Of all the General Motors brands, GMC is in the most precarious place. Chevrolet and Cadillac have strong positions as the General's mainstream and luxury brands, and Buick has both the global support of the Chinese market and a lineup of vehicles that is highly differentiated from the rest of the GM stable. But GMC labors under (at least) two heavy burdens: First, its key products are often thought of as merely upgraded Chevrolets, and second, most of those products are big, relatively inefficient trucks. You might not think that's a recipe for ongoing success, but GM seems to disagree: Automotive News is reporting the next-generation GMC Yukon will remain a body-on-frame vehicle, and that's going to have a serious ripple effect on GM business.
The news itself wasn't unexpected: GM is, of course, committed to building full-sized pickups, and that means continuing to update the Chevrolet Silverado/GMC Sierra, and that means developing a new platform for the next generation of those trucks. Then, it makes a certain amount of sense to keep sharing that platform with the big SUVs from Chevy, GMC and Cadillac. After all, the money it takes to leverage that platform across multiple brands/models is well under the amount of money those vehicles bring into GM'”provided we don't see another major fuel crisis that causes people to stop buying them.
But let's ignore that point for a second to get a current reading on just how much business is involved here. The current GMT 900 platform that underpins GM's pickups is also used for the Yukon (and GMC Yukon XL), as well as the Chevrolet Suburban, Chevrolet Tahoe, Cadillac Escalade, Cadillac Escalade EXT, Cadillac Escalade ESV and Chevrolet Avalanche. In July, those vehicles combined for 65,515 sales, up 25 percent from July 2009.
Now, when you put this in context, you can see where GM's multi-brand approach to the marketplace really pays off. The Ford F-150, the best-selling vehicle in the U.S., rang up a prodigious 50,449 sales in July, an amazing increase of 38.9 percent over the same month last year. But if you add in the sales from the rest of the Blue Oval SUVs, the final tally comes to 61,512'”and remember, that includes vehicles that won't be sold in 2011 (like the Mercury Mariner and Mercury Mountaineer) and those that will be switching away from the Ford truck platform (like the 2011 Ford Explorer).
Another way to think of those 65,515 GMT 900 sales: They represented about 6.2 percent of the entire industry total last month. Needless to say, GM isn't going to walk away from that kind of business anytime soon. On the other hand, GM's next-gen full-size trucks won't arrive here anytime soon either. The same Automotive News story mentioned above calls for the new Yukon to debut in the 2014 model year.
But now we have to double back to that fuel-efficiency stuff, and there are (at least) two things going on here. The new CAFE standards kick in for the 2012 model year, and everyone's going to have to do some work on the compliance front. But in an odd coincidence, the EPA happens to use the Silverado as its example of a "large pickup truck" in a table of model-year 2016 fuel-economy targets, and the bull's eye is right at 24.7 mpg. The basic plan is that the new CAFE regs require 5 percent increases in fuel efficiency from 2012 onward to meet the 2016 goal, so, working backward, the rules would require a roughly 22.4 mpg level in 2014.
Today's Chevy pickup brings an EPA line of 15 mpg city/21 mpg highway/17 mpg combined, as does the Yukon, which means GM would need to up these vehicles' fuel efficiency by roughly 32 percent. GM does have a bit of a secret weapon here: The 2010 Yukon hybrid already attains a stellar 22 mpg combined from the EPA. Squeezing out an extra .4 mpg by 2014 has to be well within the realm of possibility for General Motors, and I'm sure we can expect more than that.
The bottom line: I'm thinking GM has what it takes to get its full-size trucks to meet those new CAFE regs after all.
Now, if only the company could be sure of exerting the same kind of control over the actual price of gas, I'd say the bet on the Yukon and friends would be a dead-certain lock.