Shared by Tim Esterdahl to GM Authority.
For several years, there have been plenty of conversations on bringing a small, compact truck, ala the 1970’s-80’s size, back to the U.S. market. Now, GM may seriously be considering bringing one to market. Here is what we know.
It seems that a few sources finally wilted to the pressure of a barrage of questions by a Jalopink journalist. The story goes that while speaking off-the-record, these sources slipped and spoke about a “new LUV project.”
The speculation is that GM will build a version very similar to the current the Brazilian-built Chevrolet Montana truck, currently available in the Latin America region. This is essentially just an updated Chevy LUV that was sold in the U.S. from 1972-1981 when it was replaced by the S-10. (FYI – LUV stands for light utility vehicle). The current Chevy Montana is powered by a 1.4L 4-cylinder with a 5-speed manual transmission.
Before people get to excited about a compact with a manual transmission, it is far more likely that GM will just use their 6-speed automatic with the base 4 cylinder offered in the new 2015 Chevy Colorado and 2015 GMC Canyon.
The interior of the Chevy Montana will need some updating, but it isn’t so bad. And as an alternative, check out the GMC Granite CPU Concept.
Pros to the LUV
One of the first things bringing the LUV back brings to mind is that it helps compliment GM’s current strategy of offering a product for each customer. It also helps fill a void. For many city and small farm operators, the full-size truck just isn’t practical and/or it is way more powerful than their current needs. A small truck to go fix fence or to bring home landscape products back from the store is needed for many customers.
Another plus for the LUV is that GM could increase its fleet business. While consumers would like a truck like this, fleet customers would as well. For example, when Ford discontinued the Ranger, they lost many vehicle sales to the Tacoma. They thought fleet customers would simply move up to the F-150. Companies like Orkin disagreed and went with the smaller Tacoma. Why? It was easier to drive and their employees could more easily reach into the bed. A smaller Chevy LUV would be even more ideal for those tasks.
Also, it could appeal to a new market of younger car buyers who can’t afford nor want the larger full-size trucks. I’m speaking of course of the Gen Y buyers who so far have not bought as many new vehicles as previous generations. In fact, Scion had considered a compact truck for quite a while for this very same reason.
Lastly, this truck would fit nicely into GM’s efforts to meet the pending CAFE requirements. It is foreseeable that this truck could have outstanding fuel economy with a small footprint – in other words, be a CAFE dream.
Cons to the LUV
Even though it is great to offer a product for every type of customer, it isn’t always feasible. The truth is that profit margins on full-size trucks are pretty strong. This is a big reason why GM is holding to their pricing strategy on their new trucks and not offering additional incentives. With good profit and volume, this makes sense. However, in the smaller trucks, the profit is also smaller. What does this mean? If the volume isn’t there, GM will have to offer lots of incentives which could mean selling the truck at cost or for a loss.
The truth is that bringing a new compact truck to market is full of risk. While yes, you can visit any truck forum and find customers who want this option, it is hard to measure what the true demand really is in the U.S. Putting a lot of money into something that may not pan out is tough for any business. Yet, GM has been making a strong comeback as of late and a dud product could kill this momentum.
With all that said, GM isn’t averse to taking risk. GM’s Mark Reuss, Executive Vice President, Global Product Development, Purchasing and Supply Chain, recently said in an Automobile Magazine that critics said they couldn’t sell the Chevy Spark and the Buick Encore in the U.S. In fact, they are
selling really well and they are having trouble building enough supply of the Chevy Spark, according to Reuss, while the Encore just finished its first year of sales, exceeding expectations.
“I love doing things that make sense, that no one else is doing,” said Reuss.
What do you think? Is GM seriously considering a LUV remake? And are you on board with the idea?