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GM line of trucks looking outdated
Big incentives on tap to hang onto customers
June 9, 2004
JEFFREY MCCRACKEN
DETROIT FREE PRESS
The country's largest and most important vehicle line is starting to show its age, and the implications are a bit scary for GM, its workers and largest suppliers.
General Motors Corp. has relied for years on its full-size trucks to generate billions in sales and profits, with hits ranging from the Hummer H2 to the popular Chevrolet Silverado pickup. The lineup was so dominant it forced every other automaker to improve their trucks or prop them up with profit-eating rebates.
However, the lineup is now six years old -- nearly ancient in today's ultra-competitive auto industry, where the first few years for a new vehicle are like the first few weeks at the box office of a Hollywood movie -- that's where the big money is.
Tellingly, GM now needs vastly larger rebates to lure consumers to these trucks, which are taking longer to sell and piling up on dealer lots across the country. Auto experts note that GM will not replace this lineup until 2006 and 2007, so GM still has another two years or more with this suddenly aging line.
"This is a truck lineup that has peaked. It's now long in the tooth, and that is hurting it. It's viewed by the industry trade pubs as just a good lineup, not a great one anymore," said Robert Hinchliffe, who studies the auto industry for the Wall Street firm of UBS Inc. To his point, a July Consumer Reports' study ranked the Chevy Silverado fifth out of six big pickup trucks. In another study, Edmunds.com ranked the Silverado last.
"It's definitely something to keep an eye on. It's their most-important lineup, and now they need incentives where they didn't before," said Hinchliffe.
For nearly five years, this truck line was an industry star, with seven GM factories working overtime to feed fevered consumer demand for big pickups and SUVs.
Ford unveiled its new F-series line of pickups last summer, shortly after Chrysler rolled out its Dodge Ram. Nissan introduced the full-size Titan in late 2003. All of them have sliced into GM's dominance in full-size pickup trucks.
Incentives such as cash rebates on the Silverado jumped from $1,893 per vehicle in April 2002 to $3,453 in April 2004, according to the vehicle-pricing site www.Edmunds.com. The Silverado is now sitting unsold on dealer lots for an average of 68 days, compared to 47 days two years ago.
"The GMT-800 has been an outstanding lineup for GM, but there is no doubt it is getting dated. Ford, with its new truck, and even the Ram, to some extent, have made GM's lineup look dated," said Michael Robinet, vice president of global forecasting services for CSM Worldwide, the Farmington Hills-based auto-research firm.
It also covered holes in GM's struggling car lineup, where GM has continued to lose market share to foreign automakers like Toyota and Hyundai. With the GMT-800 getting older, pressure mounts on new GM cars like the Chevrolet Cobalt and Pontiac G6 to be big hits. Both are brand-new models from GM that go on sale later this year.
GM will roll out its replacement for the GMT-800 in late 2006 and early 2007, according to GM insiders and auto experts. The next generation, called the GMT-900 program, will start from GM's truck plant in Janesville, Wis.
Full Article Here
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Big incentives on tap to hang onto customers
June 9, 2004
JEFFREY MCCRACKEN
DETROIT FREE PRESS
The country's largest and most important vehicle line is starting to show its age, and the implications are a bit scary for GM, its workers and largest suppliers.
General Motors Corp. has relied for years on its full-size trucks to generate billions in sales and profits, with hits ranging from the Hummer H2 to the popular Chevrolet Silverado pickup. The lineup was so dominant it forced every other automaker to improve their trucks or prop them up with profit-eating rebates.
However, the lineup is now six years old -- nearly ancient in today's ultra-competitive auto industry, where the first few years for a new vehicle are like the first few weeks at the box office of a Hollywood movie -- that's where the big money is.
Tellingly, GM now needs vastly larger rebates to lure consumers to these trucks, which are taking longer to sell and piling up on dealer lots across the country. Auto experts note that GM will not replace this lineup until 2006 and 2007, so GM still has another two years or more with this suddenly aging line.
"This is a truck lineup that has peaked. It's now long in the tooth, and that is hurting it. It's viewed by the industry trade pubs as just a good lineup, not a great one anymore," said Robert Hinchliffe, who studies the auto industry for the Wall Street firm of UBS Inc. To his point, a July Consumer Reports' study ranked the Chevy Silverado fifth out of six big pickup trucks. In another study, Edmunds.com ranked the Silverado last.
"It's definitely something to keep an eye on. It's their most-important lineup, and now they need incentives where they didn't before," said Hinchliffe.
For nearly five years, this truck line was an industry star, with seven GM factories working overtime to feed fevered consumer demand for big pickups and SUVs.
Ford unveiled its new F-series line of pickups last summer, shortly after Chrysler rolled out its Dodge Ram. Nissan introduced the full-size Titan in late 2003. All of them have sliced into GM's dominance in full-size pickup trucks.
Incentives such as cash rebates on the Silverado jumped from $1,893 per vehicle in April 2002 to $3,453 in April 2004, according to the vehicle-pricing site www.Edmunds.com. The Silverado is now sitting unsold on dealer lots for an average of 68 days, compared to 47 days two years ago.
"The GMT-800 has been an outstanding lineup for GM, but there is no doubt it is getting dated. Ford, with its new truck, and even the Ram, to some extent, have made GM's lineup look dated," said Michael Robinet, vice president of global forecasting services for CSM Worldwide, the Farmington Hills-based auto-research firm.
It also covered holes in GM's struggling car lineup, where GM has continued to lose market share to foreign automakers like Toyota and Hyundai. With the GMT-800 getting older, pressure mounts on new GM cars like the Chevrolet Cobalt and Pontiac G6 to be big hits. Both are brand-new models from GM that go on sale later this year.
GM will roll out its replacement for the GMT-800 in late 2006 and early 2007, according to GM insiders and auto experts. The next generation, called the GMT-900 program, will start from GM's truck plant in Janesville, Wis.
Full Article Here
