Can Improved Fuel Economy Boost GM Truck Sales?
Though General Motors (NYSE:GM) continues rolling out its arsenal of 2015 trucks, the competition is showing stronger sales. A disappointing September called into question the automaker’s strategy with its high-end pickups, among them the Chevy Silverado LTZ. GM is hoping the improved fuel economy in its trucks appearing later this fall will pull in some of the business headed Ford’s (NYSE:F) way.
According to sales figures in September, General Motors was hurt by the performance of its pickups, the best-selling segment in the U.S. market. Chevy Silverado models still posted 32,506 units sold for the month, but it was an 11 percent drop compared to September 2012. It also represented a sliver of the dominant Ford F-Series performance of 60,456 trucks moved in September.
GM certainly hoped for much better results with its redesigned pickups. The company’s leadership is attributing the poor sales to higher transaction prices as well as supply issues. Kurt McNeil, vice president of U.S. sales for General Motors, told Bloomberg that the explanation was in the price points.
“No one was close to us from a price reduction standpoint,” McNeil told the news outlet. On the supply front, GM only has itself to blame.
GM executives explained the company was still getting trucks to dealerships to meet demand. Ford F-Series pickups, still in their 2013 model year, continue to outsell every other vehicle in the U.S. Though the industry slumped slightly as a whole in September, Ford’s pickups posted a 10 percent gain over September 2012 figures. Ford has sold nearly 560,000 F-Series pickups already this year, a 21 percent increase over last year’s tally.
GM’s new EcoTec 3 6.2-liter V8 engine has improved the fuel economy of the trucks that are debuting later this year, The Detroit News reports. The V8, which is capable of generating 420 horsepower on 460 pound-feet of torque, will be under the hood of the Silverado LTZ and the GMC Sierra Denali. It will bump fuel efficiency to 14 miles per gallon in the city and 20mpg highway in the all-wheel drive models, both improvements over the previous model year.
As Ford continues to post impressive sales with its pickups, the upgraded fuel economy in GM’s forthcoming trucks may help stem that tide. Investors will see the effects as they arrive in dealerships this fall.
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