General Motors Is Using Its Big GMC Profits to Invest in EV and Driverless Development
An article in The Wall Street Journal today traces the ascendancy of GMC among GM brands, to the tune of about $24 billion in revenue for 2017.
What’s GMC’s secret? According to the WSJ, the brand has found its niche selling pickup trucks and SUVs that are luxurious, but not overly flashy. As luxury sedan sales decline, these premium vehicles are becoming more and more popular, and they bring an exceptionally high profit with each sale.
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Even though many of GMC’s vehicles are nearly identical to Chevrolet models, the WSJ says the brand has leveraged an array of upscale features and tweaks to cultivate a reputation for quiet, “professional grade” luxury. The average GMC sold for about $44,000—$13,000 more than the industry average. In fact, last year more than 11% of all vehicles priced $60,000 or higher were sold by GMC—better than Lexus, Porsche, or Chevy.
The money GMC rakes in is allowing GM to invest more in autonomous and electric vehicles. GM is increasing its spending on autonomous vehicles to $1 billion in 2018, and the automaker also has big plans for electric vehicles—20 new models in the next five years, according to the WSJ.
One of GMC’s biggest sellers is the expensive Denali trim option, which accounted for 29% of all the brand’s sales last year. Later this week, GMC is expected to unveil the Denali version of its 2019 GMC Sierra, and it’s expected to be another enormous money maker for the brand.
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Source: The Wall Street Journal