GM’s Mid-Size Truck Gamble Pays Off
Dealers also happy with 12 days' inventory
General Motors’ new mid-size trucks have had their doubting Thomases, but the results are in and consumers are buying them almost as fast as they can be built.
Critics said they were too close in size to their larger siblings and that they were too closely priced as well. But with the average Canyon/Colorado sitting on lots for a mere 12 days, it’s apparent customers are lining up and GM’s “gamble” is paying off.
“All of our customer research, clinics, focus groups, etc. said there was still a strong market for mid-size trucks, and there is,” said Tom Wilkinson of Chevrolet Communications in an interview with GMI. "Not only are our trucks selling well, but the buzz around them is boosting the whole mid-size truck segment, which has grown 50% so far this year.”
According to Automotive News, the trucks’ popularity has led GM’s Wentzville, MO truck plant to pare down an unpaid lunch break so workers can build more Colorado/Canyon pickups (plus Chevy/GMC commercial vans) to satisfy market demand. That works out to an extra 18 minutes of production in a three-shift day, or 3,500 more trucks for the year. Additionally, since adding a third shift in March, GM is looking to hire a thousand “flex” workers for the Saturday/Sunday shifts, which could expand production by another 24,000 units.
“People often say, 'Why can't you ramp it up more quickly?' The issue is it's a cyclical business. So you're always balancing for the bottom of the cycle as well as the top,” said GM North America President Alan Batey in an interview with AN.
For Motor Trend’s “Truck of the Year” competition, both a $23,300 extended cab work truck and a $36,210 Z71 crew cab Colorados were put through the paces before being awarded top honors for 2015. "For a very basic offering, it doesn't feel that cheap. There are almost no button blanks or other obvious signs of cost cutting, aside from the wide bezel on the tiny screen,” MT said of the work truck.
Yet it wasn’t too long ago that compact and mid-size pickups were all over U.S. roads - according to Motor Trend, there were 11 in the U.S. market at its peak - but the Colorado/Canyon were discontinued in 2012 after a long production run. Along with the Ford Ranger and Dodge Dakota being axed, the U.S. market has been left to Japanese stalwarts like the Toyota Tacoma and Nissan Frontier . . . till now.
General Motors’ efforts are paying off in other ways too, with 43 percent of buyers being new to GM. However, all this can’t last forever. Toyota just unveiled the new Hilux pickup (which can be expected to hit the U.S. in Tacoma duds), and even Hyundai may be getting in on the act with a light-duty pickup based on the Santa Cruz Concept. Dodge has said it has no plans to bring back the Dakota at this time, while Ford fans continue to lament that the Ranger is available around the world but not in the U.S.
“We expect that the new Tacoma will just further fuel the market,” adds Wilkinson. "Based on what we have seen of the new Tacoma so far, we expect to do very well against it, especially with our new diesel this fall. As for Hyundai, time will tell. Our experience is that mid-size truck customers want a real truck – they just want a truck that works better in city and suburban driving. Car or crossover-based pickups have tended not to do well in this market.* Ridgeline peaked early, and despite great reviews from leading consumer publication, sales sagged. If Hyundai does the new entry, I’d expect it to pull customers from import crossovers and cars, so it would be a net gain for the truck segment.”
“The overall truck market remains strong, and the segments of the economy that support truck sales continue to do well.”