For a company that the federal government wanted General Motors to axe amidst the automaker’s Chapter 11 reorganization in 2009, GMC has done pretty well for itself. Last year, GMC sales soared nine percent year over year, but the real cash-cow is the company’s brand-within-a-brand, Denali.
Denali grew by more than 20 percent last year and more than doubled its volume since 2010, according to The Detroit Bureau. That accomplishment is even more impressive when you take into account that GM does not market the Denali nameplate specifically. “It’s largely all been organic,” says GMC marketing director, Roger McCormack.
Full-size SUVs return some of the largest profit margins of any vehicle in GM’s lineup. Joe Philippi, a consultant for AutoTrends Consulting, says most customers will pay more than $70,000 for a Yukon Denali XL, which according to him, “epitomizes the concept of obscene profitability.”
GMC targets “professional grade” buyers, who may be more affluent and in need of something fancier than what is offered by the mass-market Chevrolet models. Denali models take that idea a little bit further, offering options and equipment which are specific to Denali models.
The 2015 Yukon Denali features a powerful 6.2 liter V8 engine, GM’s patented magnetic ride control suspension, a heads-up display, HID headlamps, large 22-inch wheels, upscale interior appointments and active interior noise control. These exclusive amenities help attract a customer which GMC says is younger, at 44-years old, and wealthier, with an average household income of $134,000.
GMC claims the Denali brand has been able to attract a buyer which otherwise might have opted for a vehicle from a foreign luxury brand like Mercedes or BMW.
“The Denali customer is naturally attracted to the best of the best in whatever they’re buying,” McCormick said.
GM, now looking to capitalize on the Denali nameplates profitability, offers a Denali variant for every model in GMC’s model range. The diversified range has helped Denali sales grow from 32,886 units in 2010 to 75,558 last year.
Comments
Maybe its time to make Denali a official GM nameplate brand for the SUVs and let GMC focus on the trucks instead.
When you offer more Denali models than ever before (Sierra 1500-2500-3500, Yukon, Yukon XL, Terrain, Acadia) your sales should go up, which is what happened. It’s not like sales of just the Yukon Denali went up 20%.
No the fact is that sales in general at GMC are higher than they have been in years. Much of the increased volume is due to the Denali option package on most models.
Note too that it also has increased the transaction price greatly and that is pure profit.
Note too the Denali range is now offering option standard or not available on the Chevy line like heads up etc. This is going to set GMC more apart with more things. and models.
You can not and do not want to separate the Denali line as GM already screwed up and did that with Hummer. In the end it cost them a lot of money to close the line down. Here if sales ever dropped they could just eliminate the Denali line and just keep on truckin.
Keep in mind in some cases like the Terrain the Denali package is just a little chrome and stitching but on other models it is magnetic ride shocks, heads up and standard 6.2 with AWD not 4X4.
GMC is the 10th largest car company in the United States and one of the most profitable per unit sold. Denali is a big part of that.
I agree with you Scott. The Envoy Denali is my favorite GMC ever! Let’s hope that GMC/Denali will continue to offer outstanding value!
Not really value offered here as they are damn expensive. But they do offer an attractive package in a very profitable package. People want them and GM makes more money and it is a win win.
Also it helps drive a wedge between Chevy and GMC that helps set GMC more apart and the gap will grow as time goes on. GMC will come into its own more and more as time passes.
The Denali Yukon is not a bargain at nearing $70K but really is one of the best SUV models you can buy. This helps make it easier for people to shell out the extra money.
GMC has to be careful they don’t get too greedy with the Denali line as the price point is creeping up there. I bought a new 07 Yukon Denali in Scottsdale for $47K full load when they first came out with updated GMT900 style. It was a great vehicle but I wouldn’t pay upwards of $70K now, because your into Escalade territory.
Wife drives a 13 Acadia Denali and its beautiful but $50K price point is getting too high.
The Yukon Denali buyer is kinda in between the Tahoe buyer and the Escalade buyer. Someone who wants a little more then the Tahoe LTZ, but doesn’t want the Escalade bling factor or the drug dealer image.
With incentives and cash back programs if they keep Yukon Denali around $50-$60K they will do well, but any higher and I think you loose that buyer to another vehicle.
Price is too high, yet your wife bought one?
Sounds like perfect pricing to me;)
Business lease, its all a write off for her but IMHO its too high for what you get.