General Motors and Ford are raising the stakes in the war to win over buyers of heavy duty pickups, full-size trucks coveted by America's contractors, cowboys and commercial buyers alike.
GM unveiled Tuesday its new heavy-duty Chevy Silverado at the company's plant in Flint, Michigan where the truck will be manufactured.
"They are very purpose built," Mark Reuss, president of General Motors told CNBC. "Things like snowplows, going to work at a construction site, using the power out of the bed. These are tools, but they are also refined tools."
The new Silverado, complete with a ten-speed transmission rolled out just hours after Ford announced new capabilities and technology for its F-Series Super Duty pickup truck.
"Our new Super Duty has more power, more payload and towing capability and better technology than ever to help these customers build a better world," Kumar Galhotra, Ford's president of North America, said in a new release announcing the new truck.
Not to be outdone, Fiat Chrysler has a new Ram Heavy Duty 2400/3500 pickup heading into showrooms this spring. It comes complete with a new Cummins engine and the capability to tow 35,100 pounds, roughly the weight of five African elephants according to Fiat Chrysler.
There's a reason the Detroit Big 3 automakers are in a arms race when it comes to big pickups. These are among the most profitable models the automakers sell.
"Pickup trucks, the full-size and then the heavy duty, combined account for well over 100 percent of global auto profit," said Adam Jonas, auto analyst with Morgan Stanley. "We like to joke sometimes the Ford F-150 is called the F-150 because it accounts for 150 percent of Ford's global profit."
Jonas estimates some of the newest full-size pickups each bring in $10,000 to $15,000 in profits for automakers, depending on the model. He calls the profit margins "Ferrari like."
All of which explains why the Big 3 are pouring billions into rolling out newer, more capable and higher-priced heavy duty pickups. For example GM is adding a thousand jobs to its plant in Flint to help with production of the new Silverado. Many of those jobs will be filled by GM employees working at some of the six plants the company is idling in a North America.
Last year, roughly one out of every four full-size pickups sold in the U.S. was a heavy duty model according to IHS Market, the Ford's heavy duty F-Series being the most popular.
There is one other reason why GM, Ford and Ram believe their new heavy duty pickups will rack up strong sales this year. The economy remains strong, so businesses and contractors looking to invest in new work trucks are primed to upgrade their heavy duty trucks.
"Construction starts, anything with building, anything with servicing. All those areas are very healthy and that helps out truck business and in particular, the heavy duty business," said Reuss.
Questions? Comments? BehindTheWheel@cnbc.com.
via IFTTT
No comments:
Post a Comment