GMC Works to Carve Niche as Seller of Premium Trucks, SUVs

February 24, 2020 by Jerry Hirsch, @Jerryhirsch

GMC wants to stand out in the auto market by positioning the brand as a premium seller of pickup trucks and SUVs

That gives GMC distance from its less expensive Chevrolet sibling. And it provides a way to attract upscale consumers who are willing to pay more for their vehicles. Both GMC and Chevrolet are part of General Motors.

The strategy is working. Wall Street analysts say GMC has the highest profit margin among the GM brands. Its average transaction prices approach the mid-$50,000 range, rivaling luxury automakers such as BMW and Audi. caught up with Duncan Aldred, vice president of global Buick and GMC, when the automaker introduced the redesigned 2021 Yukon in Vail, Colo., in January. Here is an edited version of that conversation.

You call GMC a premium truck brand. What does that mean?

We define GMC as a premium truck and SUV brand that is built on the platform of bold, capable and precisely crafted. That’s the essence that goes into everything we do. When we design or talk about what content every GMC model will have and how to engineer it, we want the product to be bold, it’s got to be capable, and it’s has got to be precisely crafted. You see that in the 2021 Yukon. This is a brand where people who traditionally purchase in the mainstream of the industry aspire to move up to it. And people who have historically been tier-one luxury buyers would be equally comfortable moving into GMC as well.

It also manifests itself in the technology we put into the vehicles. We have a lot of industry or segment firsts – things like rearview camera mirrors, the carbon pro box on the Sierra and then the ride capabilities on the new Yukon. We always inject technology.

The Sierra pickup truck is your best seller, but you also do well with SUVs. Where does the new Yukon fit?

Our SUVs are competing in the biggest segments in the industry globally. The compact SUV Terrain and the midsize SUV Acadia sell more than Yukon. But the Yukon is a hugely significant seller for us. That’s not only in volume but obviously in terms of business because the average price paid is very high. And when we look at Denali sub-brand, the Yukon has one of the highest sales of any vehicle we do. About 60 percent of the Yukons sold are top of the line Denalis. It is a very, very important vehicle for us.

How is the 2021 Yukon different from its sibling, the Chevrolet Tahoe SUV?

There are a lot of differences for how we go to market. Visually the vehicles differ. Technologically, you’ll find a lot more standard content across the GMCs. Look at what we have done creating a completely unique interior experience for the Denali. But of course, we are going to enjoy efficiencies across brands and across platforms like every OEM (automaker) does when they have a portfolio of brands. But I think what we are doing with GMC here is crafting something that is uniquely and purely GMC.

Denali is a big seller. You also are offering the AT4 sub-brand. Explain the sub-brand strategy.

Denali started as just a trim level. It then started to evolve. By the time I got involved in 2014, it made up about 19 percent of GMC’s retail sales. It was clear to me that the equity around Denali, even at that time was, was huge. You know, people often say, “I drive a Denali.” You have to press them about which Denali and they say, “I just drive a Denali.” It’s not important which model it might be. You could already see the equity in there and really by just putting more focus on it from a marketing point of view, a distribution point of view, and from a design engineering and product point of view as well, we have accelerated that growth to 30 percent of all retail sales last year.

We also saw an emerging trend of buyers who liked the more rugged, more capable type of SUV or truck. But they wanted it to be premium also with all the technology that you associate with a Denali. That’s why we created the AT4 sub-brand. It pioneers premium off-road. It was a success in its first year representing about 20  percent of the sales on Sierra. Both AT4 and Denali are now crucial to our business.

For 2021 all of your models will have a Denali or AT4 option. Do you see an opportunity to add another sub-brand to GMC?

Well, there’s always opportunities and nothing we’re going to confirm today. The other thing we’ve got to guard about is keeping GMC as the preeminent brand. Everything must elevate that GMC brand as well. So Denali is doing that. AT4 is doing that. We’re always going to be responsive and forward-thinking terms of the market place and then improve what we’ve done in the past and, but there’s nothing to announce today.

Jerry Hirsch January 30, 2020
General Motors will relaunch its behemoth Hummer as an all-electric pickup truck under its GMC brand.

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