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GM’s Increasing Profits Tied To Colorado ZR2

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ZR2 special editions.jpg

John Goreham

Contributing Writer, GM-Trucks.com

2-5-2018

Tomorrow, GM will host its investors’ earnings conference call. The news will be good. These things are never left to chance, and GM has already issued "guidance" memos saying what will be disclosed. We don’t pretend to be experts on the finance side of the automotive business, but we can read over a facts sheet as well as the next guy. Here are a few things to consider and then we will get to the ZR2.

-          GM’s sales are flat, not really up or down over the past 18 months or so.

-          GM’s (U.S.) Profits are not flat. They are up.

-          GM’s profits have been increasing since about 2015

-          GM’s Colorado ZR2 is a pricey truck for the size.

A gent named Anton Wahlman, who is an expert on the finance side of the auto business, says that the ZR2’s percentage of Colorado sales has hit 12% in 2018. That is a pretty remarkable slice of the Colorado pickup pie. His point is that pricey specialty trucks, and to a lesser degree crossovers, is having a big impact on GM’s ability to wring out more profits from the same unit volume of vehicles. We went looking for evidence that he may be right and found it in GM’s latest sales report. It was actually the very last item on the report. It said, “Average transaction prices were up $1,270 year-over-year, according to J.D. Power PIN estimates.”

 

So there you have it. Two data items that both point to the same conclusion. Trucks like the ZR2 are working well for GM and the added profits they bring are helping GM to make more money, while not selling more vehicles. Ditching unprofitable markets like Europe, India and South Africa didn’t hurt, but making more money on the things you sell is always a good strategy. Here's GM's future strategy:  “Reshaping the company over the last few years has allowed us to deploy resources and capital to higher-return opportunities including our next-generation trucks and establishing leadership in the future of mobility,” GM President Dan Ammann said. “The all-new full-size truck family that launches this year will generate very strong returns for years to come.”

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GMC dealers must be pissed! No ZR2 in Canyon flavor. You would think GM would offer an off-road canyon...

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6 hours ago, 2009GMC said:

GMC dealers must be pissed! No ZR2 in Canyon flavor. You would think GM would offer an off-road canyon...

Yeah and GM would of probably sold more vehicles too 

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Colorado is still new.  The incentives will come and eat into that profit soon enough.

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On 2/5/2018 at 6:35 PM, 2009GMC said:

GMC dealers must be pissed! No ZR2 in Canyon flavor. You would think GM would offer an off-road canyon...

 

How many standalone GMC dealers still exist? The economy tanking and GM dropping franchises made most of the dealers become all GM brands around here it seems like. 

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On 2/5/2018 at 11:42 AM, Gorehamj said:

-          GM’s profits have been increasing since about 2015

That's one of the reasons why I still drive my "old" truck.
I do not need a study or fact sheet to see that the price of the new trucks is not justified on what you get for it.
People are being lured into a new vehicle with new I-Phone apps and lane departure warnings and rear vents.
The best example is the new RAM with the 12" touch screen. That alone will attract buyers, willing to pay thousands of dollars more.

 

so long

j-ten-ner

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That's why I buy used, I could never afford a new truck at todays (or last years) prices, but I got a decent price on a loaded 2015 with more stuff than I know what to do with. Plus, got rid of my 07 classic that was eating parts for a good price.

 

Edited by Rob Okray

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I do like the Colorado/Canyon, but the price point is just close enough to full size to make it not worth it to me.

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2 different markets, full size and mid sized. I sort of laugh when I hear people say that the ZR2 is just as expensive as a full sized truck, then you are not in the market for a smaller truck. Period.

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Nice truck but very expensive for practical use.


Sent from my iPhone using Tapatalk

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