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 Executives at the No. 1 U.S. automaker are counting on the 2015
Canyon pickup when it debuts in the fall to be a "true conquest
machine" that will attract full-size truck owners from rival brands.
Target buyers include those who want something smaller and people
who currently drive crossover vehicles but want the utility of a
truck.
Any sales Canyon pulls from the low end of the full-size Silverado
should be minimal, GM believes.
The Canyon, scheduled to be unveiled on Sunday night ahead of the
Detroit auto show this week, is meant to pull sales from Ford Motor
Co's <F.N> F-150 and Chrysler Group's <FIA.MI> Ram 1500 pickups, but
it may also take sales from Silverado as well, said Tony DiSalle,
U.S. vice president of marketing for GMC.
"If there is somebody that's in a full-size today that really needs
a smaller, more convenient package to better fit their lifestyle,
I'd rather they stay with us than go elsewhere," DiSalle told
reporters.
"That's an important part of retention. I would much rather give our
customers the breadth of choices than have them go elsewhere," he
added. "The role of this truck is to go gobble up business from
competitors."
GM showed Canyon's Chevy sibling, the 2015 Colorado, at the Los
Angeles Auto Show last November.
The automaker stopped making the previous Colorado and Canyon models
in 2012 because of declining popularity. Now, GM is counting on the
new designs to appeal to lifestyle buyers much as Subaru <7270.T>
has done with its vehicles, offering space, utility and a refined
interior.
CROWDED TRUCK SEGMENT
While large pickup sales are expected to rise only slightly from
2013 to 2016, midsize pickups will see sales increase by more than a
third, according to research firm LMC Automotive. The leader in the
mid-sized truck segment is Toyota Motor Corp's <7203.T> Tacoma.
Sales of the Canyon are expected to more than double from 2012 to
more than 21,800 trucks in 2016, while Silverado sales are expected
to increase 22 percent in the same period, according to LMC.
GM has not disclosed the pricing for the new Canyon, but the most
expensive 2012 model sold for more than $32,000, while the least
expensive 2014 Silverado starts below $27,000.
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LMC senior vice president of forecasting Jeff Schuster sees the
smaller pickups as a hedge by GM.
"In their mind, they're perfectly fine if there's some play between
the top end of mid-truck, the Canyon, and the bottom end of the
full-size truck," he said. "Let the consumer decide whether they
want a smaller truck with more amenities or a larger truck with
fewer things on it."
While there could be "an element of confusion," price overlap is
inevitable with so many variables in cabin size and engines in the
pickup truck segment, Schuster added.
Joseph Phillippi, principal with AutoTrends Consulting, does not see
the Canyon hurting the Silverado much because the trucks are so
different. As long as GM is banking the profit, however, "what does
it matter?" he said.
Guggenheim Securities analyst Matthew Stover does not love GM's
truck strategy, as he does not view the gasoline-powered Canyon as a
compelling value for the average consumer, and he calls the
mid-sized truck market a West Coast phenomenon. "You're throwing
rocks in a pond that's getting smaller and smaller," he said.
Stover also said the gap in fuel efficiency between the mid-sized
and large pickups is just not as large as it used to be, minimizing
the attractiveness of the smaller model. However, the Canyon's
diesel variant, which will be sold in the second year, could be
successful, he said.
(Editing by Matthew Lewis)
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