The U.S. automotive market is expected to post only its second downturn since the end of the Great Recession, a decline that likely would be worse if not for surging demand for pickups of all sizes and price points, said Sandor Piszar, the marketing chief for Chevrolet trucks.
If anything, Chevy and sibling brand GMC are struggling to meet demand for their latest line-up of midsize, full-size and heavy-duty pickups, Piszar noted during an interview with TheDetroitBureau.com, a situation that last week led parent General Motors to announce a $150 million expansion of its truck plant in Flint, Michigan.
As always, demand is being driven by the “core” audience who want trucks for work and need lots of towing and cargo capacity, said Piszar. But there’s a growing market among non-traditional buyers who see a pickup as an alternative to a sedan or coupe and, in many cases, a luxury car. And those buyers “are demanding more” high-line features while also accepting fast-rising transaction prices. Chevy moved up-market with is latest trim level, the Silverado High Country. But it is exploring the potential to reach even higher, a move that could see it offer the first truck to top the $100,000 mark.
Archrival Ford has already nudged close to that mark, a fully loaded version of its F-250 Limited now going for around $97,000.
(GM rams $150 million into Flint plant to up HD truck production. Click Here for the story.)
“People want to trade up,” Piszar said during a media event offering the first drive of the all-new 2020 Chevy Silverado HD line. “If customer want a more expensive truck” than what the bowtie brand already offers, “We’ll deliver it.”
Asked directly whether a $100,000 version of the Silverado – likely an HD model – is in the works, Piszar demurred, saying he couldn’t comment on future product. But “Chevy wants to provide what customers are asking for” he stressed.
There still are customers demanding an affordable truck, and the entry version of the 2019 Silverado starts at $29,795, including a $1,495 delivery fee. But few buyers are opting for those base models. That has led the automaker to granularize its line-up, with eight different light-duty variants, and five versions of the new 2020 HD line.
Chevy is also expanding its array of powertrain alternatives, with three new engines for the light-duty Silverado – including a new 3.0-liter diesel that analysts expect to top 30 miles per gallon when formal EPA numbers are released in the coming weeks.
As has been the case since the earliest pickups came to market a century ago, buyers still put a premium on factors such as cargo and towing, as well as durability and operating costs. Chevy expects to nab the crown as the tow capacity leader, at 35,500 pounds for the diesel version of the new HD.
But the new Silverado line, and the HD models, in particular, have added a number of high-tech features aimed not only at improving the comfort of the vehicles but enhancing their work capabilities. These feature include an optional camera package designed to make it easier to tow by letting a driver switch between 14 different views. That even includes a “transparent trailer” mode which appears as if the driver could see through the trailer to spot upcoming traffic, or to help when backing his load up.
(Click Here for more about how strong sales of pricey pickups helped GM beat earnings estimate.)
The Silverado 1500 has won a number of awards for quality and reliability in recent years, and the latest version has helped move the needle for Chevy, though it faces some tough competition from the Ford F-Series, the segment leader, as well as the also-new Ram 1500 from Fiat Chrysler.
But the overall surge in demand for pickups has lifted the segment to record levels, pushing GM to take several steps to increase production capacity, most recently with the expansion in Flint. Piszar wouldn’t discuss what that would bring capacity at the Michigan plant up to, but noted it will add the capability to roll out another 40,000 HD models annually.
In what might be called a significant understatement, Piszar noted that the Silverado – and, to a lesser degree, the GMC Sierra – is a “major contributor” to parent GM’s profitability. The typical Chevy pickup carries at least a $10,000 profit margin, according to analyst Joe Phillippi, of AutoTrends Consulting, and is parent GM’s largest source of earnings.
So, there were serious concerns when Pres. Donald Trump threatened to enact new tariffs on cars and car parts imported from Mexico last month. One of the three GM pickup plants is in Silao, about 600 miles south of the U.S. border.
“We’re pleased everything worked out,” said Piszar, referencing the president’s announcement of a deal with Mexico that scuttled the threatened tariffs.
There are still some things that keep him awake at night, the Chevy truck marketing chief admitted, among other things, gas price hikes and economic downturns. But he said he is confident that “We can weather” the sort of economic slowdown that some analysts have begun to forecast over the next year or two.
(GM investing $24M in Ft. Wayne truck plant to boost production. Click Here for the story.)
Even if the suburban buyers that have driven the surge in pickup sales cut back, Piszar said, he believes there is enough of that core work truck customer that demand will remain strong and allow the Silverado line-up to remain a major financial base for GM.