Guess who's laughing now.
Buick, Chevrolet and Cadillac are all in the process of major revitalizations. There have been many successes and a few disappointments along the way, but overall things are looking up. Perhaps the one GM brand that’s been quietly surging is GMC. Yes, the very same GMC the Obama administration initially wanted GM to drop during the bankruptcy days. GM, to its credit, rightly objected to that request. It presented sales figures proving that rebadged Chevy trucks and SUVs were highly profitable.
That business model remains all the more true today. "We think of GMC as a niche brand for a very specific consumer mindset," stated Roger McCormack, GMC marketing director. "But it’s a 450,000-unit niche of profitable truck business." Specifically, it’s the Denali-branded GMCs that are the big movers. For example, the average GMC Yukon XL Denali transaction price is about $68,000. The Cadillac Escalade, however, starts at $72,690. Basically, those Denali buyers could afford the Escalade if they wanted one. So why don’t they? Because they don’t want to come across as being flashy.
This group of buyers also don’t want to be seen in a Chevy, hence choosing, for example, the Acadia over the Traverse. And because of this, GM is laughing all the way to the bank.