Mailbag: GM’s Two-Brand Truck Strategy Is BS, So Is GMC
65
Sponsored Links
This article is part of the GM Authority Mailbag series, where the GM Authority Crew features and replies to your questions, comments, and observations.
The following comes to us from Michael C:
“After watching GM’s dog-and-pony show that was the unveiling of the 2014 Silverado and Sierra, I realized just how big of a crock the GMC brand really is. I mean I already knew GMC has no unique products and is “differentiated” from Chevy by new grilles, lights and logos, along with a catchy (but baseless) tagline (Professional Grade, eh?). Where to begin? How about GM’s presentation that made a piss-poor attempt to present the different between Chevy and GMC. Take Mark Reuss’ comments during the presentation, breaking down the types of customers buying Silverado and Sierra.
Humor me by reading the transcription of Mark Ruess’ speech: “At Chevrolet and GMC, our goal is simple: to meet the specific needs of a broad customer base: no compromises, not for our customers, and certainly not in our trucks.
But let me correct myself: it’s really not a three-trucks strategy, it’s in fact a six-truck strategy — three sizes off of two brands.
Because in addition to different needs, customers also have different styles and personalities. And they want completely different styles and personalities from their trucks. They also want their brand to be a reflection of who they are and what they stand for. The key is to provide clearly differentiated trucks that appeal to different customers and then deliver an equally distinct retail experience and service experience in our showrooms. The new Sierra and Silverado are more differentiated than ever before in our history, in unique features and materials, in their standard content, and in their design and details. These are two strong and distinct brands, each one appealing to a different kind of customer.
Silverado customers want a truck that’s honest, hardworking, and dependable — just like they are. One they can pass on to their children. This has been the Silverado mission for generations and we will not waiver from it.”
So what GM seems to be implying here is that Sierra buyers aren’t “honest, hardworking, and dependable”, and they don’t want to pass on their Sierras to their children. I call BS on that. But that’s not even the end of it:
“But the Silverado won’t take on the competition by itself alone. Sierra customers are the people that others turn to for expertise and advice. They know that the devil is in the details, and believe that if something is worth doing, it is worth doing well. So, they look for things that make them better at what they do. And they are willing to pay more for premium products with distinctive craftsmanship and the content that they want. For these customers, we’re using professional-grade engineering to carve out an all-new 2014 GMC Sierra.”
And here, the implied message is that Silverado owners don’t pay attention to detail, and don’t believe that “if something is worth doing, it is worth doing well”. And what the heck is this “professional-grade engineering” business? Let’s call it for what it is: the same engineering that’s on the Silverado, with different front/rear ends and a higher quality interior materials that could just as easily be found on the Chevy.
Then there’s this: “The 2014 GMC Sierra offers our customers things no other pickup truck has, like projector headlamps, forward collision alert, lane departure warning, and safety alert seat. Plus, a host of other features, all built with an attention to detail and quality materials like real aluminum in the interior. That’s on top of the refinement of a premium cabin that’s exceptionally quiet and extremely comfortable.”
So here’s my question: why can’t the Silverado offer features like projector headlamps, forward collision alert, lane departure warning, and safety alert seat? Why can’t the Silvaerdo, or a trim level of the Silverado, be built with “attention to detail” and quality materials?
The answer is clear: it can. And it should.
But rather than doing the right thing and killing off GMC, GM is hell-bent on creating a purely artificial separation between the two trucks. What’s even more concerning to me is that GM doesn’t even begin to understand its truck customers; it seems to think that Silverado buyers are rednecks who are “good ol’ boys”, while Sierra customers are a discerning bunch… like foremen on construction sites? Puh-lease!
Ford does it all with the F-Series by having different trim levels and different price points; some have “quality” materials on the inside… some don’t. There’s no reason GM can’t do the same with the Silverado while sparing everyone the superfluous and artificial differentiation BS that is the Sierra. Because everyone knows that the Sierra is still a rebadged Silverado.
Michael — now that you point it out, those statements do make for an odd bifurcation of truck customers. That said, I’m not convinced that Silverado/Sierra customers are mutually exclusive; in other words, do Silverado customers openly reject the presence of quality interior materials, or do they simply not care about them as much as Sierra buyers? Or, would buyers of the new Sierra have otherwise purchased a Silverado if aluminum were available in its cabin? That seems to support your “artificial separation” argument. And with that, I’m still left scratching my head at the “honest” aspect of GM’s unveiling presentation for the Silverado. Is “honest” code for “simpleton”? Are Sierra buyers somehow more sophisticated or complex, and less “honest”? That does, indeed, seem like a weak foundation on which to separate customers.
Ultimately, the argument for GM’s two-brand approach is that The General can’t serve the market as effectively with one brand. And that makes sense on the surface, until one realizes that the F-Series still outsells both the Silverado and Sierra combined… which makes me (personally) question GM’s dual-brand strategy.
With that, I’m very curious to open this discussion up to the GM Authority army, and ask what it thinks. So, let’s keep it civil in the comments, folks.
Sponsored Links
So far this year in January the GM twins have out sold the Ford trucks (PUTC.com sales results).
I for one am happy there are two trucks, gives each person who might not like the chrome and bar on the silverado a different choice. There isn’t much more development costs so why not? If they just had chevy who is to say those who bought the GMC would have bought the Chevy if the GMC wasn’t offered? So many times you hear someone say one is better looking than the other. It just gives GM that edge to attract more customers based on looks alone. Plus it gives the Buick dealerships something to sell other than cars and CUV’s…
Honestly, I think alot of the hate stems from jealousy. Some ford diehard might be upset he just wants to buy FOMOCO and isn’t completely happy with the design of his truck but his company doesn’t offer another choice where GM does.
There is a difference between Chevrolet camp and the GMC camp, just like there are those in the Corvette community. There are those who hate the C7 and love the C2. And there will never be a consensus between the two communities. I restored a 1990 Chevrolet 1500 Silverado and while it’s about as tight as a drum it truly pales in comparison to a 2014 Silverado. The 2014 is truly a quality and durability that is unmatched by ford and Dodge. BUT. . . I don’t understand why GM did away with the extended cab on a Chevrolet or GMC 1500 2500 and 3500 platforms ? I realize the 2500 and the 3500 are truly real work trucks, and that most buyers opt for making the truck, the family vehicle ! Now Ford says they sell a F-150 every 42 seconds. . . I have to guess that includes the used car market, and they went with a V6 turbo. But no matter what, there is no substitute for the smooth idle and step on the gas peddle than a V8. I personally look forward to buy my first brand new Silverado LTZ.
Well this time GMC rules – IMHO the best looking pickup on the market.
GM should make GMC the truck division of General Motors. You want a pickup, van, SUV, box van or semi tractor? Then it’s a GMC. No division of ad dollars between Chevy, GMC, or Buick. All the dealers become, Chevy/ GMC, Buick/GMC, or Cadillac/ GMC. No waste in minor detail changes between Chevy & GMC.
Working in a stamping plant I can tell you the costs to differentiate the sheet metal is significant. Domestically sourced dies can cost upwards of six figures, multiply that by four or five per part,now add for the other side, left hand, or right hand. Some dies stamp both hands simultaneously. Then factor some parts require special shipping containers for Chevy vs GMC. Very expensive and that’s just a small part of the cost. In other words there would be a huge cost savings to go with a single model. That being said, how many sales would be lost by eliminating GMC? I would say a significant amount, some would switch to chevy,others would jump ship. Apparently enough in GM’s projections to negate the viability of this idea. Personally I like having a choice in the styling and have went back and forth between the two in different model years. Currently I favor the styling of the 2014 Sierra, might have to trade in the ol’ Chevy.
It is BS. GM should have kept the Pontiac name brand and either GMC Trucks or Chevy Trucks should have gone out of pasture since both makes produces duplicate models line by line with only a name plate change.
No one is voting for you Pedro.
“GMC Trucks or Chevy Trucks should have gone out of pasture since both makes produces duplicate models line by line with only a name plate change.”
And what was Pontiac for the last 4 or it’s years? Duplicate models lines with other GM brands with only a name plate change.
The whole GMC vs. Pontiac thing came down to revenue per unit. A Sierra would net GM more money than a G5 could ever get.
G8 and Solstice. Original Pontiac designs. The G8 especially deserved a better fate.
“G8 and Solstice. Original Pontiac designs.”
Reading isn’t your bag, is it?
“Duplicate models lines with other GM brands with only a name plate change.”
Holden did all the work for the Commodore. To call it a Pontiac ment adding a crease in the sheetmetal. Again, the G8 was just a duplicate.
As for the Kappa, Opel did the all the work for the GT, the Sky, and the G2X. To call it a Pontiac ment adding a crease in the sheetmetal. Again, the Solstice was just a duplicate.
Neither the G8, the Solstice, or any car like them would have saved Pontiac.
I can read, Douche. Sorry, but I was just using a more narrow scope, which I think is justified considering the topic. Being that we are discussing Pontiac, all brands that are not for sale in North America are irrelevant. You cannot buy a Commodore in Canada or the U.S., so therefore there were no other GM vehicles available like the G8 to those consumers. It wasn’t a situation like the G6, where you had duplicates sharing the same showroom. The criticism would have been fine if you could buy Holdens in NA.
As for the Solstice, it was not simply slapping a Pontiac badge on and creasing the sheet metal; that body design was like nothing else in the GM stable (much different than Silverado/Sierra differentiation). Yes, the Saturn Sky was a duplicate, but it came to be after the Solstice was green lighted.
You’re still missing the point; you’re still thinking in terms of cars available in North America. I ‘m talking cars made by GM, irrespective of where it’s final point of sale is.
You need to stop thinking of the auto industry as it is in NA and see it as it is globaly. It doesn’t matter that the G8 had no immediate duplicates in NAl the fact of the matter is that the G8 was just a LHD Commodore. Holden being sold in NA doesn’t even enter the equation.
Same deal with the Solstice. You’re hung up on body panels; the paneling itself isn’t where the majority of the engineering money goes, the chassis is. You can change the paneling all you want, that platform underneath the GT, G2X, Sky, and Solstice are all the same. The mounting points change slightly, but not so much so that it eats into the engineering budget.
Pontiac was just a sales channel, not a brand. Simple creases in the body panels fuel some people into thinking that the Solstice and the G8 were something different, something unique. They aren’t.
GM makes platforms. The brands are just sales channels for the platfomrs. Marketing and advertising make foolish people think Pontiac was all about affordable performance.
Simple. The same works for every other sales channel.
Personally, I’ve always thought the Sierra was bettering looking, but only starting with the 2007 model year on up. I actually prefer the new silverado over the Sierra, but only the LTZ trim level.
Comparing the Sierra and Silverado is like comparing Chevy and Cadillac. GMC is more luxury than Chevrolet, not to say that base Sierras can’t or aren’t used as work trucks, but Chevy is the brand that offers the work truck package, unless I’m mistaken.
On the Ford side of things, they don’t have a Cadillac equivalent. Sure, they have Lincoln and Mercury, but let’s be serious. Mercury? Lol. And Lincoln’s attempt at a truck was (is) an absolute joke and hardly sold at all, and only sold to rich pricks who don’t actually have a use for a truck.
Sure, I would like to see projector headlights on Chevys, but any true DIY’er can retrofit the Sierra system onto the Chevy with enough effort.
I feel like Michael either has a hard-on for Ford or he feels he was wronged in some way by GM and can’t resolve it.
Ford killed Mercury years ago. That was the right move. Lincoln is now more competition (hold the laughter, please) for Buick these days than it is for Cadillac. And even then Lincoln is fighting in a weight class above its station.
If you read Bob Lutz’s book “Car Guys vs Bean Counters” you will realise that offering things like projector headlamps in GMC and not Chevrolet was (and apparently still is) GM’s idea of “brand identity”. There are people at GM who believed that only Chevrolet could have 5-spoke wheels and only Pontiacs should have open headrests. It’s these irrelevant ideas that got GM in trouble in the first place. VW doesn’t have these restrictions on what its brands can have and can’t have. They allow each brand to chart its own brand identity. The result? They are able to sell crappy cars at serious profits. GM has learnt nothing from their recent fall from grace. Remember I said it. They will fall again if they continue with this nonsense.
GMC is around for a number of reasons.
Much more profitable than Chevrolet.
GMC buyers have a significantly higher income than Chevrolet buyers.
GMC gives the Buick dealers a profitable truck line to sell and keep them fiscally sound.
IF GM dropped GMC the GMC buyers would NOT all go buy Chevrolet trucks and GM would lose sales.
As far as Chevrolet having uplevel features. Chevrolet is a value brand and should remain so. And it is doing great where it is at.
I will say reading the Michael comments cracked me up. Just because one brand talks about “professional grade” does not mean the other brand is junk. It is jsut marketing Chevrolet to a different buying segment.
You sir, win the internets.
I would love to shake Michael’s hand. He has said it far more eloquently than I would say (or have been saying). These trucks are a DISGRACE to the new GM. Those guys at the truck division need to stop playing us as if we’re characters in the story “The Emperor’s New Clothes”. Stop trying to show us the same crappy design that we have had to live with for the last umpteen years and calling it “new and bold” and using a host of other rhetorical mumbo jumbo. These trucks are has-beens before they even hit the market. To hell with Sierra and Silverado. My money is on the new Colorado/Canyon and if they mess that up the way I am suspecting they will (after seeing the recent spy shots), then it’s off to Ram I go when it’s time to haul anything larger than a suitcase…
I agree the Sierra is better looking. Its marketing aims for a higher paying customer with luxury touches.
Suppose we go and look at the price comparisons between the two….
As someone stated before, the costs of two different stamping dies is tremendous. Which makes me wonder why, if they are going to spend the money, don’t they differentiate them to the point where the average person might notice the difference? The hood and all four fenders are unique to Chev or GMC, but 9 out of 10 people probably won’t notice. It’s likely that with the volume of parts needed for these trucks, two sets of stamping dies were needed anyway, so it probably didn’t cost much more to make minor changes to one set and call it GMC.
I was hoping to see more differentiation in the interiors, backlighting color and aluminum trim might differentiate trim levels, but not brands. Also, projector headlamps, forward collision alert, lane departure warning, and safety alert seat will be available on the Chev High Sierra (some on LTZ), so I don’t see any content differentiation at all.
The cost may not be as much as you think for the die. I bet a lot of the components are carried over from the current gen trucks (die block, stripper plate, etc), or have been modified.
Also, if you start mucking with the exterior design too much, it really starts affecting dimensioning on the inside of those body components to the point where mounting locations might be significantly different and even engine bay layout clearances could change.
good point – although most of the parts of the truck we see have changed at least a little, I agree that many of the “hard points” (bolt hole locations, most dimensions) have not changed to minimize tooling costs. Not really anything wrong with that, continuous improvement is often better than starting from scratch. I just wish they made more of an effort to make it look like they did an update. The current trucks have much more differentiation in the fenders and tail lights than the new ones, kinda bugs me that they keep saying the new ones have more differentiation than ever before!
I think he has read too far into the ad campaigns.
And, if GM just stopped selling the Sierra and pushed the Silverado, good luck transitioning every Sierra owner over to Chevy. Wouldn’t happen.
This is the same old story from people who don’t understand. This redundancy is vehicle lineup has created a tradition among consumers.
If GM thought they could just save all the GMC sales over at the Chevy lots, Pontiac would still be here, they had more individualism with the G8 and Solstice than GMC does with their lineup. But it wouldn’t happen. Pontiac was shuttered and GMC remains a sales, and more importantly profit, haven for GM.
I really wish this conversation about GMC would just F’n die, it’s one of my biggest peeves. I almost didnt even open the article because it’s always the same BS opinion, no offense. Yours had more substance than most, but still the same song.
The one persistent defense of GMC has been its supposedly greater profitability over Chevrolet. I’d like to challenge this notion.
Why and how is a Sierra or Yukon more profitable than a Silverado or Tahoe? I personally have never seen any evidence to support this notion, which seems to be widely accepted among GMC fans.
The one big way I could see GMC being more profitable is development costs fall to Chevy, so the break even point is next to nothing for GMC.. Just like what Buick is doing with Opel.
Andrew — that’s the only way I can see GMC being more profitable… but I think we can both agree that that is not a real nor healthy metric.
Alex I kinda want to know what’s your take on the F150 and the Mark LT
Gmc pays for their part of the tooling on a vehicle volume percentage.
They are more profitable per truck because they sell more highly contented / more profitable trucks. GMC marque has a higher brand equity than Chevrolet.
@62vetteefp that’s good insight. Thank you!
I, for one, wonder the following as it relates to profitability:
1. Since GMC sells more highly-contented trucks, is GMC more profitable, or is it that its revenue/gross simply is higher?
2. If GMC weren’t around, would the profitability and brand equity benefits would carry over to Chevy?
Obviously, some very open-ended questions that might provide some food-for-thought.
GMC has a higher brand equity that allows them to put more profitable content into their vehicles because their buyers will pay for them.
An example is a sunroof. Say for every sunroof GM sells makes $200 profit.
Say Chevy sells 10% penetration so they make that $200 on 10% of their sales.
Say GMC buyers have more money and 60% of their trucks have sunroofs and make $200 on 60% of GMC trucks sold.
And then Cadillac has the sunroof standard and make $200 on every Cadillac truck sold.
Now we can see how the higher brand equity vehicles are more profitable. Now take this to LED headlights and every other feature.
Also do you think that if GM got rid of Cadillac trucks that those buyers would go out and buy a Chevy truck with the sunroof and GM would make the same money because more buyers would get sunroofs?
NO, GM would still sell chevy trucks with 10% of them with sunroofs and the ex Cadillac buyer will go somewhere else.
And you can see in the comments above that, no matter what you think there are buyers who see GMC as being upscale from Chevy.
Remember it does not matter a whit what you think or what your opinion is but what the market actually does. And the market DOES pay more for GMC trucks than Chevy trucks.
I bought a GMC over the Chevy (2011 2500 HD) just to stay away from that horrible chrome grille. 😀
I am not a GMC fan but an ex employee.
Buicks and GMc’s make more money per vehicle than their counterparts at Chevy.
Cadillac makes more money per vehicle than their size counterparts at Buick/GMC.
I have stated the reasons earlier.
The arguments for having the two brands around is pure arrogance. As a Yukon owner, I laugh whenever someone states that we GMC folks wouldn’t replace our trucks with a Chevy. Some people at GM really need to start looking at how much this strategy costs operations. Believe me – the GMC profit argument is simply a shell game.
Anybody remembered the Mark LT and the F150 twins???
GMC has no reason for being. Profesional grade is a sham that the FTC should take action against GM on as falsely advertising the same truck as a Chevrolet as somehow being better.
lmao what!? Where specifically do they say a GMC vehicle is better than it’s Chevrolet counter-part.
Do you fully understand false advertising and deceptive tactics?
I have always liked GMC’s better or I should say GMC big trucks. But I do think that their should be a bigger differents between them now my idea is that GMC should just build trucks 2500 and bigger so like 2500-3500-4500-5500-6500 and if we’er lucky 7500. now I know that mite be to much to ask but that is what I would like. JD
Some of you people crack me up. Who cares if they market “Professional Grade”. Back in the 90’s “Like a Rock” was their trade mark. Should someone have sued them, too, because they were not as tough as rocks? My god, I think some of you just like to complain.
By the way, when I say they, I mean chevy. Not GMC
GM builds two (mechanically) identical trucks under different brands and holds one out as being professional grade and sells them for more, even though they are actually the same grade. One could argue what professional grade actually means but the intent is to make buyers think that the truck is a step above. If it is in fact not better, which of course they are not, and if GM knows it , which of course they do, this is intentional deceptive advertising.
This is the second time I am posting this in this article’s comments. Just like the other person, you don’t have a clue, and have really misinterpreted their marketing slogan.
“lmao what!? Where specifically do they say a GMC vehicle is better than it’s Chevrolet counter-part.
Do you fully understand false advertising and deceptive tactics?”
It’s actually surprising for you, since most of your comments are a little more ‘nut job-esque’ and this is actually pretty subdued.
GMC gives GM between one and two thousand more “storefronts” very many of which are dualled with Buick. Ditching GMC would erase those storefronts, seriously damage the viability of the Buick franchises and invite them to bring in yet more foreign brands. And it isn’t automatic that Chevy dealers in many of those locations would be able to pick up the slace especially with regards to service which is a huge truck issue. Reading a lot of these comments convinces me that many do not even begin to comprehend the importance of the retail dealer network as it relates to brand performance.
The actual reason GM gave me for having two truck lines is so single brand Cadillac dealers don’t have to carry Chevy trucks. I fought to get one truck or the other killed for 15 years, all to no avail. Now, with the bankruptcy and multiple brand elimination, there is less reason than ever to carry both names. I would dump the Chevy and make GMC the only truck brand and make it into a division unto itself.