Jump to content

GM urges patience as Silverado falls to No. 3


silvrsvt

Recommended Posts

The reason for sales fall off are very well articulated in the article posted in OP - GM is limiting fleet sale in a misguided attempt to increase unit profit. That strategy may make sense on Malibu but it's almost Monte Python-esque when the vehicle in question is fullsize truck.

Link to comment
Share on other sites

2 hours ago, CKNSLS said:

The above replies while interesting are off the mark as to why Silverado sales are down.  I don't expect Ford guys to hang out on Chevy boards-so I guess it's excusable. The main reason why sales on down-is that the redesign is pretty much universally hated even by those loyal to Chevy trucks.

The interior-while miles behind Ford and RAM-is the least of the issue. You don't go near the truck to look at the interior if the front of the truck is hideous.

While your comments on the styling may be a factor in sales drop it doesn't explain the drop from last year when styling was similar, I think the point here is that Silverado buyers don't see anything new to encourage them to go buy a new truck. The perception of a 2.7 I-4T in a full sized truck is not good, it's the very reason why Ford went V6 with its baby 2.7 Ecoboost...GM just can't get there with so many perception gaps, the main seller in Silverado is still the 5.3 V8 yet it's the least talked about by GM.

Quote

 

bzcat says,

The reason for sales fall off are very well articulated in the article posted in OP - GM is limiting fleet sale in a misguided attempt to increase unit profit. That strategy may make sense on Malibu but it's almost Monte Python-esque when the vehicle in question is fullsize truck.

 

Go on any GM fan sites like I do and the first thing GM fans throw at Ford and FCA fans is fleet sales, they don't understand the difference between daily rental, commercial and government fleet sales. So when they see F Series at 30% fleet sales or Transit at 80% fleet sales, well they just assume that Ford must be giving them away......easy to understand why when we see GM's comments on fleet sales-

GM is obsessed with profit as a percentage of revenue and they are just killing easy incremental commercial fleet sales to do acheive better percentages, it's almost like GM thinks that the "endless summer" of full sized SUV sales won't ever end.

Edited by jpd80
Link to comment
Share on other sites

3 hours ago, CKNSLS said:

The above replies while interesting are off the mark as to why Silverado sales are down.  I don't expect Ford guys to hang out on Chevy boards-so I guess it's excusable. The main reason why sales on down-is that the redesign is pretty much universally hated even by those loyal to Chevy trucks.

The interior-while miles behind Ford and RAM-is the least of the issue. You don't go near the truck to look at the interior if the front of the truck is hideous.

We've talked about that plenty, just not as much in this thread 

Link to comment
Share on other sites

1 hour ago, jpd80 said:

Go on any GM fan sites like I do and the first thing GM fans throw at Ford and FCA fans is fleet sales, they don't understand the difference between daily rental, commercial and government fleet sales. So when they see F Series at 30% fleet sales or Transit at 80% fleet sales, well they just assume that Ford must be giving them away......easy to understand why when we see GM's comments on fleet sales-

It's so easy to look up ATP numbers and realize how not true that is. That's just laziness. 

  • Like 1
Link to comment
Share on other sites

2 hours ago, bzcat said:

The reason for sales fall off are very well articulated in the article posted in OP - GM is limiting fleet sale in a misguided attempt to increase unit profit. That strategy may make sense on Malibu but it's almost Monte Python-esque when the vehicle in question is fullsize truck.

HD trucks, sure. Those are more for businesses and governments to buy in bulk than for individual retail consumers. But LD fullsize trucks have become substitutes for passenger cars and status symbols, more than ever before. Focusing on sales of crew cab mid and high trim trucks, like GM is doing with Silverado, to rich consumers in large metro areas is smart. Why chase fleet customers who by definition get major price concessions for buying 5 or more trucks at a time, and usually get lower trim models, when there are plenty of individual customers who are ready to pony up the big bucks for fancy trucks? The pickup truck makers get more revenue & profit per unit selling to individuals. That can easily make up for a decrease in units sold.

GM's strategy to reduce fleet sales and increase retail market share has been in place for a few years now. It's a good one. Targets should be 10% fleet or less for passenger cars/crossovers, 20% fleet or less for LD pickup trucks.

 

Link to comment
Share on other sites

1 hour ago, rperez817 said:

20% fleet or less for LD pickup trucks.

Bullshit

There's plenty of independent contractors or other trades companies (plumbers come to mind but they mostly use vans) who only need a 1500 series truck who still qualify as fleet buyers, and for the amount of money being asked for these things now, both Ford and RAM offer a far superior value. 

  • Like 3
Link to comment
Share on other sites

Commercial fleet sales is an area where F Series' sales profile differs significantly to GM's, GM traditionally sold a heck of a lot more single cab 1500s to mostly fleets compared to F150 which was more of the Super crew and Crew cab vehicles..This is why GM has been scrambling to build more crew cabs and let single cab production slide.

Also another area not understood is that F150 to Super Duty Sales proportion is roughly 2 to 1 where as  Silverado/Sierra tends to sell even more 1500 to the HDs, GM is doubling down on HDs because it sees how much money Ford is making.

Ford also makes use of its commercial fleet sales to keep its three F Series plants working full steam during winter months when retail sales drop off, it helps balance their production and provides a nice seasonal income boos that would otherwise be missed.

Edited by jpd80
Link to comment
Share on other sites

3 hours ago, rperez817 said:

HD trucks, sure. Those are more for businesses and governments to buy in bulk than for individual retail consumers. But LD fullsize trucks have become substitutes for passenger cars and status symbols, more than ever before. Focusing on sales of crew cab mid and high trim trucks, like GM is doing with Silverado, to rich consumers in large metro areas is smart. Why chase fleet customers who by definition get major price concessions for buying 5 or more trucks at a time, and usually get lower trim models, when there are plenty of individual customers who are ready to pony up the big bucks for fancy trucks? The pickup truck makers get more revenue & profit per unit selling to individuals. That can easily make up for a decrease in units sold.

GM's strategy to reduce fleet sales and increase retail market share has been in place for a few years now. It's a good one. Targets should be 10% fleet or less for passenger cars/crossovers, 20% fleet or less for LD pickup trucks.

 

Why chase fleet customer? Because you have high fixed costs and you are selling a truck... duh!

Fleet is not some optional part of the market where you can choose to not to participate if you are GM with 3 plants cranking out fullsize pickup trucks. It's structural and fundamental part of your business. It's like saying maybe Sams Club should not sell bulk sizes and should instead sell smaller packages at higher cost because it improves unit profit. All those people willing to pay premium for smaller sizes will make up for decrease for overall volumes sold... right? But guess what, Sams is in the bulk business... it is not Whole Foods. By not selling in bulk, Sams will just driving its customers to Costco or BJs.

Ford and Ram is eating GM's lunch right now in fullsize trucks because GM has simpletons running spreadsheets on "goal seek" to maximize unit margin and ignoring the fixed costs. That's a fine strategy for Cadillac. It's not a good idea for fullsize truck where fleet buyers account for about 40% of the overall market. You can't skip out on 40% of the market and say you will make it up in margin when you are setup to sell in volume... you can try but it won't be sustainable.

What's next? Is GM going to limit fleet sales in vans where fleet buyers are 90% of the market? Yea, let them make up that volume in margin... ?

Edited by bzcat
  • Like 1
Link to comment
Share on other sites

8 hours ago, fordmantpw said:

If you think the 1500 is hideous, just wait for the 2020 HD!

2020-Chevrolet-Silverado-2500HD-04.jpg

Wow, I don’t even know what to say about that truck.  One thing is for sure, they won’t confuse this model with the previous generation, although I don’t know if I would consider that a positive attribute at this point. 

Link to comment
Share on other sites

16 hours ago, rperez817 said:

HD trucks, sure. Those are more for businesses and governments to buy in bulk than for individual retail consumers. But LD fullsize trucks have become substitutes for passenger cars and status symbols, more than ever before. Focusing on sales of crew cab mid and high trim trucks, like GM is doing with Silverado, to rich consumers in large metro areas is smart. Why chase fleet customers who by definition get major price concessions for buying 5 or more trucks at a time, and usually get lower trim models, when there are plenty of individual customers who are ready to pony up the big bucks for fancy trucks? The pickup truck makers get more revenue & profit per unit selling to individuals. That can easily make up for a decrease in units sold.

GM's strategy to reduce fleet sales and increase retail market share has been in place for a few years now. It's a good one. Targets should be 10% fleet or less for passenger cars/crossovers, 20% fleet or less for LD pickup trucks.

 

Except Ford has the fleet sales AND the high trim trucks sales.

  • Like 1
Link to comment
Share on other sites

11 hours ago, rmc523 said:

Except Ford has the fleet sales AND the high trim trucks sales.

This. For as good a job GM has done capitalizing on retail buyers in its mid and full sized trucks and especially full sized SUVs, it really hasn't come to terms with  commercial fleet sales. That one sided retail argument plays well in board rooms with people reading profits as percentages of income but they throw away so much potential profit and production stability by ignoring it.

Sure GM wants back into commercial fleets with its new 6.6 gasoline engine but man, teaming it with a 6-speed auto trans smacks of laziness, couldn't be F'ed....Silverado looks both confusing and disappointing to me, SD team would be ordering drinks at the bar.:)

Ford is looking like being all over GM with the Super Duty F600, the 6.2 and 7.3 double gut punch, the 10-speed auto  and Powerstroke diesel rounding a comprehensive commercial truck line up. No way is Ford giving any ground on Commercial fleet sales.

Link to comment
Share on other sites

1 hour ago, jpd80 said:

This. For as good a job GM has done capitalizing on retail buyers in its mid and full sized trucks and especially full sized SUVs, it really hasn't come to terms with  commercial fleet sales. That one sided retail argument plays well in board rooms with people reading profits as percentages of income but they throw away so much potential profit and production stability by ignoring it.

Sure GM wants back into commercial fleets with its new 6.6 gasoline engine but man, teaming it with a 6-speed auto trans smacks of laziness, couldn't be F'ed....Silverado looks both confusing and disappointing to me, SD team would be ordering drinks at the bar.:)

Ford is looking like being all over GM with the Super Duty F600, the 6.2 and 7.3 double gut punch, the 10-speed auto  and Powerstroke diesel rounding a comprehensive commercial truck line up. No way is Ford giving any ground on Commercial fleet sales.

The only reason RAM has gained anything in the HD truck market has been because of cash on the hood, I'm convinced of that. 

Link to comment
Share on other sites

57 minutes ago, fuzzymoomoo said:

The only reason RAM has gained anything in the HD truck market has been because of cash on the hood, I'm convinced of that. 

Indeed Ram does flash the cash but GM opened the door with an under performing Silverado, even with truck month after truck month, Chevrolet can't seem to get sales traction....

Edited by jpd80
Link to comment
Share on other sites

3 hours ago, jpd80 said:

Indeed Ram does flash the cash but GM opened the door with an under performing Silverado, even with truck month after truck month, Chevrolet can't seem to get sales traction....

GM just started production of the lower trim T1s and HD just this past month. Didn't GM have this type of issue before when switching from GMT900 the K2?. I'm sure truck sales will increase unless someone has proof they won't at all.

As for engines the Duramax blows the doors off the Ram in actual towing test despite having less advertised tq, as for the 6.6 remember it only replaced the 6.0, not a BB replacement.

  • Like 1
Link to comment
Share on other sites

1 minute ago, Fgts said:

As for engines the Duramax blows the doors off the Ram in actual towing test despite having less advertised tq, as for the 6.6 remember it only replaced the 6.0, not a BB replacement.

RAM also has the Cummins name which apparently still counts for something

Link to comment
Share on other sites

22 minutes ago, Fgts said:

GM just started production of the lower trim T1s and HD just this past month. Didn't GM have this type of issue before when switching from GMT900 the K2?. I'm sure truck sales will increase unless someone has proof they won't at all.

As for engines the Duramax blows the doors off the Ram in actual towing test despite having less advertised tq, as for the 6.6 remember it only replaced the 6.0, not a BB replacement.

Correct, GM did not offer Regular cabs and standard bed configurations on MY19, those have only been added in the past month but that was a decision GM consciously made to increase profits and force buyers to purchase the more profitable double cabs.

The 6.6 gas V8 was needed in HD for quite a while and it should hold sales ground but gee, why no 10-speed auto option. and the 6.6 Duramax + Allison branded auto  is what GM buyers want to hear and the 10-speed auto is welcom on 2500 and 3500 trucks.

I just see Ram coming out hard with its 2020 Trucks, the next gen Cummins with 400 HP and over 1,000 lb ft will keep Ram in front of potential buyers. I just don't see GM really standing out...and that's without mentioning the Ford elephant in the room......

 

Link to comment
Share on other sites

On 6/21/2019 at 11:42 PM, fuzzymoomoo said:

The only reason RAM has gained anything in the HD truck market has been because of cash on the hood, I'm convinced of that. 

Pretty much. A few years back, a former employer engaged in construction had a fleet of a couple hundred truckstrucks from 1/4 ton right through to half ton, one ton, E450 cube Van's, class 5,6,7 dumps and class 7 cubes.

 

They usually bought Ford, but the dealer who owned multiple dealerships made  a deal on some 5500 Rams. We got 6 Calibers for free by buying 6 Ram chassis cabs.

 

the Calibers were used for runabouts and light deliveries.

Link to comment
Share on other sites

57 minutes ago, rperez817 said:

Which means Ford will continue to have a lower profit margin on its North American automotive business but higher revenue compared to GM.

Which means you don't understand commercial F series fleet sales.  Even with fleet prices I bet it still has >10% profit margin.

Link to comment
Share on other sites

8 minutes ago, akirby said:

Which means you don't understand commercial F series fleet sales.  Even with fleet prices I bet it still has >10% profit margin.

I understand it just fine sir. GM and Ford have different strategies for revenue vs. profitability with their LD full size pickup trucks. With Silverado and Sierra, GM wants to maximize profitability even it means lower sales volume, and lower revenue. With F-150, Ford wants to ensure the highest volume of sales possible, meaning greater revenue. That means they are willing to accept lower profit margin and do more fleet sales than GM.

As I mentioned earlier, HD/Super Duty trucks are another matter. Those types of trucks are for business and government buyers, not individuals, and it makes sense that the majority are sold as fleet.

Link to comment
Share on other sites

7 minutes ago, rperez817 said:

I understand it just fine sir. GM and Ford have different strategies for revenue vs. profitability with their LD full size pickup trucks. With Silverado and Sierra, GM wants to maximize profitability even it means lower sales volume, and lower revenue. With F-150, Ford wants to ensure the highest volume of sales possible, meaning greater revenue. That means they are willing to accept lower profit margin and do more fleet sales than GM.

Explain to me why Ford's rebates are lower then if Ford just wants to ensure highest volume possible.

7 minutes ago, rperez817 said:

As I mentioned earlier, HD/Super Duty trucks are another matter. Those types of trucks are for business and government buyers, not individuals, and it makes sense that the majority are sold as fleet.

Seriously?  Have you never been to a campground, or even on a highway to see all the Super Duty and Ram HD trucks pulling big fifth wheels?

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...