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Autonews: GM's 'told ya so' small pickups Sales are conquested, not cannibalized


Biker16

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I guess those Ranger fanatics were right. GM's 'told ya so' small pickups Sales are conquested, not cannibalized

 

 

Mike Colias rsslogo.jpg
Automotive News
November 2, 2015 - 12:01 am ET

DETROIT -- Two years ago, General Motors' Mark Reuss relaxed on a lounge seat at the Los Angeles Auto Show, a few yards away from the new Chevrolet Colorado pickup that he'd unveiled hours earlier.

Reuss chuckled when asked about GM's gamble on smaller pickups, a category Ford and Ram had left for dead. Could he recall a time when one of the Detroit 3's pickup strategies had diverged so sharply from rivals'?

"No. It's wild," Reuss said, beaming. "This is going to be exciting to watch."

Now, one year after the Colorado and sibling GMC Canyon hit U.S. showrooms, Reuss has 95,000 more reasons to smile.

 

 

The numbers tell the tale:

• The Canyon's average transaction price of about $34,100 is tops in the midsize-pickup segment, data from Edmunds.com show. The Colorado's is $31,800, higher than the segment-leading Toyota Tacoma's $30,015, though that should rise after the Tacoma's recent redesign.

• The percentage of buyers from other brands -- the conquest rate -- is 56 percent for Canyon and nearly 50 percent for the Colorado, GM says. The Colorado's top conquests are Tacoma and Ford F-150 buyers.

• Around 40 percent of Colorados are rolling off dealership lots accessorized with bike racks and other gear, boosting dealer and GM profits, the company says.

Perhaps the most important measure of success doesn't show up in the Colorado's numbers at all: Sales of the big brother Silverado are red hot, too, erasing concerns that the Colorado would simply siphon sales away from GM's biggest money maker.

Edited by Biker16
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I'll be the first to admit it's way better than I ever anticipated. However, half of all sales are still coming from GM. It's interesting to note that GM does not disclose how many GM buyers came from full sized trucks - they obviously have that data. I bet there are more Silvererra conquests than F150 conquests.

 

You can say it hasn't hurt Silvererra sales but by the same token it also hasn't hurt F150 sales. One or even two years isn't enough to judge long term viability but so far so good for them.

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:backtotopic: Since they say one of the main conquests has been F150, I wonder which generations they're seeing come in. This gen, last gen, 1995...?

 

If I had to guess, I would say the '97-'03 generation. That was the last generation of the 'smaller' looking and more aerodynamic F150. The '04+ F150 grew is size (at least it appeared much larger) and weight, and I'm betting a lot of the '97-'03 gen F150 owners were looking for something smaller. Just a hunch as I have no evidence to back it up...

 

With that said, I've only seen a handful of the new Coloranyons around here. And I haven't seen ANY F150's on the local Chevy dealer's lot.

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I guess those Ranger fanatics were right. GM's 'told ya so' small pickups Sales are conquested, not cannibalized

 

 

 

Ranger fanatics wanted a cheap compact truck. GM didn't do what they want. They delivered a full featured expensive midsize truck.

 

Give GM credit for noticing a demographic shift in the truck market. People buying Canyorado are white collar professionals with high household income. Not the same as the old compact truck buyers.

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I seriously considered one. For me, they got the size just right as it can do about anything a typical homeowner would want a truck to do and yet it is easy to drive in the city, park, and it fits in garages. Interior quality is only fair in my opinion. Kind of cheap feeling. I think their real impact on the market has yet to occur. Its the that diesel could really be a game changer. It will be interesting to see what their sales do once the 2.8 Duramaxes are available. 30+ mpg, and that level of utility is an intriguing combination.

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The Canyorado is what the Sport Trac was trying to be. I still believe the Sport Trac would have done much better had it been marketed as an F100 pickup instead of a Explorer SUT.

 

I agree. If you look at the transaction price of Sport Trac vs. Ranger, and where Canyorado is right now, that was indeed Ford's intention. But Sport Trac became an orphan when Ford put IRS on the Explorer and it wasn't cost effective to do a solid rear axle version just for Sport Trac.

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• The percentage of buyers from other brands -- the conquest rate -- is 56 percent for Canyon

and nearly 50 percent for the Colorado, GM says.

 

The Colorado's top conquests are Tacoma and Ford F-150 buyers.

Two things:

- While the conquest rates for non-GM buyers are 56% and 50% respective,

the GM cannibalization rate is 44% and 50% respectively for Colorado and Canyon.

What we should be asking is which GM vehicles are these buyers coming from?

 

- While Colorado's top conquests are Tacoma and F150, they are sub percentages of that

56% of 8,000 sales per month sales, or portions of at best ~4,500/mth sales and if Colorado

conquest sales were evenly split, the bleed from F150 buyers would be luck to reach 2,000/mth.

 

The more you think about that article, the more the spin is apparent, Sure, GM is extracting 10K to 12K

sales per month but just under half of Colorado/Canyon buyer are returning GM buyers. GM's Mid Sized

Truck production is barely twelve months, a strategic segment vehicles would get much more in the way of conquests.

Edited by jpd80
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Give GM credit for noticing a demographic shift in the truck market. People buying Canyorado are white collar professionals with high household income. Not the same as the old compact truck buyers.

 

Definitely. Retail consumers who purchase or lease new pickup trucks are indeed younger, highly educated folks who live in major metropolitan areas. Old geezers like me used to call these people 'yuppies', and it's no exaggeration to say that high-end, full size pickup trucks are currently a status symbol for these consumers. As the Automotive News article asserts, midsize pickup trucks - GM's new models in particular - appeal to this demographic too.

 

Kudos to GM for recognizing the latent demand for a modern midsize pickup truck in the U.S. market. The 2015 Motor Trend Truck of the Year is among the most successful new product launches for MY 2015 in any light vehicle category, car or truck.

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Any time someone buys a truck from an American auto producer rather than Toyota or Nissan - it is a good thing.

 

Agreed. It's even better when product merit is why someone chooses a GM, Ford, or Tesla product over competitors. In the case of 2015 Colorado and Canyon, the numerous awards garnered by those models along with their high conquest rates suggest that the overall excellence of these trucks are winning over customers.

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Two things:

- While the conquest rates for non-GM buyers are 56% and 50% respective,

the GM cannibalization rate is 44% and 50% respectively for Colorado and Canyon.

What we should be asking is which GM vehicles are these buyers coming from?

 

 

Sigh.

 

I'm just going to copy this reply every time someone posts this about conquest rates vs cannibalization rates.

 

A 56% conquest rate does not equal a 44% cannibalization rate.

 

Examples:

 

- Previous Canyonorado owners.

- GM owners who were not considering another GM product.

- GM owners who were not planning on buying a vehicle at the current time.

- GM owners who added one as an extra vehicle.

- GM owners who were going to buy a less expensive GM product.

- Edit: Conquest buyers that would have bought a different GM product (as akirby mentioned below)

 

The Flex has close to a 50% conquest rate. That does not mean the other 50% is cannibalizing other more expensive Ford sales.

Edited by Intrepidatious
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