The recently-released GM second quarter 2018 earnings report confirmed something we already knew – The General’s trucks are driving the majority of its profits. So it would make sense that the plants that produce the outgoing-generation trucks would run over capacity during the transition to the all-new 2019 Silverado and Sierra.
“GM’s full-size truck plants continued to run at more than 100-percent, two-shift capacity to meet demand and maintain inventory for current-generation pickups during the transition to all-new full-size pickups”, General Motors stated during its second quarter earnings call.
GM’s 2019 Full-Size Truck Transition Strategy
GM is taking a two-step approach in transition to its all-new T1 platform trucks that involves:
- Continuing to produce the last-generation K2 platform Silverado and Sierra across three plants in limited configurations (Double Cabs with 5.3L V8 L83 engine) to satisfy demand and maintain inventory, and
- Ramping up production of the all-new 2019 Silverado and 2019 Sierra across two plants
So while the last-gen K2 trucks continue coming off the line, “The launches of the all-new 2019 Chevrolet Silverado and GMC Sierra remain on track, with the first highly coveted crew cab deliveries to customers expected in early August,” read GM’s Q2 earnings report.
As of Monday, August 13th, GM Authority has received a few reports from owners who have begun taking delivery of the all-new Silverado and Sierra.
Driving Strong Sales
Along with crossovers and sport utility vehicles, pickups continued to drive sales volume and market share for GM.
Combined sales of the Silverado and Sierra increased 8.25 percent to 391,948 units in the first six months of 2018, with Silverado sales growing 10 percent and Sierra sales growing just shy of 2 percent. Despite the healthy increase, the figure trailed the 451,138 sales of the Ford F-Series.
Sales Numbers - Full-Size Pickup Trucks - Q2 2018 - United States
|MODEL||Q2 18 / Q2 17||Q2 18||Q2 17||YTD 18 / YTD 17||YTD 18||YTD 17|
Vital To Profits
Strong sales of pickup trucks, along with CUVs and SUVs, is vital to General Motors’ bottom line, as these product lines account for higher profits than other vehicle types. It was recently reported that GM makes an average $17,000 per truck.
As GM ramps up production of the new generation Silverado and Sierra, higher demand for these new trucks could theoretically offset rising raw material costs, a circumstance that will trim $1 billion in profits from the automaker’s bottom line in 2018.