US: GM move into smaller pickup segment brings many questions image

General Motors, the largest US automaker, made a daring return to the once sprawling small pickup segment in the US, with the move breathing some life into the moribund market sector.

But the strategy is not void of issues, as new data is drawing alarm signals that the automaker’s new trucks might have started to eat into the group’s sales of higher-priced, better profit yielding, larger trucks. Chevrolet Colorado and GMC Canyon were introduced to the market last autumn and since the midsize pickup segment has soared to account for at least two percent of the total U.S. car and light truck market, up from 1.4 percent in the period before their launch. According to certain industry executives, the segment could rise to double its yearly deliveries to some 500,000 units, making around 3 percent of the total market last year. According to other analysts though, the sales increase comes with associated woes – the encouraging Colorado and Canyon sales are at the expense of the group itself. That’s because nine out of ten vehicles previously purchased by Colorado and Canyon owners were actually GM cars or trucks. IHS data shows that at least 16 percent of the buyers of the smaller GM pickups were actually previous drivers of the full-size Chevrolet Silverado and GMC Sierra trucks.

While it’s too early to tell, GM will for sure not be content to increase the sales of the smaller models by relinquishing potential clients of the larger pickups, which make up a large chunk of the Detroit carmaker’s profit in the US. The company also points out that more than 50 percent of Canyon and Colorado buyers are new to GM and the models have managed to shake up the longtime leader of the segment – the Toyota Motor Corp’s Tacoma.

Via Reuters