5 Things We Learned about GM’s Truck Strategy

No matter how you look at it, trucks are a big part of General Motors. Chevrolet and GMC full-size pickups are consistently among the company’s top-selling vehicles, and GM’s full-size, truck-based SUVs dominate the large utility segment. But the U.S. truck market is an extremely competitive one, with Ford, Chrysler, and GM constantly making improvements to one-up the competition in terms of capability, refinement, and fuel economy. At a launch event for the 2015 Chevrolet and GMC full-size SUVs, we talked to key members of GM’s truck team to hear more about what the company’s truck strategy will look like going forward.

New transmissions to come

All of GM’s current full-size pickups and SUVs are equipped with six-speed automatic transmissions. Expect this to change soon, as GM Chief Executive Engineer for full-size and midsize trucks Jeff Luke told us to “stay tuned” for news about future eight- and nine-speed transmissions. While the Aisin-developed eight-speed automatic found in the 2014 Cadillac CTS and 2015 Chevrolet Corvette is one possible choice for implementation sooner rather than later, that transmission may be too expensive for a large-volume application like the full-size trucks and SUVs. More likely to find a home in these trucks are the nine- and ten-speed transmissions currently being co-developed by GM and Ford for use as soon as 2017. These more advanced transmissions will presumably bring higher fuel economy numbers to better compete with the Ram 1500, which currently offers an eight-speed automatic for V-6, V-8, and diesel models.

Diesel is a possibility

Ram was the first to put a diesel engine in a light-duty pickup with the Ram 1500 EcoDiesel, and Luke said bringing a diesel to 1500 versions of the Silverado and Sierra is currently under consideration. “We are looking at the diesel market and exploring all options for what will happen next,” Luke said. One rumor is that this upcoming light-duty diesel engine could be a 4.5-liter V-8. Given the Ram diesel’s impressive 28 mpg highway rating, Luke acknowledged that the efficiency benchmark is consistently rising for this segment, and said that improvements are in the works to meet rising CAFE emissions standards as well. Luke also mentioned the possibility of start-stop technology and significant weight loss as other important factors for improving fuel economy going forward.

High-trim models are important

When the redesigned 2014 Chevrolet Silverado and GMC Sierra pickups went on sale last year, GM was surprised to see top-trim LTZ, High Country, SLT and Denali models making up a significant portion of the light-duty truck sales mix. LTZ and High Country trims make up 27 percent of all Silverado sales so far in 2014, and the pricey GMC Sierra SLT and Denali models make up 48 percent of that truck’s mix. Average retail transaction prices are also up for Q1 2014, as retail buyers paid an average of $36,431 for the Silverado and a lofty $39,173 for the Sierra. With similar demand so far for higher-trim versions of the 2015 full-size SUVs, GM now hopes to maintain this high level of demand for expensive trucks in the heavy-duty sphere, as it is introducing a High Country version for the 2015 Chevrolet Silverado HD lineup.

Bringing more buyers into crew-cab, higher cost, luxury-oriented full-size pickups also leaves more room at the lower end of the truck market for the mid-size 2015 Chevrolet Colorado and GMC Canyon models. One concern for these smaller trucks is whether they will be priced far enough below the full-sizers to entice buyers away from the enhanced capability of the Silverado and Sierra, but with transaction prices rising for the full-size trucks, this becomes less of an issue.

Full-size SUVs still matter

Although the crossover market continues to grow, Chevrolet and GMC are showing no signs of slowing down with the new generation of truck-based, full-size SUVs. That’s because GM has a huge 74 percent market share of the large utility segment, meaning that it can’t afford to abandon this loyal consumer base. These trucks bring in huge profits for the company, and GM brags that its full-size Chevrolet and GMC SUV business would be large enough to qualify as a Fortune 400 company if it were a standalone entity.

After going on sale in February, the Chevrolet and GMC SUVs have sold well so far this year. In April 2014, the GMC Yukon was the biggest gainer over this time last year, with 3,733 units sold, an increase of 136.7 percent. The Chevrolet Suburban was also up in April, with a 31.5 percent increase to 4,840 sales. Combined 2014 year-to-date sales of the Chevrolet Tahoe, Chevrolet Suburban, GMC Yukon, and GMC Yukon XL total 53,460 units, completely dominating the next-best competitor, the Ford Expedition, which has sold just 12,453 units so far in 2014.

New midsize trucks could shake up segment

Although the midsize truck segment has not been growing sales-wise, GM is hoping that its new trucks, the 2015 Chevrolet Colorado and GMC Canyon, will help revive this class of trucks that has not seen much action lately. GM Vice President of Truck Strategy Rick Scheidt says that because the average midsize truck (a segment including the Toyota Tacoma and Nissan Frontier) is ten years old, GM’s fresh entries could attract buyers back into this segment that abandoned midsize trucks in favor of full-size trucks or other SUV models. Luke also pointed out that the other domestic truck brands, Ram and Ford, do not compete in this segment, meaning that the Colorado and Canyon could gain some conquest sales from older Dodge Dakota and Ford Ranger owners looking to upgrade.

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