It's a brilliant strategy - and it's working.
Chevrolet recently lost its No. 2 full-size pickup truck sales spot to cross-town rival Ram, which is owned by FCA. GM didn’t take kindly to this. It even went so far as to say Ram beat the system because it counted the previous generation Ram 1500, now dubbed the 1500 Classic, as part of its first-quarter of 2019 sales alongside the redesigned 2019 1500. "The Ram pickup’s first-quarter sales victory over Silverado amounted to a hollow chocolate Easter bunny because FCA has been pulling out all stops to win sales,” a GM spokesperson said. It makes sense GM is taking this attitude because, until very recently, only Ford surpassed it in trucks sales.
But here’s the other issue with dropping down a spot: lost income. You sell fewer trucks, you make less money. Simple economics, right?
But GM has found a very simple solution to this, according to Automotive News. Despite losing market share for its light-duty trucks, which include the Silverado 1500 and GMC Sierra 1500, GM has simply raised the transaction prices for both. The latest sales data shows the average transaction prices for the 2019 GMC Sierra are up by $4,300 compared to last year at this time. New Silverado prices are also up, by $3,000 in the same period. The average new price tags for the Sierra and Silverado are $48,500 and $41,700, respectively.
In fact, the Sierra is the full-size pickup segment leader for average transaction price, beating the long-time No. 1 best-selling truck and vehicle in America, the Ford F-150. Second place goes to the Ram 1500, though its own average transaction price is still below its two Detroit rivals and even the Toyota Tundra.
The problem going forward for GM is whether it can sustain these higher transaction prices after the redesigned trucks’ hype winds down. To help counter this, a new inline-six diesel engine is on its way and they'll be increased production of the more profitable crew cab models. Overall, GM believes it will regain market share this year as improvements have already been seen. That means GM’s new pricing strategy seems to be working.