It’s no secret that the Chevrolet Silverado and GMC Sierra, along with their full-size SUV relatives, pay a lot of the bills for General Motors. In fact, the profit margins on a new full-sized truck is roughly double that of a small car. And with the popularity of full-size trucks in America — routinely on the short list for the best-selling vehicles in the country — the Silverado and Sierra bring home a lot of bread. As market share of full-size trucks expected to grow from 11.3 percent of the U.S. market in 2012 to 12.8 percent in 2015, that spells good news for General Motors.
What’s more, The General’s all-new pickup trucks are expected to achieve a higher profit margin than the outgoing units. As it currently stands, Ford enjoys a $4,000 higher profit per truck sold and Ram pickups average $2,000 more per transaction than what is currently seen with the Chevrolet Silverado and GMC Sierra, according to Itay Michaeli of Citi Research as noted in a Detroit Free Press report. All this will change with the pricing of the all-new 2014 Silverado and Sierra, which Barclays Capital estimates will bring in an additional $695 million in funds this year alone while growing to $753 million in 2014, contributing to an 8.4 percent profit margin for The General as a whole.
Notably, Citi also estimates that if GM observes a $2,000 boost in profits sold per truck, with nearly 1 million units sold, then the automaker will enjoy a whole $2 billion growth in profits. But in order to achieve that, the trucks have to be knockout hits. The verdict is still out on whether or not that will be the case.