Just yesterday, General Motors reported a very healthy $2.3 billion in income on $35.5 billion in revenue for the third quarter of 2019. Leading the charge was the full-size GM truck lineup, which continued to build sales momentum through the quarter. Impressively, The General’s pickup lineup showed a noteworthy $2,200 increase in average transaction prices (ATP) from January thru September 2019 as compared to the same time period last year.
This is a further indication of how strong GM’s all-new full-size pickup trucks are performing. In fact, earlier this month we reported that full-size GM truck sales outpaced those at Ford and Ram during the third quarter of 2019, racking up a total of 738,638 units sold during the time period, a 6.3-percent improvement. Breaking it out, the Chevrolet Silverado saw a 16.6-percent increase, while the GMC Sierra saw a 28.9-percent growth, both compared to Q3 2018.
Sales Numbers - Full-Size Mainstream Pickup Trucks - Q3 2019 - USA
MODEL | Q3 19 / Q3 18 | Q3 19 | Q3 18 | Q3 19 SHARE | Q3 18 SHARE | YTD 19 / YTD 18 | YTD 19 | YTD 18 |
---|---|---|---|---|---|---|---|---|
FORD F-SERIES | -6.01% | 214,176 | 227,880 | 34% | 38% | -2.42% | 662,574 | 679,018 |
RAM RAM PICKUP | +13.79% | 161,635 | 142,044 | 25% | 24% | +22.77% | 461,115 | 375,583 |
CHEVROLET SILVERADO | +16.62% | 155,482 | 133,329 | 24% | 22% | -2.86% | 412,259 | 424,403 |
GMC SIERRA | +28.87% | 66,198 | 51,368 | 10% | 9% | +7.46% | 163,601 | 152,242 |
TOYOTA TUNDRA | -1.33% | 31,565 | 31,990 | 5% | 5% | -1.96% | 86,062 | 87,782 |
NISSAN TITAN | -49.22% | 7,386 | 14,545 | 1% | 2% | -32.84% | 25,412 | 37,839 |
TOTAL | +5.87% | 636,442 | 601,156 | +3.08% | 1,811,023 | 1,756,867 |
While the impressive GM truck sales performance can be attributed to a multitude of factors, the higher sales volume has undoubtedly contributed to the healthy rise in ATP. Additionally, we believe that the uptick in transaction prices was also the result of a carefully-planned launch cadence that involves delivering higher contented vehicles first while tightly controlling incentives.
The high-content GM trucks do play a role in the ATP growth. Per GM’s planned launch cadence, the more expensive, higher-contented Crew Cab models were first to hit the market, while the lower-content trucks in lesser trim levels and smaller cabs started rolling in months later. That’s where the incentives come into the picture, with The General limiting the really, really juicy deals to select models equipped with specific packages. Doing so has clearly had a positive impact on GM truck ATPs and, ultimately, The General’s profitability.
General Motors is applying a similar strategy to rolling out its all-new Heavy Duty trucks, the 2020 Silverado HD and 2020 Sierra HD. Crew Cab models with higher content are first to arrive, followed by lesser trims and smaller cabs.
But, at the end of the day, the biggest contributions to the impressive performance are simply the trucks themselves. Despite the constant bleating of some critics, the latest GM truck lineup is desirable for buyers, and the sales numbers and ATPs show just that.
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Comments
Queue the people who claim trucks cost more than they did 15 years ago
Isn’t that true, considering inflation of course. 🙂
Well they do to inflation, but even though trucks have stayed equal with inflation, wages are still catching up. Inflation on everything over the last 10 years outpaced job and safe growth. Things are starting to correct now though it seams.
I think the prices have gone up if you’re not a smart buyer. But if you’re not getting a minimum of 20% off you didn’t try very hard.
The ceiling certainly had skyrocketed. But there was a day, 20 years ago when leather, cd player and power windows and locks was loaded. Heated (leather only) seats? Dayuuum!
High desirability? Is that why the market share has slipped and since the first time, EVER, the Silverado is #3 of basically 3? I waited a long time for the t1xx. Drive a couple and ended up with a k2xx. The desirability is not high. I do like their looks, that’s it.
Que the “total 1/2 ton sales” comments. Never needed that excuse before.
Facts tell a different tale.
The YTD figures are skewed by limited availability of the new T1 trucks in Q1 and Q2. It wasn’t until Q3 that things started to run at full bore on the light duty side of the equation. However, HD supply during Q3 was very limited. Hence, Q3 is a very good barometer for the real-world situation for LDs, but not for HDs.
And even with that, the increases in sales speak for themselves. FCA is giving away the new Ram truck, while still selling the old model. Naturally those sales figures will be higher, with lower ATP – explaining why Ram outsells the Silverado. Ram is taking the route of the old, pre-bankruptcy GM of overproducing and over-incentivizing (every single Ram model had a rebate during all months in Q3, while only about 50% of Silverado and Sierra models had one during the same time frame). It’s not a recipe for success. It’s an easier, less stressful path on the sales operations side of the equation… but it certainly isn’t the best one.
Summary: even with lower rebates and less than desirable availability of HD trucks, GM managed to post very healthy increases in sales volumes for its all-new trucks, making for the best-selling full-size pickup truck franchise in the country. If that’s not high desirability, I don’t know what is.
Better yet, things should be even better once the strike-related inventory issues are addressed and HDs begin shipping en masse. And more importantly, I will bet that GM makes more from the Silverado in third place than Ram does from the Ram Pickup in second.
Ford slipped back a spot the year they introduced the new F150 too.
The money made here has a lot to do with the use of mixed materials in the truck vs going all aluminum. Ford took a hit in the income with higher material cost.
Ram has really discounted their way to the top. Like at Hyundai the lower prices attract new buyers.
Lol, Alex is a full GM spin doctor… Your thought process is really only shared by GM staff and share holders…
They’re not selling more full-size trucks than anyone else. Add up the Silverado and Sierra, still less than the F series for year to date 18 and 19. Ouch.
GM is trading on reputation by offering a sub-par product at a premium price, of course market share will drop but how sustainable is that? Not very, hence why the Silverado is in 3rd.
It’s not sub-par? Go sit in one or drive one. They ride like crap have fewer options than any other competitive truck in their segment and trucks like the High Country differentiate themselves from ltz trucks with bronze spray painted plastic trim pieces. You can’t make this crap up.
Their own previous gen K2xx trucks are significantly nicer. The cost cutting on the t1xx trucks is shocking and embarrassing.
So let’s brag to the consumers how much less they cost to make and how your ATPs are up because your discounts are smaller. That house of cards will collapse.
It’s like GMC dealerships. It stocking anything but SLT and Denalis and then bragging about ATPs. I couldn’t find a SLE truck anywhere, so I ended up with a Silverado LT.
Those nimrods can spin any fact into a delusion.
Sounds like somebody is drinking a little Mary Kool Aid.
” High Desirability” ,”Limited Availability” “Ram gives theirs away”?
A company the size of GM with a DIVISION the size of Chevrolet should have the resources to obliterate FCA yet GM’s flagship division trails a traditional also ran in sales no matter the reason.
LOWER ATP with higher sales still equals MONEY!!!
So throwing a “yeah but” excuse still does not discount the fact that GM came to market with a truck that is a shell of what a GM trucks used to be.
What you leave out is this.
The market is contracting and sales will be in a decline for a while moving forward as people hold on to them longer and just can’t afford much of the new models.
Because of this it is important to decrese cost and staffs to fit the future expected needs. Also the fact is you will have to make more money from fewer models sold. How do you do that cut cost and get a higher ATP per model vs discounting the profits away,
GM went for a long time with high cost and selling vehicles at fire sale prices. they were selling millions of car yet still went bankrupt.
There is no yeah but here. It is all about market conditions and forecast for the future that if not prepared for will bring the demise of some companies.
FCA now is behind on cutting cost so they are still looking for a dance partner. They have been rejected by many and deals have fallen though. Now they are talking to PSA who also has to cut cost to share things.
GM has put themselves in a place where they can pick and choose their deals not have to take what ever they can get.
So while the lower ATP may work today it will be the means to an end in the coming years as sales decline and you are just not getting the income though volume you once did.
When you look at things like this you have to use all the facts not just the ones you like.
Chevy Guy – call it however you desire. You call it drinking the koolaid. I call it smart business.
GM is selling more full-size trucks than anyone else AND at higher ATPs, and yet I’m the one drinking the koolaid. Is that bass-ackwards logic, or what?
“A company the size of GM with a DIVISION the size of Chevrolet should have the resources to obliterate FCA yet GM’s flagship division trails a traditional also ran in sales no matter the reason.”
The goal is not to move metal and units at any cost. The goal is to optimize sales volume and profits for ultimate profit maximization. GM is doing just that. In fact, GM already is obliterating FCA in cumulative sales AND in profits.
“LOWER ATP with higher sales still equals MONEY!!!”
No, it does not. Lower ATP at higher sales volume equals more revenue, but not necessarily more profit. There exists a precise and complex equation to maximize for highest levels of profit. FCA is dumping major incentive cash on nearly every Ram sold while also shoving cars into dealer loaner programs, only to sell them again but with even more discounts. Factor into that warranty costs that these vehicles will end up accruing, and you end up moving metal and close to zero profit… sometimes even at a cost. It’s what the Old GM did and ran into major financial problems, as C8.R mentioned.
So it’s not so much a “yeah but”. It’s more like smart business vs. dumb business. Aiming to sell, sell, sell for the sake of putting up the sales numbers is dumb business, and can ultimately result in more revenue but less profit (doing more work, making less). It’s not “yeah but” for the sake of making excuses. It’s “yeah but” for the sake of better results, which GM seems to be delivering.
On a separate but related note, there is a really good business understanding called quantitative methods that I recommend looking into. I took both available courses in business school and it pretty much is exactly this very topic.
You could not get delivery of a 2019 regular cab Silverado model for months after the crew cab and extended cab models were offered for first delivery. This means higher AVERAGE prices, not the model for exact model price differences. In fact, only the crew cab models were first offered for delivery, even before the extended cab models, so those higher prices paint a false picture of the apples to apples price spread over the number of months that prices are compared. . That’s what happened here in Canada, it might have been different for the U.S. Considering that a crew cab list price is about $4,000 more than the base WT regular cab 2 door, this means that the PRICES ACTUALLY DROPPED. I put off buying a new regular cab 2 door 2019 Silverado, for this reason, i had to wait too many months for delivery of a Chevy WT. Now i’m considering the 2020 gasoline with more torque and HP Nissan SD, which has a 15 inch longer wheelbase than the non-SD model. A bigger 5.6 liter V8 than the 5.3 in the GM trucks is another big factor.