The second largest global automaker, Ford (F, Financial), has been promoting the aluminum F-150 truck which is expected to hit the roads by the end of the year. Analysts have already added a cautious note that Ford's future is difficult to be ascertained as on date, as rivals are gearing up to give its new model a quick response as soon as its formally released worldwide. Though Ford's management are having all their future hopes in the truck sector tied to the new F-150 model, General Motors (GM, Financial), its chief rival is already on its feet trying to catch up with Ford's plans rather silently without much pomp and show. Let's check out what strategy General Motors is adopting to win the truck market sales over Ford in the near future. Here's the final story.
Versus
GM in the spree to gain quick ground
In the month of August when Ford rolled back its incentive scheme on the F-series, General Motors offered zero percent interest for 72 months and deferred payments for 90 days on its Silverado light and heavy duty pickups. The latter did turn out to be a game spoiler in August when it reported Silverado and GMC Sierra combined sales of 69,048 trucks while Ford reported 68,109 F-series truck sales. It marked the first month in 2014 that GM's combined total sales outsold those of Ford.
GM wants to continue the incentive package for its customers with the interest of hurting Ford's truck sales. For September, GM is providing promotion and dealer incentives that would serve as the offensive strategy to capitalize on Ford's vulnerability as it negotiates the complicated makeover of its aluminium body 2015 F-150 series.
Jim Cain, GM's spokesperson, acknowledged that the company wants to accelerate sales in the final months of the year which remain typically the strongest in terms of truck demand. And he even stated that the incentive spending of the company is in line with Ford's strategy to outpace GM. According to J.D.Power, in August the average incentive offered on Silverado by GM was $4,224 while it was $4,049 for the F-series of Ford. In the U.S., incentives provide the push for further sales and thus GM won the sales race in the U.S. truck sector.
GM's spokesman further added, "We’ve got the newest truck in the industry and the strongest season of the year for truck sales; we’re going to compete for every sale, with discipline on incentives and a strong focus on the durability and performance of our pickups.”
Making lighter pickups
GM's current pickups are just a year old, but a Reuters report has confirmed that the company is already accelerating the timetable for its successors' release. As per the report, GM has pulled forward the launch of its next generation Chevrolet Silverado and GMC Sierra by about nine months, towards the fall of 2018. Also, GM expects to launch a redesigned version of full-size sports utility vehicles by a year later.
Like Ford's F-150 new model, GM is looking forward to dramatically reducing the weight of its upcoming Chevrolet Silverado and GMC Sierra pickups, which are being developed under a program known to suppliers as T1.
The weight reductions in the upcoming truck series might not make GM lag behind its competitor much – the curb weight on a base 2015 Silverado is 4,392 pounds compared with the sub-4,500 pound total for the comparable F-150. A Wall Street Journal report in February this year mentioned that the number 1 U.S. automaker, GM, has locked in supply contracts with Alcoa Inc. (AA, Financial) and Novelis Inc. (NVL, Financial) to provide aluminium sheets required for the next-gen GM pickup.
GM is also planning a new family of smaller, lighter and more powerful engines that can be easily compared to Ford's EcoBoost engines. Such engines would have fuel injection, turbocharging and stop-start systems designed to dramatically improve fuel efficiency in the redesigned truck series.
To conclude
The changeover to aluminium is so significant that GM is taking all measures to keep its position in place in the U.S. truck industry. GM executives are betting that their new models could offset Ford's lead as the company would use advanced techniques for their manufacturing process. There is a lot to wait and watch in this game between Ford and General Motors – so let’s stay tuned!
