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GM’s Mid-Size Truck Gamble Pays Off

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#1 ·

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.”
 
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#5 ·
GM and most of the auto industry manufacture sedans and SUV/CUVs in almost every size imaginable. It was completely unrealistic to pretend Pickups were fine as one size fits all product.

The midsize GM trucks are an excellent addition to the market and more choices should be available including smaller pickups or utes. I'm sure plenty of people want an S-10 size truck but are happy they now have a good domestic choice somewhat smaller then the full size trucks. If a smaller pickup or Ute was available, it might sell really well too.
 
#10 ·
Am I the only one that things the Tacoma front looks like a smashed up face?

On a side note, my Wife desparatly wants a new Colorado to replace her 05 (which has been flawless for 10 years), Think I will have to oblige in the near future, perhaps when there is some invantory to look at!
 
#29 ·
I'm VERY excited for the Canyon Denali. GM will be creating a whole new segment and I think it will sell well like all Denalis do. I know I'll probably be wanting one!

When I worked at a GMC dealership and the Canyon was no longer available (2014, I believe) people that traded in Canyons and Colorados (that they had purchased new) often went to the Terrain or Acadia and not the Sierra -- so it never made sense to me that midsizers couldn't exist just because they were close in price to the fullsizers, as Ford insists. I think in most cases they're different customers and size not price is what matters. Kudos to GM for sticking with the market instead of ditching it and leaving it to the Tacoma and Frontier.
 
#30 ·
While I mostly understand Ford's decision to skip the Ranger in the US (at least for this generation) to focus on the new F-150, GM made a rare (for them) gutsy decision, and are reaping the rewards. If I were back in Canada and choosing a pickup it's be one of these, I wouldn't even consider anything else.
 
#46 · (Edited)
This goes along with what I was thinking. These along with the larger ones seem to be the "passenger" vehicle of choice for a lot of people. That said, the size just makes sense. I'm glad they are successful and proving certain people wrong. I have a tendency to think that this is not a "just new now" phenomenon and the sales success will continue.
 
#33 · (Edited)
The volume they bring will depend to a large degree - or better said perhaps, on how GM wants to play them.

It really is not like the old days when it was little trucks versus big trucks while the economy was artificially pumped up yet again - while being hollowed out and fuel prices were - oh wait....

If they can continue to keep them viable against various groups of CUVs then.... lottsa' blue sky to try and operate in - and grab a piece of.

This is where GM out thought - either on purpose or not - the others as in all the others.

Related, conventional Cars in and around thses price bands are going to continue to lose appeal - and much of that can't be changed in practical terms.

If the Camaro and Mustang teams get to do the side glass and backseats for other product, that will accelerate even faster.....oops, I digress.

Get some PT action going...... and they may be able to do better ( again ) than one might think .........against many fwd CUV product.

It is beyond flat out ****in' amazing .... in a really bad way...... that doesn't 'seem' to matter although it really er - yet, except of course, for Ford and Mopar..... that all of GM's PUs across the line do not have an 8Lxx of some sort.

'That' and a happy marriage is a big part of the 6.2s appeal...... the same sort of 8Lxx availability would likely do as much or more - a lot more if brought to all other prime movers in use regardless of truck size. I'm talking basic, total, net sales appeal......

Ford can be really really, happy it is not so.....
 
#34 · (Edited)
Why oh why, didn't GM make that 8-speed available on 4.3 and 5.3 in trucks Utes and Vans?
Maybe all those Cadillac funding dollars are mounting up....

Maybe we all are over thinking the PT Joint Venture, maybe the 8Lxx is enough for both partners?
Especially if it's price is way less than the equivalent ZF offering....

The biggest handbrakes on FCA at the moment is $5 billion loan coming due for refinance and Sergio's deluded dreams of resurrecting Fiat's European brands using FC NA profits to do it.
Other than that, FC NA could have afforded to do much more across the board..


Ford eliminates so much production capacity that its now almost impossible to increase production further at any of its plants, (save one or two) more F150 and SD truck production
is probably at the point of requiring an extra plant - I doubt they will consider that and instead
continue boasting about maximized efficiency - another reason we won't be seeing Ranger/Everest.
 
#35 ·
That first, about the 8s, makes no sense at all.

Cadillac first and then the trucks / rwd SUVs..... gee, did I just skip over Corvette ?

Good, I did.

The second is 'imo' more than a cheap shot. Europe has been a disaster of one type or another for virtually all OEMs although superficially it may not seem so.

FCA 's real financial weakness is or was...... did not get as much out of China as many others plus a greater Euro centrism than GM or Ford or Toyota, Honda, etc.

Btw, you take out the US / NA Pick Ups for all three just who exactly splatters on the wall first ?

There is no Jeep story @ GM and Ford - or anywhere else basically.

FCA has outsold Ford CUVs / SUVs how many months so far ?

FCA continues to make real headway in Cali, while Ford is giving it all back faster than they got it and GM also nets an AFU although different and less disturbing than Ford's.

Finally, I find literally nothing more appealing @ Ford as far as long term debt + unfunded liabilities go versus FCA.

Quite the opposite although that depends on how you want to model forward.


Given how all the numbers go across the globe, everything basically hinges on the new F series - now more than ever in a sense.


Finally, although their stories are of course different.... I'm concerned .... for all three going forward.

That's a big part of what SM is all about...... to his credit, not pretending that external factors of the peculiar sort are out there - unlike some ( many ) others.
 
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#36 · (Edited)
The second is 'imo' more than a cheap shot. Europe has been a disaster of one type or another for virtually all OEMs although superficially it may not seem so.

FCA 's real financial weakness is or was...... did not get as much out of China as many others plus a greater Euro centrism than GM or Ford or Toyota, Honda, etc.

Btw, you take out the US / NA Pick Ups for all three just who exactly splatters on the wall first ?

There is no Jeep story @ GM and Ford - or anywhere else basically.

FCA has outsold Ford CUVs / SUVs how many months so far ?
Where's all the profit?
FCA is arguably the worst financial performer of the three in Nth America.
There's a lot of internal debt at FCA you're not seeing, a big syphon sucking out cash,
just as it always has been in the last decade...

You're right, Ford doesn't have a Jeep, nor does it sell anywhere near as many large Utilities as Chrysler
and GM but then turns around and outperforms both on profit quarter after quarter, especially when it
comes to selling far less vehicles than GM.

But we're off track here, so kudos to GM for finding another niche

and kudos to Ford for bringing Transit and maintaining majority % in the Van sector
just like they do in the HD truck sector, know your customers and listen to them.

Unfortunately, the old Detroit paradigm of maximized sales = maximized profit no longer works,
something in the machinery at FCA and GM is broken, although GM has the Volume to overcome
some of the lead sinkers it wears.
 
#37 ·
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.

This is surely good news, tho I'd say it was hardly a gamble ... & not sure why they had "doubters" in the 1st place.


Cort :) www.oldcarsstronghearts.com
1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve
"Come along and share the good times while we can" __ Lynn Anderson __ 'Rose Garden'
 
#47 ·
1) In 2004 C/C sold 144,600 (12,050/month) in 2005 C/C sold 163,200 (13,600/month) in 2006 C/C sold 117,800 (9,800/month) 2007 C/C sold 95,500 (7,960/month)

2) Picture is worth 1,000 words, unfortunately this needs many more for a complete answer............

GM is sacrificing van volume, with that business being mostly fleet/commercial, while probably not overly profitable, considering the product and amortizations, still very profitable.

Then even if they weren't going to buy a Silverado or Sierra, most were likely to buy another GM, and based on the conquest list, many of them very profitably, lets hope it leads to GM piece of the pie growing, and not just the sizes of each of GM's pieces.


 
#44 ·
Not at all surprised. Good product sells and a high percentage of trucks are sold for recreation, not for work. If you live in an urban area, you know parking spots are smaller and a more compact vehicle is easier to get around in.

Only downside is I was hoping for some incentives to buy one myself. Probably not happening anytime soon.
 
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