GMC's Purpose Can Be Boiled Down to One Word - Denali
In the dark days of the recession, as General Motors was frantically attempting to save itself from the abyss, many thought it odd that the automaker’s GMC division was saved while a storied brand like Pontiac met its executioner. As for Saturn and Hummer, well, let’s just say far fewer tears were spilled over those deaths.
Clearly, GM saw long-term profitability in its carless brand — a prediction that has since panned out. From a low point in 2009, GMC sales doubled to 558,697 units by 2015. However, it isn’t the number of vehicles sold that’s the sweet spot for the automaker — it’s the number of GMCs sold in top-end Denali trim.
At GM’s utility brand, luxury versions of non-luxury vehicles are proving increasingly popular.
According to Motor Authority, Denali-badged vehicles now account for 25 percent of the brand’s sales. Not only does the brand enjoy the higher profits built into the price of a utility vehicle, it also nets the premium markup. No wonder GMC now offers Denali trim across its model range.
The trim first appeared on the flagship Yukon in 1999, but now can be found on lesser midsize Canyon pickups and the Terrain crossover. As such, Denali has become a de facto fourth brand in GM’s utility offerings, slotted above Chevrolet and GMC, and just below Cadillac. Greater profits come from the fact that the trim is just a big ol’ luxury appearance and convenience package, not an off-road package with piles of new hardware.
Two years ago, the trim accounted for 20 percent of the brand’s sales. It’s in GM’s best interests to boost that percentage ever higher.
While the brand plans to pretty much stay the course in the near future, one product mystery remains. GMC wants to muscle into the Jeep Wrangler’s territory with a small off-road SUV, though we’ve seen precious little evidence of it so far. That model could appear for the 2020 model year.
[Image: General Motors]
More by Steph Willems
Comments
Join the conversation
Is it just me, or has GM actually LEARNED a few things since the recession and bankruptcy? They are focusing on transaction prices, not market share; quality, not quantity, and reducing fleet sales. They're trying to get out of Europe, which will only get more unpredictable as the UK leaves (and if/when more countries leave) the EU, where they've never made money. They're still a strong contender in China. Every new model is a vast improvement over the previous ones, with actual effort put into the interiors and exteriors. And after a generation or so of overweight (if solid) models, those models' replacements were put on diets. They've beaten the Model 3 to market with the Bolt. Heck, they're even trying to pick up the US clean diesel ball VW dropped...and they're presumably NOT lying about the emissions.
The strongest use case for the Denali trim are the 'Burb & 'Hoe... erm... Yukon XL & Yukon Denali. On those big family SUVs, the Denali trim is more than just "a big ol' appearance and trim package". It's also the cheapest way into the big engine. The 6.2 make those big trucks capable of getting up to speed in Interstate traffic.