Luxury Trucks Boost Average Transaction Prices for GM
As more customers shell out the cash for a luxury truck, GM is benefiting from more profits per vehicle sold
Historically, pickup trucks have been regarded as working-class vehicles. In many ways, they still are. However, a new wave of luxury pickup trucks with premium prices has begun to emerge in recent years.
General Motors’ recent quarterly earnings report adds more evidence in support of this trend. During that report, the automaker revealed that the average transaction prices for its full-size trucks have significantly increased.
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Compared to the previous generation of the Chevrolet Silverado and GMC Sierra, transaction prices for the modern renditions of these two models has increased $5,800. That provides GM with a lot more profit than it traditionally receives from its trucks.
It’s also a more lucrative profit per vehicle than many of its competitors receive from their trucks. While rival automakers offer discounts and incentives to encourage customers to buy a truck, GM has limited these offerings to maximize the profit of each Silverado and Sierra sold.
As far as luxury truck purchases go, the Sierra is outpacing its Silverado cousin. GM reports that 95 percent of new Sierra trucks sold have been “high end models,” such as the Denali trim level.
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Trucks aren’t the only segment bringing in more profit for GM. SUVs and crossovers are also experiencing higher transaction prices and sales volumes. Of the reported 665,000 new vehicles GM delivered last quarter, and estimated 80 percent were either trucks, crossovers, or SUVs.
For now, GM is limiting its Silverado and Sierra offerings to the crew cab body configuration. When it does add double-cab and regular-cab options to its lineup, the profits produced by these vehicles could very well grow even higher.
News Source: GM Authority
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