A full two-thirds of U.S. vehicle sales in January of this year were trucks. That is a broad category, of course, encompassing trucks, minivans, traditional vans, SUVs and their compact cousins, crossovers and CUVs. But a new trend is emerging in the formerly utilitarian truck space; the more upscale models are showing the strongest growth and profits.
GMC: The New Face of Luxury?
Witness the dramatic turnaround of GMC, General Motors’ truck division. Long a brand of strictly utilitarian pickups, big SUVs and box trucks, the GMC’s top-of-the line Denali series has come from nowhere to become the de facto luxury truck division of General Motors. Frequently overshadowed by its sister divisions, the All-American Chevrolet and Cadillac’s luxury Escalade SUVs, GMC’s relative obscurity seems to have been part of its success. GMC’s long-running tagline is “We Are Professional Grade”, and that is the brand’s core demographic – contractors, tradesmen and business owners, who want a fundamentally sound and durable vehicle that might be upgraded to luxo-barge status.
The Wall Street Journal quotes GM’s Duncan Aldred, the executive in charge of the GMC brand, as characterizing GMC’s customers as ones who “love getting their hands dirty, but they’re very wealthy.”
GMC’s Denali trucks are less flashy than Cadillac (which doesn’t make a pickup truck) or other luxury vehicles, and this seems to be part of the appeal: low-key luxury. As one GM dealer in Salt Lake City, Utah said to the WSJ: “They think GMC is more of an under-the-radar luxury vehicle... [I] recently had a customer trade in a Porsche for a GMC, which he preferred because it was more low-key. ”
“That thing is a money machine,” GM President Dan Ammann said of the Denali line last month during an investor conference, as the WSJ noted. “Mr. Ammann presented a slide, citing research from J.D. Power, that showed Denali’s average selling price of $55,600 a vehicle in 2017 was higher than any higher-volume auto brand, including BMW and Daimler AG’s Mercedes. The Denali line also outsold Cadillac, at a higher average price.”
GM must be careful, of course, to protect the status of its Cadillac division and its flagship Escalade. The Escalade commands a $15,000 premium over GMC and other offerings, and is loaded with luxury touches accordingly. Complicating matters is the network of dealers around the US, where Cadillacs or Buicks are frequently sold alongside GMC trucks. Often a dealer’s showroom or sales lot will feature a Cadillac or Buick sedan sitting cheek-by-jowl with a GMC Denali. The sedan looks poorer by comparison.
Ford and FCA have not lost out on the luxury truck trend. Ford’s F150, already by far the best selling pickup in America, has a number of luxury trim lines (the Lariat, the King Ranch and the sport-luxury Raptor) that are selling very well. And the revamped Lincoln Navigator and its Ford cousin Expedition have doubled their sales since their introduction last fall, particularly at the highest trim levels. Ford is now scrambling to keep up with demand, retooling factories in a mad dash to produce enough vehicles.
Jeep’s Grand Cherokee Trackhawk luxury SUV, which has a monster 707bhp engine and sports a eye-watering sticker price of $93,000, is also a strong seller. Dealers, to their surprise and delight, cannot keep them in stock. FCA’s decision to drop its sedans and retool for truck production seems to be paying big dividends, at least in the short term.
Pickups: The Luxury Format of the Future?
With all this success of GMC, will Cadillac and Lincoln introduce a pickup truck in the future? Company sources aren’t saying, but it has happened before. The Cadillac Escalade EXT was a truck variant of the luxury SUV, which was sold from 2002-2013 and did well enough to stay in the market for a decade. And Ford sold a Lincoln truck, the Blackwood, from 2001-2 which was rather swiftly retired after production problems and poor sales.
Would either marque try again? It seems unlikely that the luxury brands would poach buyers from successful models like the F150 and Denali, but there are so many unprecedented variables in the current market that anything seems possible.
And lest you think this luxo-truck craze is a purely American phenomenon, witness the introduction of Mercedes mid-size truck, the X-Class, and the recent revamp of the long running Geländewagen, which has been in production since 1979. Both trucks show a commitment to extending the Mercedes brand into new territory and drawing in customers who might have passed over the marque in the past.
Does all this news mean that the truck is the luxury vehicle of the future? Well, if we are talking about the SUV, that fact has already been well established. The format, pioneered by Ford twenty years ago, and now led by the Cadillac Escalade, along with a host of imitators, will definitely be a significant luxury vehicle in the future.
But what of pickups? Is their rise merely a product of good economic times and comparatively low fuel prices? Or is there a long-term trend emerging? Certainly in North America the luxury pickup seems to be an alternate to the SUV or luxury sedan for certain customers, who are trading in, and forsaking other luxury marques , to embrace the newest luxury trend.
Whether this all lasts, time will tell. But for designers who might have, in the past, overlooked the truck segment of the market, this is a wake-up call. This new generation of trucks has been influenced by luxury sedan design. But soon, car designers may be looking to trucks for inspiration for a new class of luxury sedans.