Each year, the Detroit Three truck makers cut prices and profits while racing to win the coveted “best-selling truck in America” title. However, this may soon be changing. GM has seemingly decided to forgo mass sales volume goals and instead focus on profits. That said, GM trucks did outsell Ford trucks in August.
A recent story on Pickuptrucks.com suggests GM will continue to hold to its pricing strategy and not chase the crown. The pricing strategy is to be price competitive in the entry level truck segment while offering fewer incentives on higher trim levels. These higher trim levels have substantially more profit than the base trucks.
This pricing strategy has caught many analysts by surprise since if there was ever a year for GM to grow market share and chase the crown, it is this year. Long-time sales champ Ford has seen flat sales growth all year long while it prepares to release the new 2015 F-150.
With Ford’s truck sales relax, GM could substantially grow its market share through an aggressive pricing strategy for the Chevrolet Silverado and GMC Sierra lineup. Instead, GM is focusing on profits and bringing the new 2015 Chevy Colorado and 2015 GMC Canyon to market at the end of the month.
This is significant since the truck segment is known for having the most brand loyal customers anywhere. Typically, truck buyers are generational, in that, if one member buys XYZ brand, this brand is usually bought by other members as well. Also, customers will continually come back to the brand time and time again.
Ultimately, this strategy will be looked back on in future years as either a stroke of genius or an incredibly poor decision. Time will tell.