Following the news about mid-size pickups announced at the Center for Automotive Research last week, General Motors (NYSE:GM) is delivering more encouraging information regarding its truck story. Aside from the excellent results on the 2014 Chevy Silverado and GMC Sierra, GM is selling more 2013 models — and at better prices — than the automaker expected, according to company officials.
GM North American Chief Financial Officer Chuck Stevens was spreading the word at the J P. Morgan Auto Conference on Wednesday, indicating the company is on top of its game in more ways than one.
“We like the way the year’s developed so far,” said Stevens, discussing the launch of the new trucks and selloff of the 2013 models, which were stocked heavily in dealerships anticipating greater demand as the transition to 2014 trucks took place this summer and fall. Noting the press wasn’t positive during this period for GM, Stevens reminded listeners of the foresight GM showed.
“[We] took action to make sure we had sufficient inventory,” Steven told conference-goers, adding it was a gamble to plan on stocking the 2013 trucks while the next generation was being launched in a somewhat negative environment. “[It’s] played out a little bit better than planned. We’re probably 20,000 to 30,000 units ahead. That’s one dimension of the overall truck story.”
The other parts of the story are being written in the higher average prices for which the 2014 line is selling, as well as the rate of production of the new models at GM plants.
“It’s one of the best launches we’ve seen, in recent past, from a General Motors standpoint,” Stevens said, noting the Silao, Mexico, plant was delivering excellent results. Stevens also broached the subject of profit margins with respect to its trucks, one of the areas where Ford (NYSE:F) has been winning with its F-150 Series trucks. According to The Detroit News, this goal is weighing on the minds of numerous analysts.
The news outlet reports GM is shooting for margins of 10 percent by 2015, which would get GM on a parallel line with Ford’s F-150 Series, the best-selling vehicle in America.
“Ford does a very good job selling … up-level trims,” Stevens told the conference on Wednesday. There will be a chance for GM to adjust the trucks hitting dealerships in the coming months, as the focus will be on its 2014 trucks while Ford sits tight until next year. Stevens also touched base on the successful Cadillac division.
“The strategy around Cadillac really is to grow here in the United States and China,” Stevens said. “Our objective is to double the size of Cadillac sales.” GM North America’s chief financial officer mentioned how the automaker needs to improve the scale of GM’s global operations, which would start with its efforts in China. Stevens even addressed the electric elephant in the room – Tesla Motors (NASDAQ:TSLA).
To the question of Tesla’s potential for disrupting the luxury car market, Steven said GM “certainly” believes it, saying that GM is making “fairly detailed” assessments of everything from Tesla design and interior features to the general business model of the electric car maker.