While General Motors has recovered since its epic 2009 bankruptcy, and its passenger cars are better than they have ever been, the company remains dependent on sales of pickup trucks and SUVs for its profits.
That’s just the way it is. Detroit, GM included, does trucks and full-sized heavy duty SUVs better than any of the competition. And the all-new Chevy Silverado pickup has arrived just in time to impress journalists and Wall Street as GM tries to make stock-price run as the government unwinds the ownership stake it took in GM when taxpayers helped bail out the company four years ago.
Silverado was in development for seven years, a bit longer than is usually the case with a GM vehicle, but the bankruptcy fell right in the middle of the process. And while time was lost, company officials did not want to rush the truck or take a chance of getting anything wrong.
There is much gamesmanship among car companies about their new pickup trucks. And for symbolic reasons, we think, Chevy chose a ranch near San Antonio, Texas, to introduce the new Silverado, a short drive from a factory where Toyota builds the Tundra pickup. Toyota has been trying to crack the full-sized pickup market for two decades with only limited success. While the Tundra gets high marks from Consumer Reports and J.D. Power, it has only been a middling success with truck buyers who trend to be extremely loyal to Detroit brands Chevy, Ford and Chrysler’s Ram.
While Ford is the number-one selling truck, and number-one selling vehicle in the U.S., GM actually out-sells Ford if the sales of Chevy Silverado and GMC Sierra are combined.
There is an unmistakable connection between pickup trucks, the U.S. economy and the heartland of the country. As home-building goes in the U.S., so goes the U.S. economy and pickup sales. And as housing starts and home fix-ups are recovering, Detroit is racking up more profits from truck sales.
And so go pickup sales, so goes the financial health of GM. The company earns more than $10,000 of gross profit per truck. That means GM earns between $5 billion of gross profit from its truck business in a good year. GM needs the trucks to do well with the public to make up for the very small profit, or loss per car, it makes on small cars like the Chevy Sonic and Spark and Volt.
The least-expensive Silverado, which begins arriving at dealers in the next month, start at about $23,000, a base model that actually only about 15 percent of truck buyers will take.
More than 60 percent of buyers add lots of features to their trucks and will pay more than $40,000. Those are the folks that Chevy, and GMC, drool over.
For a deep-dive review of the all-new Chevy Silverado, check out Autoblog’s review from our resident truck expert Zach Bowman.
Featured Gallery
Should the average car buyer be as bullish on General Motors as billionaire investor Warren Buffet?
Buffet has upped his stake in General Motors to 25 million shares in the fourth quarter. But it’s questionable whether or not GM will be able to keep up its solid results. Even though it posted its second straight year of earnings in North American, its European brand Opel is dragging things down.
American taxpayers should have an interest in what’s happening at GM, since we still own a big chunk of it. The government has announced its plan to unwind its ownership stake in GM this year, a process that may drag into early 2014.
But is GM on solid footing to go it alone? To not get itself back into the financial soup that caused it to fold in 2009?
From a product standpoint, we think on the whole that GM’s cars and trucks have never been better. But there are still some examples of vehicles that they have launched that have serious problems and have disappointed. Check out our gallery for three GM losers and winners, and why we have dubbed them thus.
The Chevy Cruz has been lauded by several automotive outlets, including AOL Autos. Our favorite version is the Cruze Eco, which gets 42 mpg to a reduction in weight and a turbo-charged 1.4 liter inline four cylinder engine. It also has a six-speed manual, which is not everyone’s cup of tea, but we like it. We saw highway fuel economy of 50 mpg when we were cursing in sixth gear. That’s just awesome with a non-hybrid and non-diesel car.
The Cruze does, of course, come with an automatic transmission as well. And this year, the compact sedan will also come as a diesel. Yup. Chevy is finally giving us a clean-diesel passenger car, just like Volkswagen and other Germans have been offering U.S. drivers for years.
The Cruze is a taut driver, with sufficient backseat room and trunk space for a car in this class. It stacks up perfectly well to stalwarts in the category, such as Toyota Corolla and Honda Civic, and many of our staff prefers it to both of those models. Chevy nailed it with the Cruze. The company should put the team that engineered and planned it on the next Malibu sedan to make that car as good.
The base Cruze starts at $17,130, and goes up to $23,550 for the top of the line six-speed automatic LTZ trim level. The sweet-spot for value here is the Cruze ECO automatic for $20,875.
A new entry level Cadillac to take on the BMW 3 Series. It is rear-wheel drive, like a BMW 3 Series, and the styling is very modern and sleek. It handles and accelerates like a first-tier sports car. And it was good enough to be North American Car of the Year, as voted on by fifty journalists.
The only thing holding back the ATS will be a less than wonderful dashboard control set-up that has replaced knobs and witches with capacitive-touch controls that can at times be frustrating and badly functioning.
This is a full-sized crossover, a kind of vehicle that GM pioneered after it got rid of its truck-based SUVs like the old Chevy Trailblazer.
The Enclave sits seven like a minivan, but without the sliding doors. The ride is more car-like than van like thanks to the front-drive (all-wheel-drive is optional) set up.
Buick is on a comeback roll, and it started with the Enclave, which is about to get a major upgrade and redesign.
It’s not that the Chevy Malibu is a rotten vehicle. It’s not bad at all. It’s pretty okay. But that’s not a ringing endorsement, is it? It also came out around the same time as an all-new Nissan Altima, Ford Fusion, Honda Accord and not long after an all-new Toyota Camry. And all of those mid-sized sedans had nicer interiors, cooler styling and better performing engines.
It’s tough to figure out how GM could have bolloxed such an important new car, though perhaps going through critical engineering while also going through bankruptcy impacted it.
Chevy is choking on a 150-day-plus supply of Malibus, and is busy, we hear, trying t a quick, emergency upgrade to aspects of the car they can still change before redesigning it again. We hope GM succeeds. But we also lament the choice of sticking with the Malibu name. It sounds so 1970s.
We questioned the comeback of the Regal name for what is a pretty nice new sedan. The Regal, after all, became everyone’s least favorite rental car in the 1990s as GM flooded rental fleets with base model Regals.
But when it debuted, we were impressed, especially with the curious decision to offer a turbo-charged manual shifter as as option.
The Regal is battling in a bit of a no-man’s land price -wise. It’s more expensive than mid-size sedans like Chevy Malibu and Honda Accord, but less than models like Toyota Avalon and Buick LaCrosse.
And then GM went and gave Buick dealers a sedan we like a lot, the Verano, which is priced less than the Regal. Since the Verano arrived, the Regal has been dying on dealer lots. It’s not that we don’t ilk the Regal, it is that we question the product planning chops at GM these days off the decision to give dealers both the Regal and Verano and not think the lesser priced one would cannibalize the more expensive sibling.
There is nothing wrong with the Chevy Volt in our books except that too few people want it. That’s a problem.
It retails for almost $40,000, but that number comes down to around $32,000 after federal tax credits for buying an extended-range electric vehicle. That means you can drive the car about 35 miles on an electric charge. When that runs out, a gas-powered motor keep the battery powered until you can plug-in again. Easy.
Except people are stubborn to change. Chevy has juiced sales of the Volt a couple of times with cheap leases that ranged from $199 to $239. But now people eke waiting for the cheaper deals to come back. Today’s lease deals run $299 or more. Still a good deal, but not when you think GM is going to go back to $199 to clear out inventory.
Nobody wants to sign up for $299 or more a month if you think $199 is around the corner.
GM and the feds have done a terrible job of selling the public on the benefits of an extended range EV. But it’s also possible that the American pubic just won’t bite on EVs just like they fight against exercise, calorie counts on menu boards, getting rid of bio-engineered crops and assault rifles. But lousy marketing hasn’t helped.
The current Equinox was good enough to win AOL Autos Best CUV under $30,000 designation last year. No easy task since it had to best Hondas CRV, Toyota RAV4, Hyundai Santa Fe, Mazda CX-5, Ford Escape and more.
The Equinox has it all–styling, fuel economy, especially in the four-cylinder version, space and a very nicely appointed interior. Chevy has been producing and selling the Equiniox full out since it launched, and there is good reason for that.