make them fast enough. I think GMC should have their own interiors. The only ones I guess that wouldn't be a problem with sharing is the Trucks, and Large SUV,s (but in my opinion it should only be the trucks, if even that)
 
#55 ·
Clearly GMC is a winner when it comes to making money.

GM is still a bit of a mess at branding for Chevy, Buick, GMC and Cadillac. People advocating for closing GMC generally prefered a two brand Chevy-Cadillac company because they figured GM could handle two brands and introduce lineups that made sense. With four remaining brands the lineups are still a bit messy.

But you are definately right that GMC should have survived and is an asset to GM. Hopefully one they can give a bit more love and attention.
 
#56 ·
I agree that messing with the Acadia's size would be mighty stupid. I could see the argument of moving it upmarket with RWD but if not for that it seems like such a bad idea. I think the strong suit of the Lambdas is the differentiation in style despite being on the same platform. I think it is agreed that the Enclave and Acadia are both very attractive but in their own ways. I don't think that previous Acadia drivers are just going to buy an Enclave for it's size. I could see them drifting towards the Explorer or Highlander instead because they are truck-looking crossovers. I think that the Acadia Denali took buyers from the Enclave but other than that, I think many people knew what they wanted when they walked into a Buick/GMC dealership, so I think the current strategy works. I think GM would be better off trying to make a new Envoy to compete with the Grand Cherokee and Range Rover Sport.
 
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#93 ·
I love my 2011 GMC Acadia. I would hate to see GM screw with the size. If I wanted a smaller vehicle I would have bought a Terrain or Equinox. My thoughts turned exactly to the Explorer as a replacement vehicle. I've never owned a Ford and would never even consider a Toyota or Nissian, but could see a Ford as a future vehicle if GM doesn't do the right thing.
 
#58 ·
I have had GM/Ford BOF Vans in my fathers entertainment company fleet since I was 10 I am now 28. I hate the new Fords and the NV whatever is decent but no Econoline. We currently have an extended GMC Savanna with the works 6.0 v8 and no window slider.

GM needs to get off its azz and get the gen V v8/v6 in the vans with the 6 speed for crying out loud. Slap on the new corporate grilles for Chevy/GMC, Easy step bumper & new tail lights.
Then make a few adjustments to the interior, namely higher quality plastics and a user interface/radio cluster from the 21st century and they can keep the current style going and selling for another 3-4 years!
 
#64 ·
GM is making a huge mistake if they don't bring the Envision here.
It will not step on the butch looking Terrain's toes and it can command more $$ than the high volume Nox.
They also need to do a much better job on the Terrain Denali next time. The current one is a bad joke.
 
#65 ·
GMC has many “holes” to fill in it’s line up to compete with Jeep on a global basis.

The majority of Jeep’s global sales growth over the next 5 years will not be of traditional “Jeep” products like the Wrangler, but of FWD/4WD based vehicles like the Renegade and Cherokee and RWD/4WD Uni-Body vehicles like Grand Cherokee, Grand Wagoneer and a few others not yet on the market. Jeep will broaden it’s product line into trucks with at least two entries, one of which maybe Wrangler based. The next gen Wrangler will be different design than the current one in several ways and Jeep may very well retain the current Wrangler design for global sales giving Jeep two “Wrangler” lineups with up to 5 total variants.

So GMC has many “holes” to fill in it’s line up to compete with Jeep on a global basis and GMC is GM’s only brand capable of countering Jeep since any brand that competes with Jeep must have a certain “Exclusivity” and not make cars.

1. Jimmy/Jim-E vs. Jeep’s “Panda”
2. Granite vs. Renegade
3. Graphyte (Dune Buggy) vs. Jeep’s “Willy’s”
4. Terrain vs. Cherokee – Covered
5. Borrego vs. Compass
6. Safari 2D/4D vs. Wrangler 2D/4D
7. Canyon/Canyon Denali/H3-T vs. Jeep Wrangler Truck
8. Acadia vs. Wagoneer (GMC has product and Jeep will) - Covered
9. Envoy vs. Grand Cherokee
10. Envoy XL vs. Grand Wagoneer
11. Sierra/Sierra Denali/Alpha (Raptor) vs. Jeep Full Size Truck
12. Yukon vs. Jeep’s Full Size SUV (global market too large for Jeep to ignore)

Out of 12 segments GMC has 4 covered with the most lucrative growth segments left wide open to Jeep and several soon to appear competitors.

GMC will also need to expand to counter the several “SUV Brands” that other automakers will create in the next 5-years and don’t be surprised to see Toyota’s “Land Cruiser” brand introduced within 24 months. Anyone who thinks that other automakers will not create an “SUV Brand” to take advantage of this hot new segment that has 20 years of growth ahead of it is a fool.

A global “SUV Brand” can deliver multiple times the revenue that even a “Luxury Brand” can since it’s sales volume that is multiple times higher offsets higher ATP’s of a “Luxury Brand” and a “SUV Brand” can sell entry level all the way to “Premium Luxury”. Additionally a “SUV Brand” can sell high volumes of high margin “Specialty SUV vehicles” that retain high ATP’s due to the Brand’s strength of “Exclusivity”.

GM has a huge advantage over all other automakers outside of FCA since they already have an “SUV Brand” that can sell in high volumes (2 million+) globally if given the product. GM also holds the advantage of being able to share GMC product with Buick/Holden/Opel/Vauxhall within a globally aligned Buick/GMC/Holden/Opel/Vauxhall “Brand” along with being able to share with Cadillac where Cadillac offers high performance “Premium Luxury” vehicles that compete with X3/Macan and X5/Cayenne. GM can even “triple-dip” in “Premium SUV” offerings with Buick/Cadillac/GMC Denali all offering vehicles with the unique DNA of each brand.

GMC can also share product with Chevrolet in the high volume segments with GMC introducing the product to place ATP level high and develop the product. Chevrolet can then offer vehicles at lower price points with a few shared “Niche” products. GM also has the advantage of “quadruple dipping” with these products that can be shared with Buick, Chevrolet, GMC and Holden/Opel/Vauxhall for global sales on one platform.

What exactly is GM waiting for?

No wonder Toyota’s revenue was 54% higher than GM’s last quarter and Toyota’s market cap is $209 Billion to GM’s $58.3 Billion, even Honda is right behind at $57.7 Billion.

That’s OK, Honda and Toyota (and others) will create their own “GMC” and leave GM scrambling once again to play catch-up when they could be the leader all others (including Jeep) are chasing.

Same Old GM.
 
#70 ·
The only hole I see that should be really filed and pushed by GMC at the moment is a smaller BOF SUV based off the Canyon. That if done right could easily be option-able like a wrangler type vehicle, though I think a GMC vs Wrangler isn't a good match up. GMC can have an off-roader but it needs to stay premium. It would be better to let Chevy chase the wrangler I think.
 
#83 ·
“When you look at the portfolio, you start to think, ‘What niches are there?’ You could argue a third (CUV) between the Acadia and Terrain. But there is not much space,” he says.
SUVs/CUVs like the Murano, Edge, or 4Runner suggest otherwise.

But taken as a whole Buick-GMC showroom, it is mostly covered or should be as the next generations of their current models debut.

Yet Buick is doing good and GMC is doing great. Why would they need tons of money dumped in them? Cadillac needs the cash, and it will help the other brands via trickle down effect.
I'd say he's referring less about the brands today, and more about the ~15 years prior. The only thing truly new at Buick in the first half of the '00s was the Rendezvous.

New at Cadillac in 2004-05: SRX, STS, XLR, CTS-V
New at Buick in 2004-05: a redesigned W-body with a 3800, a rehashed 7-year old minivan, a rebodied Envoy/Bravada
New at GMC in 2004-05: ...Canyon? Envoy XUV?
 
#84 ·
SUVs/CUVs like the Murano, Edge, or 4Runner suggest otherwise.

But taken as a whole Buick-GMC showroom, it is mostly covered or should be as the next generations of their current models debut.


I'd say he's referring less about the brands today, and more about the ~15 years prior. The only thing truly new at Buick in the first half of the '00s was the Rendezvous.

New at Cadillac in 2004-05: SRX, STS, XLR, CTS-V
New at Buick in 2004-05: a redesigned W-body with a 3800, a rehashed 7-year old minivan, a rebodied Envoy/Bravada
New at GMC in 2004-05: ...Canyon? Envoy XUV?
The Buick-GMC showroom is full of holes that must be filled if GM is going to maximize profits from these brands.

Buick can add both the Adam and Adam Rocks with GMC offering the similar sized Jimmy aimed at SUV buyers

GMC needs to add the Granite as a SUV shared with the Encore that will attract a different buyer than Encore and Trax.

Terrain will get a bit smaller but still compete with Cherokee and adding the Envision will not impact Equinox, Terrain or SRX sales as all four are aimed at different customers.

Buick needs to add the GTC, 5-Door Astra in FWD and AWD "Cross Country" form along with the Astra Wagon and Astra "Cross Country", all most likely using the Verano name and the Insignia 5-Door Hatch and Wagon in FWD, AWD Sport and AWD "Cross-Country" form can be added to compete with vehilces like Subaru's XV Crosstrek and Outback.

GMC needs both a Wrangler and Grand Cherokee competitor along with a new H3, the former (Safari) based on the Canyon and latter (Envoy) a new model from Omega or other premium uni-body architecture shared with Cadillac's Macan and Cayenne competitors. These vehicles can be sold globally along with the smaller Jimmy, Granite, Terrain and Acadia models so that GMC can match Jeep's 1 million in global sales.

GM had better get moving since there are at least three other automakers close to introducing their own Jeep brands to take full advantage of this new highly profitable segment. We will see a entirely different response after Toyota unveils its Land Cruiser Brand as it did with Lexus brand to take full advantage of the Luxury segment and invested in Subaru to increase profits from a niche "lifestyle" brand.

There are far more than just "Volume" and "Luxury" segments in the global markets and the one with the fewest competitors is the "SUV Lifestyle" with Jeep the sole global competitor. Jeep's 1 million in sales volumes has the attention of the competition since it proves there are billions of untapped revenue in volume SUV Lifestyle sales and that attention will foster the creation of entirely new SUV Lifestyle brands - GM has one it can compete with today and it needs to start feeding it. Of course GM will play catch-up once again and spend 10X the money needed to start today when it reacts to the new segment 10 to 25 years from now and other automakers have banked hundreds of billions in revenue and tens of billions in profit from it. Only way to make the big money in this segment is with high ATP volume that GMC has a proven history of providing and global sales of GMC "SUV Lifestlye" vehicles will provide the cash and sales volume for Cadillac to properly establish its Luxury products while GM "double-dips" in high margin sales.
 
#88 ·
I have the utmost confidence in Buick , the benchmark for the company !! Personally I think Buick is the only division that has the balls to take on the Ford Edge and Lincoln MKX . Those two models will eat up the lion's share of new crossover sales and popularity . They are wider and create a more spacious interior feel plus a quality understated exterior. They again offer that hot SPORT model with engine and handling , to bring in the more youthful buyer . GM , you are still out of your league , with the big boys here ......turn Buick loose to get the job done . You have no problem allowing Cadillac to spend a fortune on their no name brand . It's time to get smart and shake up the tree .....soon !!
 
#90 ·
I've got a 2011 GMC Acadia with almost 70,000 miles on it. I was planning on driving it another 3 - 4 years. I certainly hope that GM doesn't screw with the Acadia in terms of size. It is really a prefect size vehicle for what I do with it. It was a replacement to my second Tahoe. I have loved every minute I spent behind the wheel. It is smooth, handles well and hauls a lot of groceries. If I need towing capability, like for my camper, that's what I have my 2500HD Duramax/Allison equipped Silverado for. Other than that, I enjoy the ride and comfort of the Acadia for everyday travel. I almost always have the 3rd row folded down for carrying groceries and merchandise and we've only used the 3rd seat maybe a dozen times. Not everyone wants the cheaper looking Chevrolet Traverse or the ultra plush looking Buick Enclave. I've always owned GM except for my Jeep Wrangler, but if GM fools with the size/options on the Acadia too much, it may find me at the Ford dealer looking at an Explorer next time. Living near the GM Delta Township plant where the 3 Lambda vehicles are produced and seeing the number of them leaving everyday on the Jack Cooper Transportation trucks, GM needs to have their head examined if they screw with the overall size of these vehicles. Refresh or redesign it if you wish, but don't screw with the size or features.
 
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