GMC Customers Don’t Want A Luxury Brand38
The utility segment continues its expansion into the luxury space with more comfort features, more technology, and correspondingly higher prices. That said, GMC customers don’t want a luxury brand, as highlighted recently by Global Vice President of Buick, GMC, and GMC Hummer EV at General Motors, Duncan Aldred.
During a recent media presentation, Aldred provided some insight into the GMC brand and how it connects with customers, saying that GMC customers want a brand that’s luxurious, but still grounded.
“I always say that you can go to a job site, worksite, and then go to a red carpet event with a GMC,” Aldred said.
Despite this, GMC’s average transaction prices (ATPs) are approaching the ATPs seen in the luxury segment thanks to strong sales of AT4 and Denali models. As GM Authority covered last week, GMC AT4 and Denali trim levels made up nearly half of all GMC sales last year, with the two sub-brands combining to account for nearly 46 percent of all GMC sales during the 2022 calendar year. The ratio was even higher in Canada, where AT4 and Denali sales accounted for 55 percent of all GMC brand sales.
“GMC as a brand from Terrain all the way to Yukon average was just below $60,000 for the entire year,” Aldred said. “And if you break that down, you can say ‘what did that do for Q4 because it was rising all year as well,’ well it was more like $64,000. So GMC’s average price for the brand was $64,000 and […] that really puts us into the luxury space in terms of the average price paid.”
Beyond the pricing, Aldred maintains that GMC has its own space in terms of positioning.
“A lot of that has been driven by really consistent brand positioning, because GMC knows what it is and has been very consistent in the delivery that we are professional grade, capable, and precisely crafted vehicles that really can be driven anywhere for any event,” Aldred said.
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I see their point, but GMC to me has always been the middle-luxury brand of GM. Chevy the economy class, Cadillac the most luxury, and GMC the semi-luxurious and more powerful work truck brand. It would be the truck I’d buy to pull my camper, be comfortable on a long road trip, and take to a nice work event.
I agree. If you watched the premier of the Sierra EV, you hear them refer to GMC as a “premium” truck brand a few times. That alone comes with some “luxury” expectations as to better quality and experience compared to a mainstream brand. Since GMC is also a regional brand that is purely all profit for GM, one would expect some specialty or brand specific models or items that you can’t get on mainstream counterparts.
Unfortunately, this has never been the case for the brand, as anything you see on a GMC model will appear on a Chevy likely in a few months or year after it’s release. GM has not allowed them to function as a true brand, as they’ve withheld models from the lineup, so they don’t “cannabilize” other brands or don’t see it as profitable. Yet they allow Cadillac to build engines and models that they can cancel only a year after their release. In some cases I’ve wondered about certain models and how they were greenlight (i.e. current and next gen Terrain, along with current Acadia), they weren’t true upgrades to their roots but were clearly sidelined by their Buick counterparts.
Seeing the spyshots of the next gen Terrain and what the man running the show has deemed beautiful before has released, I’m sure it’ll be jawdropping in the wrong way again. I’ve seen some design sketches and concepts of GMC models that were truly exciting, only to be let down by what makes it into production. I don’t doubt that GMC will continue to print money for GM as a whole, but they shouldn’t be handicapped so that they aren’t allowed to compete so GM can feel better about its other brands.
Make me a practical car that serves me, not a luxury car, and after two years I go with it to the workshops. For this reason, Toyota is the first in the world. Low costs in the industry, without specifications, only quality, and people love it, and global sales.
Toyota’s formula works for poor countries, where people can’t afford repair, and they can’t afford nice cars.
People in Europe don’t want a boring, uncomfortable, slow car, particularly with the taxes they pay, so Toyota is in 6th place there.
People in the US and Canada want full size trucks and SUVs, and an increasing amount of people who don’t want big cars want electric, so Toyota is in 2nd or 3rd place. On top of that, people who don’t care about cars and will settle for something plain and boring are going Hyundai/Kia because they’re cheaper than Toyota, which is in 5th place.
Back in the 70’s and 80’s Toyota nearly put the big three out of business. Wake up GM.
g wright: Sure. And back in the 40’s Japan bombed the US at Pearl Harbor. So what’s your point? My thought is that the US should tax the heck out of anything from Japan and make it as hard to sell their stuff here and they make it for us to sell in Japan. Wake up America!
Why would you tax it? That makes it more expensive for the consumer. People want choices, and domestic offerings aren’t always the best choice. The government shouldn’t be steering people’s choices. U.S. companies need to compete better. Make your cars using the Toyota model of TQR-Total quality and reliability not planned obsolescence by appealing to Wall Street. It’s really not that hard. If they did that you wouldn’t have to worry about Wall Street.
reality check: You best ask that to Japan.
Barry Croft JR: Take off your tinfoil hat. I think your head is over-heating.
We drive a Denali because it is nicer than the Chevy and not as expensive as the Cadillac.
Call it what ever you like but it is the right price and comfort for us.
Nicer in what way? A better front bumper? That’s basically the only difference. I’m still not sure why GMC even exists over Chevy these days.
Better interiors, Super Cruse, Heads Up displays, cooling seats. Some models electronic suspensions.
If you study the differences GMC offer standard more features and often features Chevy just never gets.
It is clear that the Denali line which accounts for near 48% of the GMC line has a higher ATP and makes GM a lot of money.
In fact I did not notice this till I have owned several but people do not say Oh you bought a GMC, they say oh you bought a Denali. Name equity like that is tough to earn these days. Cadillac had it and lost it and is still trying to get it back.
I have a local dealer that was Pontiac and GMC. Now they are a stand a lone GMC and refuse the Buick. They have made more money with GMC only than with the other divisions. Their average transaction is now over $70K.
Not better, fancier yes.
With available features not available on Chevy better.
Traverse has no Hud, Cooling seats, Real wood trim or electronic suspension but GMC does. There are other features too. It is enough to get people to pay more.
Between size and features we chose GMC.
I disagree with ‘more features’. I ordered a Chevy High Country so I could get the Max Towing Package and the 2 speed 4WD. With the GMC, you can only get 1 speed 4WD, and in fact, now you can no longer get the Max Towing Package on the Denali. Even the SLT only offers the 1speed 4WD. Big disappointment! I love the GMC front end, but it pretty much stops there.
I also have every feature that you mentioned. Very happy with my High Country, but I still like the Sierra front end better.
GMC has the more plush interior, which I don’t need in a truck, it’s a tool. If I need more plushness I drive the Premier. Plush trucks are an expensive luxury, in my opinion. A WT with the right drive train gets the work done very efficiently.
Wow Carl. You just described a TRUCK!! haha. Not these way over-priced pavement warriors people are buying today to say they drive a truck.
GM’s problem here is that they are nearly all SUV/truck now. With that, you then have Buick and GMC mostly in the same dealerships and with way too much overlap. They have even taken Chevy (IMO) way too high up the food chain, thus overlapping even more. Again, IMO, why have an Escalade when you can have the Denali for less or a similar Tahoe/Sub for way less? And they are all trucks and/or SUV’s. The only manufacturer out there that’s worse is Ford where they have made Lincoln obsolete.
GM should have left Cadillac and Buick with the sedan market and Chevy and GMC with the truck/SUV market and never brought Hummer back! Lincoln should be sedans only and let the trucks/suv’s to Ford.
The only overlap is MAYBE the Terrain and Envision, although these are not mechanically identical like the Terrain and the Equinox are, and they feel completely different.
The Enclave is bigger than the Acadia being on a stretched platform of the latter.
The rest of GMC is BOF and Hummer EV, the rest of Buick is compact crossover.
J Roy: Although you are technically correct, you are missing a huge part of the equation here. How many people going into dealers do you actually think know half what you and I know when it comes to vehicles, platforms, etc? So the real problem is that GM has flooded the market with way too many overlapping products. Examples:
1. Encore, Encore GX, Trax, TB are all basically one. But you then have the Terrain, Equinox, Envision, Blazer, XT4 and XT5 that are extremely close. If you took the badges off every one of those boxes and lined them up, how many people from 10 foot away would be able to distinguish any one of them?
2. Enclave, Acadia, Traverse, Tahoe, Yukon, Escalade are all very similar in overall size with the Acadia just a little smaller. Again, do the 10 foot debadged test and see what happens.
3. Suburban, Yukon XL and Escalade ESV. Basically triplets with subtle changes.
Please tell me there’s no overlap.
Luxury at GM is better define By options or available options.
The Chevy I can get a set amount of options and features.
The GMC has more standard and available.
Then the Cadillac has some more or they are the first with some items.
You can get a nice vehicle with all three but the number of features grow with price.
but it is
When I look at GMC, I expect a step above Chevy in quality, performance, durability, and power. Is that “luxury” as automotive companies see it? I don’t know, but it is a better product.
The difference between GMC and Chevy trucks seems to be cosmetic. The frames and drive trains are the same so no difference in power or reliability. Professional grade is a sales pitch.
Perhaps it differs among the sister vehicles. I had the Equinox/Terrain in mind with the difference in transmission and suspension. The Terrain gets a 9-speed whereas the Equinox only gets a 6-speed. Also the Terrain Denali gets a supple suspension upgrade that even the Equinox Premier does not get. I don’t think that makes the Terrain luxurious, but it is ever so slightly refined.
GMC doesn’t need to be a full line luxury brand, but make no mistake it still needs to offer ultra competitive luxury models. Since Cadillac doesn’t offer a pickup truck it leaves GMC to be the torch bearer to compete with Ford and Ram.
GMC has always been the more fancy Chevrolet.
The difference is without actual sedans and dare I say coupes GMC/Buick cannibalize each other’s “SUV” crossover sales.
I may be a boomer at 31 but it was always Chevrolet bread and butter. Pontiac was the sport offering. Buck was the luxurious one with Cadillacs being the flagships.
GMC was in years past a higher featured truck brand.
Although the High Country is eating into Denali sales considerably, it’s still mostly true today.
GMC used to be general motors wealthiest buyers. They didn’t want the ostentation of Cadillac and it’s obsession with pop culture. Unfortunately now Chevrolet wants cannibalized GMC and every way possible and GEM is pricing itself out of its traditional buyers pocketbooks. In 15 years GMC vehicles have doubled in price. Unfortunately, average pay has not! I’m currently trying to find a new vehicle and unfortunately, The few GM products I’m still interested in in any fashion, overlap vehicles I would much rather be seen in. 107,000 for a Sierra Denali, or $90,000 for a year old S63? GM still can’t design rear air vents for back seat passengers at that price range! No offense but used is starting to make more sense! Especially when you don’t have to pay for GM’s mining of your personal life for financial gain via OnStar.
GM has consistently missed the boat at being the number one selling truck in America because their pride never allowed them to drop the GM name sake and offer Chevy in premium packages. The harsh reality is that most Americans know they roll of the same assembly lines, and are more loyal to G.M. than the specific brand. 30 years ago the difference meant better service at the Cadillac dealership, so the added incentive and premium to buy GMC over Chevy was worth it. Not so much today.
Bragging number one is just that. Making more money with a higher level brand of the same truck is what wins the game.
Don’t mix emotions with business.
It is not a matter of pride but Profit. In the bail out the profits are what kept GMC around not pride.
Ahh but it is a matter of pride, and for some inexplicable reason, emotions there at GM do drive business decisions. It was the reason they had eight too many brands that they were forced to part with during a forced bankruptcy. Redunancy costs money.
GM sells more full size pickups in North America than any one else. They don’t get the “#1 truck” flag because they don’t package all their trucks under a single “series” identification like Ford does. Ford’s claim is always “f-series is the #1 selling truck” and media always misquotes that at “F-150” is the best selling truck. It’s not.
Reality Check. Not sure who you’re arguing with,but I said as much myself. Pride has gotten in the way of GM claiming that title because of one too many brands.
GMC has been the Buick and Pontiac of the trucks. Lower volume and a little more than the Chevy and little less than the Cadillac.
GMC of late is and has been working to be more than a grill change. Often the body panels and interiors now are different.
GMC has offered in the past larger engines and awd that Chevy did not.
GMC has in the past offered the extra content. the higher priced models get more the lesser priced Denali models get less.
Case in point now most Denali get HUD and real wood trim. They get specific trim and now they have made a higher level Denali now that has a different chrome.
There are buyers out there that tend to buy the top level models. The Denali has that offered in one package.
The other thing is while it may cost more often trade or resale on a Denali id more too. You get back what you put in.
The bottom line is the Denali and GMC brand makes money! That is what it is all about in the end.
The rest of the GM brands could use a image boost as the GMC line has.
I DRIVE, GMC SLT trucks and I normally trade every year have been for the last eight years as my dealer tells me the reason gm is selling so many Denali and AT4’s is that’s where they’re putting all the chips!! he has on his lot five SLT‘s with premium plus package, and the rest of what gm is sending him are high end vehicles and gmc is forcing me to look at Toyota and ram as my replacement trucks
Don’t get me wrong. I appreciate and read all the comments. Like myself, I look at many of them as being opinions or opinion-based. I’m glad people come on here and exchange their views.
I’ve said it before and got bashed over the head for it, but I’ll say it again. GM needs to drop GMC. Give the Denali “trim” to Chevrolet and those buyers will then go to the Chevy store. The rest is a waste. Every product GMC has, Chevy has too. And now that GM made the stupid decision to make Buick all SUV, they have most of what GMC has with a couple smaller. So why have them all? GM would be a much stronger company with just Chevy, Buick and Cadillac.
If not kill GMC, then kill Buick. But this overlapping of nothing but SUV/CUV’s and trucks is just stupid. And don’t even get me going on Hummer. It was 100% stupid the first time and even more stupid this time.
Lastly, some on here have described luxury as having more features and goodies. You can throw more stuff on the most basic vehicles and it doesn’t make it luxury. Loaded up and luxury are way different things in my book.
GMC has always been a brand that is set apart by it’s nicer materials and upper trims. Its not a true “luxury” brand, but it does occupy the space in some ways with the Denali trims. The downside is that they handicap it to avoid stepping on the toes of Cadillac and Buick.
I’m curious to see what happens with the brand now that Cadillac is fasttracking its way to electrification in the NA market, while killing off certain models in their lineup. With the higher price tags that will undoubtedly be associated to Cadillac, where will those customers go? Not everyone is willing to go full electric and it seems Cadillac is determined to make standalone ICE models for China, why not give GMC more standalone ICE models for the NA market?
GMC has proven to be a money maker and could outpace other GM brands, if given similar budgets while allowed into every segment. They have held off giving it a subcompact model fearing it’ll cannabilize Buick, while missing out on shoppers that would never consider a Buick in the first place. GMCs ruggedness is along the lines of Jeep and Land Rover/Range Rover, the brand should have always been positioned to compete directly in those segments. They still have a chance to give it more life.
Hand the Alpha platform over to GMC and allow them to actually be a brand versus being Chevy+. At this point it’s a winning solution, as they would be able to separate it from Buick and Cadillac while keeping down development costs.