By on May 4, 2011

With all the excitement brewing in the Compact segment, some may be ignoring a building problem at the other end of the market, in the full-sized truck segment. Automotive News [sub] reports that GM’s truck inventory currently stands at 111 days of surprise, or a whopping 275,000 trucks sitting on lots. In April, Silverado was more than 3,000 units off the previous month’s pace, while Sierra was just over 1,00 units off. GM’s US market boss Mark Reuss tells the industry paper

We’re going to do something about it, but we haven’t made those calls yet… no one month makes a trend, so we’ve got to see where this one holds

Meanwhile, we’d be more worried about Chrysler, which saw Ram sales drop from nearly 22k units in March to 17,680 units in April. And not only is Chrysler more dependent on truck profits than GM due to its tighter balance sheet, it also has fewer high-efficiency alternatives to offer consumers who seem to be slowly responding to rising gas prices and moving towards more efficient offerings. And given that Automotive News [sub] is already noting that Chrysler has fallen behind on its “ambitious” sales goal and quoting analysts bemoaning Chrysler’s “perception” issues, it seems that Auburn Hills should be trying to get ahead of the story the way GM is.

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32 Comments on “April Sales: GM Considers Truck Cutback...”


  • avatar
    Scoutdude

    With 111 days worth of inventory GM better cut production as that takes us into the traditional new vehicle intro time of year. Chevy doesn’t stand a chance to take the claim as best selling so it doesn’t make sense to build a bunch more and then have to discount them heavily.

    • 0 avatar
      SVX pearlie

      *All* of the big truck makers should be cutting back – the issue isn’t confined to GM, although GM headlines the bad news at TTAC.

      As usual, GM (combined Sierra, Silvie & Avalance, etc.) and Ford (combined 150, 250, etc) are neck-and-neck in volume. So if GM has a slowdown, so does Ford.

      As others note, it’s a fundamental of $4+ gas (soon to hit $4.50 here in SoCal), so those all those tiny women driving their giant, empty-bed F150s or other giant trucks for mere grocery-getting and spa runs will be downsizing to something less thirsty.

  • avatar
    Rod Panhard

    That’s not a surprise. Last time I looked the price of gasoline was near $4 per gallon. When the price of gasoline goes up, the volume of sales of trucks and SUVs goes down. That’s a bitch, too, because that’s where the profit margins can be found.

  • avatar
    GarbageMotorsCo.

    You couldn’t pay me to drive a Gov. Motors truck again. Not even if you gave me my own personal wrecker to follow me around waiting for the next ride to the dealership to replace another Intermediate Steering shaft or rear diff.

    Never again.

    • 0 avatar
      mike978

      Government Motors – who is that? A clever play on GM. The Government is a minority owner. I assume with you aversion to any Government involvement or help in auto companies that you do not buy VW or Toyota products.

    • 0 avatar
      Zackman

      If you don’t like GM, don’t buy one! Why all the hate? Nobody is forcing anyone to buy a particular product. Besides, the “Gov’t Motors” thing is tired and over-played. Just because I drive an Impala doesn’t mean I’m a GM fanboy, it just happens to be made by GM and I do have a history of loving Chevys. I also like some Fords, Chryslers and, (gulp!) Kias and Nissans!

    • 0 avatar
      jaje

      Is there an ignore button for those with little to no insight and only an agenda.

    • 0 avatar
      CJinSD

      Don’t worry GarbageMotorsCo . You still get to pay for GM trucks, even if you don’t buy or drive one.

  • avatar
    PenguinBoy

    At what point does Nissan cut their losses and exit the full size truck market?

    Here in Western Canada they have about $12k on the hood of the Titan right now – and they still don’t seem to sell.

    The sales numbers in the US seem underwhelming as well, to say the least.

  • avatar
    mike978

    It could be pointed out that GM increased their April sales by 23% and yet their truck sales were essentially flat. So all their growth came from cars/SUV’s – pretty good especially as some like to keep complaining about GM (and the other domestics) being dependent upon trucks. The data speaks for itself.

  • avatar
    Steven02

    2 reasons for the slumping sales. Gas prices are high and Ford has a newer model out with better engines right now. Right now, the F150 is better than the Silverado. When GM updates it, it will greatly help. But, with gas prices not going down, the truck segment is going to have problems.

    Looking at sales, I am wondering why Nissan and Toyota go into the full size truck business.

    • 0 avatar
      MikeAR

      Toyota did because they wanted to have more sales than GM worldwide and they thought they needed a product in every catagory. Nissan was just following along. It’s kind of a shame too, the Titan looks a little smaller than the other half tons but I don’t think it gets any better mileage.

      • 0 avatar
        CJinSD

        I knew an early Titan adopter. He towed his boat with it a couple times and went back to driving Silverados. The Nissan returned mid single digit gas mileage while towing compared to low double digits for the Chevy. He liked everything else about the Titan more, but couldn’t stomach the mileage. I can’t help but to wonder how much more he lost trading in a truck he had less than a year than he would have spent on gas towing a boat in a truck he preferred. What he really should have done was found out what kind of mileage the newly released Titan returned while towing, even if it meant waiting for it to be a proven concept. Stupid people and their money… Even money says he’s got an F150 turbo now.

      • 0 avatar
        Scoutdude

        The Titan has always been at the bottom of the MPG rankings for full size trucks, even worse than the worst Dodge sunk to and the Toyota.

      • 0 avatar
        SVX pearlie

        Toyota likes to talk about how they’re a “full line” manufacturer, as a dig at HKia for not selling pickups.

        Has nothing to do with how good their trucks are.

        I got into it with a Toyota fan the other day. He was going on about how the Tundra would last and last. I said, doesn’t matter if it can’t get a real Heavy Duty / Super Duty job done — when the Tundra can pull 15k lbs and not break, then you can talk about how great the truck is. Otherwise, it’s exclusively GM & Ford.

  • avatar
    getacargetacheck

    Now would be a good time for GM to ditch GMC. Use the saved ad dollars to promote the Silverado, and then add a couple of crossovers to Buick’s lineup to soften the blow to Buick/GMC dealers. Better yet, merge the Buick and Cadillac channel. Wonder if dropping Ram from Dodge is creating confusion and, hence, falling sales?

    • 0 avatar
      Zackman

      You don’t want to do that – it brings people into Buick dealers and gives them the opportunity for more business. The perception is that GMC is a cut above Chevy, true or not.

      • 0 avatar
        jaje

        GMC is “professional grade” but has no unique vehicle or line to its name. All its vehicles are also Chevrolets. GMC also sells Chevy based crossover SUVs (the new minivans). How does that fit in the “professional grade” brand? GMC is also to sell a small Scion competing box (IIRC called the terrain) which will even confuse people more (like how Jeep has trouble with the patriot / compass).

        I see the benefits outweighing the drawback in closing down GMC (folding into Chevrolet as no GMC model is unique). GMC is such a small amount of sales overall but require GM to spend millions extra in brand advertising / promotions, maintaining dealers who are on the same block as the Chevy dealer, etc. By adding a GMC trim level on Chevrolet trucks – you can still sell a premium “professional grade” Chevy pickup (the old GMC). I know people who will only buy a GMC truck and not a Chevy – but he is few and far between (why sell to such a small niche and waste millions every year when you can fix the problem by simplifying your structure now).

      • 0 avatar
        jaje

        For some reason can’t edit my comment. This is the same problem as GM had with Hummer. It had to spend millions on promoting its brand, it made the H2 and H3 based off of GMT platforms but at least gave them significantly different sheet metal and interiors. However since the brand was dependent heavily on truck sales – when gas prices went up Hummer was devastated. Since they now had separate dealers nationwide with little to no sales the project was a complete failure. History is teaching us that niche markets with high costs to maintain separate dealer networks and branding / marketing is too costly in a maturing automotive market.

      • 0 avatar
        Steven02

        jaje,
        The I don’t see many if any standalone GMC dealers. All the ones I have seen are partnered with Buick. It doesn’t take much to make the trucks GMC from Chevy. A few nicer materials, higher margins make the trucks worth while. Selling SUVs gets tricky with Buick and GMC, but it seems to work. The Terrain, Enclave and Acadia sell like hot cakes.

        I think the brands are ok when paired together. I don’t think you want to have Buick and Cadillac in the same sales channel. I think that would be bad for Caddy. Not quite as bad as trying to sell an Accent in the same show room as an Equus, but it isn’t a good thing either.

    • 0 avatar
      getacargetacheck

      Zackman, it’s probably true to some degree that there are buyers who walk in intending to buy a GMC and leave with a Buick. Or leave with both. But you could argue the same thing with Cadillac and Buick — Buick intenders leaving with a more expensive Cadillac. To me, now is a good time to ax GMC because gasoline is on a permanent climb. It’s simply a matter of channel and advertising efficiency. And there’s nothing “professional grade” about a GMC over an equivalent Chevy. Just marketing smoke and mirrors.

    • 0 avatar
      SVX pearlie

      GMC does a fine job of moving premium station wagons at excellent price points.

      Only a moron would suggest to get rid of GMC.

      • 0 avatar
        jaje

        SVX pearlie – does this make me a moron b/c I suggest so? So GM’s surviving right now with GMC selling nothing unique except higher level trim vehicles than the trucks and crossovers they are 95% based on. What about 20 years from now and the millions spent maintaining a different brand for something so similar to what they already sell. I recall from case studies similar companies who run inefficiently slowly succumbing to market forces b/c they couldn’t adapt.

        Does this make me as much as a moron who also suggested folding in Hummer, Saab, Pontiac, Saturn, and Geo? Did you see any value in closing or selling off these other brands that were also rebadges?

        Am I a moron b/c I see GM making the same issue with GMC and Buick. GM seems to be giving Buick a lot greater latitude and doing a much better job differentiating their products from its platform mates. An analogy I see, Buick is to Chevy as Acura is to Honda. However with GMC I see so much product overlap with the Chevy trucks and suvs – that’s millions spent each year letting people know there are Chevy and also GMC trucks.

        Efficiency is not great gains all the time – it is also making small changes for the better over time and sacrificing short term sales or profits for long term survival a thing GM has done very poorly for decades.

        I see the history of these brands but history is not enough to spend the money it takes to keep a brand name alive that is 95% the same under the skin as a platform mate under the mother brand. This moron will shut up for questioning GM’s management and marketing decision making b/c we all know they must be beyond reproach after having such a successful quarter (let’s conveniently forget the previous 5 years).

      • 0 avatar
        SVX pearlie

        If the GMC version looks and feels different to the customer, then it’s not the same.

        In the case of GMC, a lot of people made your argument at the time of GM’s bankruptcy, and the fact that GMC moved a lot of trucks, had a well-established identity, and generated a lot of profit pretty much made things a non-brainer for keeping.

        The GM model is to have a base for volume (Chevy) and premium versions for big profit (Buick & Caddy). Buick won’t have pickup trucks, nor Caddy, so GMC stays from that standpoint as well.

        Finally, 20 years is a long time. Looking back 20 years, it’s obvious that Saturn should have been the Olds (sub)compact, and Hummer should have been a GMC SUV. And Saab should have been let to die on its own. Of course, 20 years ago, we also had Mercury, Plymouth, even Eagle…

        New GM is still a big seller and seems to have done a good job of cutting back. But realistically, GMC simply can’t be cut without fundamentally changing the entire GM concept. And, given that historically, the GM model worked for them for decades, the few years that it didn’t are proportionally small. Given that New GM is consistently profitable, they deserve to be given the benefit of the doubt that their model works.

        The companies that come to mind not platforming are small, niche, and very expensive (BMW, Benz, Porsche).

        In the mass market, consider VW/Audi – they’re platformed similarly, but look and feel different. Or pretty much any other set of platformers in the industry. Lexus / Toyota or Ford / Lincoln for example.

      • 0 avatar
        jaje

        So do you know how much more profit a GMC truck makes over a Chevy truck of the similar trim? You make a factual statement that it’s a lot but I’ve never read the amount.

        If you have access to those facts then get us insight of GMC’s books and the costs of maintaining and paying to keep over a thousand dealers open to sell a GMC truck separate from a Chevy. Then let’s add up the additional staff (admin, legal, executive) needed to manage a separate brand to make sure there’s at least a difference the 95% similar Chevy truck sold; and then add up the separate advertising (media/internet/tv). The former adds up to millions annually. With that all in mind b/c running and maintaining separate brands is not cheap – the slightly larger profit of a GMC truck – does it overcome the expense? I see no recognition of this argument.

        So there are a niche of people who will only buy a GMC truck over a Chevy. If GMC closes the doors and Chevy adds a premium line in its own dealerships to replace GMC – those who “would not buy a Chevy truck” – will buy a the Chevy instead of another brand. For some reason Ford and Dodge do not need separate truck brands (Ford tried but couldn’t sell the Lincoln version). Mercury had a slightly higher transaction price from a Ford and look how well that has done.

  • avatar
    Carlson Fan

    Hey Garbage I feel your pain. I had the same issues with a 2001 Toy Highlander which is why you’ll never see a Toyota product parked in my garage again. On the otherhand my ’04 GMC PU has been absoultely flawless after over 7 years and 105K. Considering all the heavy towing I have done with it, it still amazes me that I haven’t had to touch the brakes on it yet!

    “GMC is such a small amount of sales overall”

    Really? They’ve already sold over 44K Sierra trucks this year which means they are on track to sell over 100K units for the year. That’s small potatoes? I do agree with the comments that GMC is in no way a premium truck compared to the Chevrolet. But that is why they are not anymore expensive than a Chevy comparably equipped. I liked the exterior styling better in ’04 on the GMC than the Chevy which is the only reason I bought it over the Chevy.

    • 0 avatar
      SVX pearlie

      GMC typical monthly sales are roughly:
      ~ 10k Sierra
      ~ 7k Acadia
      ~ 7k Terrain

      That’s roughly 300k units total annually, more than what BMW, Mazda, or Subaru will sell.

  • avatar
    JMII

    Nissan should go back and revisit the small / mid-size truck market everyone keeps ignoring. As gas prices continue their climb to $5 a gallon we all know they are NEVER going back to $2, so smaller trucks will start selling again. Why compete with the big boys when the market is already dominated by Ford. Carve out another niche and rule that segment, get ahead of the curve for once.

    I too have never understood GMC, I would make it a line of trucks sold at Chevy dealers. Similar to SS performance. This way you could a buy a Silverado or a Silverado GMC edition.

    • 0 avatar
      jaje

      I totally agree in adding a GMC trim line instead of floating an entire other dealership and marketing campaign. We must be morons (see above)!

  • avatar
    Dimwit

    Ford’s going from strength to strength, revamped engines, newer body style while both Dodge and GM are looking stodgy. Unless GM can get something new out there for 2012 they’re going to be in trouble. Particularily engine wise. Unless the Eco boost dies an ignomious death there’s nothing the other two have that has that sort of potential that I can see.

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