mmarshall

VS.................



When GM was reorganized in 2009, one of the major decisions the corporation had to face was which divisions to shed and which to keep. As we all know, Saturn, Pontiac, Hummer, and Saab were discontinued, and Chevy, Buick, GMC, and Cadillac remained. I won't get into the other divisions here (as we discuss them enough in Car Chat as it is)......but I think an interesting question that merits discussion is why Chevy Trucks and the GMC truck division were both left in the same corporate structure. While it is true that at Ford (arguably GM's chief rival), Ford and Lincoln trucks and SUVs from the same platform are sold under two different divisions (Escape/MKC, Explorer/MKX, Expedition/Navigator), at GM, it sometimes goes even further....perhaps (?) into unneeded redundance. GMC currently exists as a whole division within the GM corporate structure, yet, unlike the other GM divisions, sells virtually nothing else but essentially rebadged, mildly upscale Chevy trucks and SUVs...and, in some cases, with Buick and Cadillac selling even more versions, as with the Escalade. That is a major difference from Ford, which doesn't have a true equivalent to the GMC division, and probably doesn't need one (that's one of several reasons why they got rid of Mercury....selling too many Ford rebadges, including the Mercury SUVs).

IMO, having Chevy selling trucks and SUVs on the low end, with Buick and Cadillac handling the upscale versions (as Ford does with Ford and Lincoln) makes sense...........I simply see no need for a separate GMC truck division (which is costing the corporation big money) that exists for no other purpose than to sell cloned, upscale Chevy trucks. Unlike the other three GM divisions, GMC doesn't sell anything else.....no sedans, no coupes, no convertibles, no electric vehicles, no sports cars, no nothing but upscale Chevy trucks. Not only that, but, as it is currently set up, Chevy Trucks and GMC are probably robbing sales from each other, instead of from the Ford and Dodge Ram lines....which should be their goal.

What do you all think? Is GM wasting money and efforts with the GMC division? Discuss.

Joeb427

iTrader: (1)

I think the GMC division is a waste of money.

TangoRed

Actually, GM found out that GMC is actually profitable, especially the Denali line. And as they found out with Pontiac and Oldsmobile, just because you shutter one brand under the corporate umbrella doesn't mean they'll by another GM brand car, no matter how similar it is.

Why throw away money?

tex2670

I just don't understand it--and I never have. Don't forget, until the late 90s, the Chevy and GMC big SUVs were both called "Suburban".

There's just so much that can be justified by "brand loyalty"; in this day and age, are there that many people that ONLY buy Chevy or GMC, that if you merged the 2 into a single brand, that they'd lose customers.

Dodge created the Ram brand for its trucks not that long ago. I'd think that GM would eliminate "Chevy" trucks, and make them all GMC. That way, you could sell trucks at any branded GM dealer. The Buick/GMC locations wouldn't have to become "Buick/Chevy (Truck Only)".

It must not cost them as much as we all think, or else the corporate bean counters would have made this move a long time ago.

Toys4RJill

Deleting GMC Trucks and body on frame SUVs would be a horrible, horrible, horrible decision. General Motors has not been able to earn the respect in the small car, family car or luxury sedan market. What works for GM is their large trucks and SUVs. No matter what, this segment is where the foreign brands such as Toyota and Nissan have had a very hard time to crack. Whereas Toyota/Honda has a reputation for their small and mid size car lines, GM has their respect with their trucks. That being said, the Acadias, and Terrain junk makes no difference if they live on or not.

mmarshall

GMC, I believe, wanted to go upscale, so they adopted the Yukon XL name for their version of the Suburban.


Actually, that's a thought. But, in the end, it would still leave the corporation with four instead of three divisions.

Although they are more careful with their funds now than they were before the buyout, GM is not known for managing their budget well....or for making good marketing decisions. Even today, you can't always rely on them to make sensible decisions.....in the Buick line, for example, they decided to keep the slow-selling Regal sedan in the American market and dump the better-selling Verano. Then they redesign the Lacrosse for 2017 (which sells heavily to seniors).....and install a complex E-shifter that even a sharp young adult in his or her 20s would have problems adjusting to. So, IMO, one could not necessarily depend on them to accurately assess whether GMC division is being run well.

mmarshall

I wasn't suggesting dumping the big full-frame trucks and SUVs......simply consolidating the Chevy and GMC trucks and SUVs into one nameplate. IMO, it would make more sense to do that under the Chevy name than GMC, because that would leave the corporation with three instead of four divisions.

Well, large BOF (body-on-frame) trucks and SUVs have always been quite profitable...Ford and GM both make a hefty profit on each one sold. But, unless I am just missing something (and, yes, I've been known to do that LOL)......I fail to see how that makes the entire GMC division profitable, considering that GMC's line-up ranges from the small Terrain to the extra-large Yukon XL

Sulu

I thought that GM should have gotten rid of the Buick brand also. If the Chinese like Buick, keep it as a Chinese-only brand but not in North America.

That's what I was thinking. With GMC and Chevy Trucks together, GM has a shot at top-selling vehicle with the Silverado/Sierra (in competition with Ford's F-Truck line) but if GMC was killed off, would they still sell the same total number as Chevy trucks?

mmarshall

Buick, in America, not only has a very loyal following with seniors and traditional buyers, but, in the last several years, has also been successful in lowering its average-buying age and attracting new customers, especially with the Encore and Enclave. The Encore has been extremely successful, has a good reliability record, and is arguably the main reason why the Verano was taken out of the American market this year....to free up factory space to build more Encores. Buick also benefited from GM's canning of Oldsmobile over 10 years ago....many of those former Olds customers switched to Buick (it is less clear with Pontiac's canning). If Buick is canned here in America, with Ford having canned Mercury, those customers will have no other place to go....except maybe (?) to the Chrysler 300 and 200....and even the 200 is being dropped.

tex2670

The existence of the Acadia and Terrain are of great importance--the lackluster execution is what has caused those models to be non-factors in each category.

swajames

GMC tends to sell more of the higher trim levels such as SLT and in particular Denali. I'd expect it to be more profitable on a unit basis than Chevy for like-model trucks and SUVs. There is also brand loyalty to consider. The trucks may be substantially similar but GMC has an easier time selling higher trim (and thus more profitable) trucks than Chevy would. I don't think GMC is going anytime soon and nor should it.

TangoRed

They're getting additional sales from each GMC model that generates profit above what the platform engineering costs. The best part is their transaction prices are higher than the Chevy equivalent. Here's an srticle
on the subject: http://www.autonews.com/article/2014...mc-flying-high

tex2670

Of course it is, because Chevy doesn't have an "equivalent" trim level to Denali. That's like saying that Escalade transaction prices are more than Yukon/Tahoe/Suburban.

If GM consolidated Chevy and GMC trucks under GMC's brand, they could still keep the range of trim levels from the entry level Chevy, all the way up to the Denali.

TangoRed

You're assuming that the higher transaction prices only occur on Denali models and that Chevrolet buyers would automatically move over to the GMC brand, which they know isn't the case. Definitely not logical, but it is what it is. Sales would be undoubtedly higher keeping them separate.

tex2670

True--I am making that assumption. But those customers are loyalists, and presumably always replace their Chevy with a new Chevy. If Chevy truck goes away, I would *think* they would be much more likely to move to GMC then Ram or Ford or Nissan or Toyota. Maybe not every one of them, but a vast majority.