GM urges patience as Silverado falls to No. 3

DETROIT — General Motors' prolonged ramp-up of the redesigned Chevrolet Silverado has put the longtime No. 2 pickup in an unfamiliar, uncomfortable position: third in Detroit's three-way race.

Ram has beaten the Silverado in nine of the past 10 months, according to U.S. sales estimates from the Automotive News Data Center that have been validated by GM's quarterly reports. The Ram has outsold the Silverado by 36,619 since the latest Silverado 1500 hit dealerships in August and holds a lead of nearly 22,000 five months into 2019.

Including the GMC Sierra 1500, which was also redesigned at the same time, GM's full-size pickup share was down 3 percentage points in the first five months of 2019 compared with the same period a year earlier.

With the Sierra, GM remains in second place in the full-size segment, behind Ford Motor Co.

But GM executives insist the shake-up in a closely watched battle with major image and profit implications isn't a sign of trouble. They say the trucks' launch is going as planned and that GM is focused on profits, not market share.

Barry Engle, who became GM's president of the Americas on April 1, played down declining Silverado sales as a "temporary phenomenon" that will be corrected with more capacity and a normalization of production.

"Given our limited availability, we deliberately launched with a really high mix in trims," Engle told Automotive News this month. "But as we get broader availability and get the full portfolio out there, we'll be just fine."

Broader availability includes increasing annual capacity of the pickups by 60,000 — 40,000 for the heavy-duty models and 20,000 for the 1500s.

The increased capacity will aid plans to roughly double production of the Silverado Trail Boss, an off-road-inspired trim, to more than 20 percent of the mix, Engle said. The increase is a result of the brand's national dealership council saying retailers needed more inventory of the models."We're selling every one of those we can make, and the real demand for that thing is probably double what we thought it would be and what we capacitized at," he said. "The dealers are just screaming for more."

GM also has not started selling the redesigned pickups to fleet customers in any significant numbers, Engle said. Fleet will be "all plus business" on top of the automaker growing its retail share of the market, he said.

The Silverado's share of the light-duty retail market, according to Engle, has risen from 21 percent in January to 26.4 percent in May. The Sierra is up 1.9 percentage points to 10.5 percent, GM said.

"I think you see a trend there," he said. "We're back and we're, as I've described, just starting to hit our pace."

GM has touted the introduction of its so-called T1 trucks, which also include its full-size pickups and SUVs, as the automaker's single-largest launch ever in terms of resources.

Fiat Chrysler Automobiles CEO Mike Manley made Ram's intentions to outsell Chevrolet well-known last year, after the company's redesigned pickups hit the market months before GM's.

GM has sold more than 800,000 full-size pickups in the U.S. on average over the past four years. However, combined sales of the GMC Sierra and Chevrolet Silverado are down 7.9 percent in 2019 through May, according to Automotive News Data Center estimates. In contrast, Ram pickup sales are up 22 percent.

Randy Marion, owner of Randy Marion Chevrolet in Mooresville, N.C., said he has "no issues" with the redesigned Silverado but looks forward to getting more vehicles for his fleet business, which ranks among the top five in the country for Chevy.

"Our days' supply is very low on the fleet and commercial side of it," Marion said. "Our retail Silverado is up 27 percent over last year, and our fleet is flat."

GM and its dealers started June with an estimate of 200,000 Silverados on hand, roughly equal to the number of Rams in inventory, and an estimated 74,000 Sierras, according to the Automotive News Data Center. Based on how quickly the vehicles are selling, those figures equate to a 99-day supply for the Silverado, 98 days for the Sierra and 85 days for Ram.

Another longtime Chevrolet dealer who asked for anonymity to avoid repercussions from the factory said the Silverado rollout has been ineffective for dealers due to a lack of incentive support, the increased pressure from Ram, and difficulty getting certain trims and engines earlier in the launch.

Average incentives for the Silverado and Sierra have been about $500 less than Ram in 2019 but $1,500 more than the Ford F series, according to estimates from Autodata.

GM President Mark Reuss last week said he always has a wary eye on competitors but that the company is on plan and just beginning to sell lower-priced models of the pickups — a part of the segment where Ram has been aggressive with incentives and leasing.

"We look at that and monitor it and, yeah, we're always worried about it, but we've got a great truck and we continue to roll it out in a high mix," he said June 12 after announcing a $150 million investment in Flint, Mich., to help increase production of the Silverado HD and Sierra HD. "And now we're getting into the work truck and the high-volume, lower end of the price points on the T1s. We've got a good plan."

Ram's U.S. sales through May were 231,382, vs. an estimated 209,688 for the Silverado. Including an estimated 77,873 for the Sierra, GM still led FCA in full-size pickups by about 56,000, though both companies trail the F series, which has posted sales of 368,972 this year.

Last week, GM started shipping the 2020 Silverado HD and 2020 Sierra HD to dealers. The production ramp-up for those pickups will continue this year, ahead of the expected arrival of GM's redesigned full-size SUVs in 2020.

Each of those launches, Engle said, will take less time than the rollout of the 1500 pickups, as they involve lower volume and only one plant at a time. The company also is applying lessons learned from launching the 1500s to those products.

"It will be the same measured approach, the same idea, the same philosophy, but we will be able to accelerate it," Engle said. "It won't take as long."

GM started producing crew-cab models of the redesigned 1500 pickups in July in Fort Wayne, Ind., followed by double-cab models in October. GM's plant in Silao, Mexico, came online with regular-cab and crew-cab models around the beginning of the year. The pickups started arriving at dealerships in August, about four months after Ram began shipping its pickups.

"We've got a plan," Engle said. "We're in this for the long haul."