2014 Chevy Silverado Hits a Stumbling Block

The 2014 Chevy Silverado (Photo: General Motors)

The redesigned 2014 Chevy Silverado pickup -- and its close relative, the GMC Sierra -- were supposed to be game changers for General Motors (NYSE: GM  ) . The pickup segment is one of the most profitable parts of the auto market, and these two vehicles were meant to help GM grab a bigger portion of that profit, through higher sales and higher average selling prices.

So far, GM has made good progress on the second goal; Silverado trucks are selling at higher prices than ever before. However, in the long-running market share battle between Silverado and Ford's (NYSE: F  ) F-150 pickup, Chevy seems to be losing ground.

September potholes
In September, GM suffered a rare decline in Silverado sales, which fell more than 10% year over year, from 36,425 in September 2012 to 32,506 last month. GM blamed the drop partially on a calendar shift -- September had 25 selling days last year, but only 23 selling days this year. However, Ford faced the same headwind, and still managed to grow F-Series sales by nearly 10% year over year, to 60,456.

Ford's F-Series trucks are regaining market share (Photo: Ford)

As my colleague John Rosevear recently explained, part of the problem with GM's pickup sales may be inventory constraints. GM is nearing the end of a complex transition from its previous generation of pickups to the new 2014 models, and there have apparently been some supply hiccups along the way.

As a result, GM has not been able to completely meet dealer orders for pickups equipped with the 5.3-liter V-8 engine -- the most popular option -- according to a recent Bloomberg report. That said, GM has downplayed the impact of these inventory constraints, claiming that it has been able to fulfill 80% of dealer orders.

GM executives took a similar tack on the company's sales call this week. Don Johnson, VP of sales and service for Chevrolet, stated that dealers had a good supply of crew-cab pickups, which usually amount to 60% of sales. On the other hand, Kurt McNeil, VP of sales for the U.S., stated that dealers were still "building" stock of the cheaper regular cab and double cab models.

What's going on here?
It's clear that there are some supply constraints affecting sales of the 2014 Chevy Silverado (and to a lesser extent, the GMC Sierra). However, if supply constraints were the only factor holding back sales, GM executives would probably have said so.

Moreover, this is the second month that that GM has ceded pickup market share to Ford. Through July, the Silverado had gained ground on Ford, with sales up 27.4% year to date, versus a 22.1% gain for the F-150. Ford made up almost all of that ground in August and September; F-150 sales are now up 20.7% year to date, versus a 21% gain for the Silverado (and a 20.9% gain for Sierra).

Foolish bottom line
GM needs the 2014 Chevy Silverado to succeed; it competes in a high-margin, high-volume market segment. Moreover, time is not necessarily on GM's side. Ford is expected to release a redesigned F-150 pickup next year, which will almost certainly deliver big fuel economy gains compared to the previous model.

So far, the new pickups have boosted GM's selling prices -- which should be good for margins -- but not its market share. One potential reason is that GM dealers are having trouble competing on price with Ford and Ram dealers, who are offering discounts in order to clear their stock of older 2013 models.

If that's the real reason that GM's new pickups are having trouble, then the Silverado and Sierra should start regaining market share within the next couple of months, as Ford and Ram dealers transition to selling their own 2014 models. On the other hand, if GM's market share does not improve by then, GM investors will have to consider the possibility that they are betting on the wrong horse.

Dig Deeper on Ford
While GM has posted inconsistent performance recently, Ford has stayed strong.  The Motley Fool's new special report on Ford reveals its secrets to success. If you want an edge on other Ford investors, be sure to check out "5 Secrets to Ford's Future". This 100% FREE guide includes actionable advice that you can put to use right now! Just click here now for instant access!

Read/Post Comments (16) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 03, 2013, at 8:53 AM, vsawmike wrote:

    The 2014 Silverado is not as good a truck as the F-150 this year, last year, next year and especially not in 2015. The only thing the Silverado has is mileage.

    But in the truck segment it's all about being brand loyal. Guys who drive a Chevy will always buy them again even if the truck is inferior to the Ford. The shift has come in the percentage of people who are brand loyal. These days not as many buyers are brand loyal and more will do research.

    When you research the things that make a truck, you find the Ford wins almost every category. Larger thicker frame, larger springs, axles, suspension components, larger body mounts, more structure in the cab, sound deadener in the cab, larger crush zone in the front end, stronger structure in the bed, more cooling capacity, and the list goes on and on.

    The F-150 costs more than the Silverado and yet it sells more every year. The reason is simple. People who buy a truck usually buy it to be used as a truck. They know what a good truck is.

    More people buy a Silverado for a daily commute and occasional use as a truck than the F series.

  • Report this Comment On October 03, 2013, at 9:25 AM, guysisson wrote:

    Ford is very simply the better truck. They have sold more trucks than any other manufacturer for 37 years. I bought a 2012 F-150 after owning a Silverado. The difference in the two trucks is unbelievable. From the moment you first sit in the Ford you can feel the difference in quality. The people that buy trucks in America have obviously discovered the difference, which is evident in this report. Ford is selling twice as many trucks as GM. It doesn't help GM that the new Silverado looks almost the same as the old trucks.

  • Report this Comment On October 03, 2013, at 9:42 AM, ponchoman49 wrote:

    The 2014 Silverado is a better truck than the outdated F-150 in most every way. The tried and true V8 engines are more durable than Ford's gimmicky Ecoboost engines which have seen many disgruntled owners ranging from flat out failure to drive-ability issues and mileage not as advertised. Ford's 5.0 and 6.2 V8's don't compete in fuel economy and Chevy's new 4.3 has far more useable torque than the high revving Mustang 3.7 liter V6. The F-150's structure feels loose and insubstantial. Just close the door on an F-150 while sitting in the driver's seat and then do the same thing in the Silverado. The difference is shocking. The Chevy also rides quieter and handles better and it's interior looks less blocky and cluttered. I also would take GM's simpler touch screen over Ford's controversial Sync system. Add in higher tow ratings lower transaction prices and lower interior noise levels and it's readily apparent which truck is superior.

  • Report this Comment On October 03, 2013, at 10:00 AM, A9930thTA wrote:

    VSWA mike the first poster is wrong on darn near every comment he makes.

    The Silverado and Sierra are the only two 1500 or half ton trucks with fully boxed frames. The Silverado has a stronger bed because its welded to the frame not bolted like the Ford so hes wrong again. Interior noise of the Silverado/Sierra is light years ahead of the Ford which is noisy at road speeds and when you close the door of the Ford it sounds like a tin can. You can hear the quality difference in the two. Heck every magazine testing the 3 trucks has the Ford in last place and the Chevy in first.

    I like the locking differential that comes standard in 4 wheel drive trim for the Silverado/Sierra. You get a limited slip with the Ford which sucks in 4 wheel drive applications. Want to lock the front axle in a Ford? Get out and turn the lock on the wheel. In the GM trucks you dont have to get out and turn anything.

    The Ford and Silverado/Sierra generally have very close towing and payload numbers. When GM beats Ford the next year Ford tries to up GMs numbers like they will try to do next year since the Silverado has 12,500 towing with the max trailering package.

    What I find hilarious is how he claims the F series costs more. I have never experienced that myself and that is what hurt GM sales the last 2 months. The fact GM has very very very few 2013 trucks left and Ford/Dodge have over 2 months supply left. People are willing to pay $10,000 less for the inferior Ford and Dodge right now, but when the 2014 models hit GMs market share will rise because of how incredible the trucks are.

    When it will really help GM is in 2015 when Ford brings out their new truck. They just revamped their engines so its not likely they will get big mileage increases, and when Ford is charging full msrp and offering no discounts will they stack up to the Chevy and GMC? Not likely. And if they use a lot of aluminum to make their truck lighter to get better gas mileage the cost of the truck will shift a lot of not loyal truck buyers to the one that costs less seeing how aluminum isnt cheap.

  • Report this Comment On October 03, 2013, at 10:23 AM, fpl1954 wrote:

    To me the discussion is simple. When I bought my truck, I looked at them all, Ford, Chevy, Dodge. Or at least I tried to look. First I checked the history of Dodge and the reliability was so bad I decided not to look. Then I called Chevy and told him I'd be looking at all three. The saleman said "Just look at Ford". So I did.

  • Report this Comment On October 03, 2013, at 10:26 AM, GunsDaisies wrote:

    Of course I like what 'A9930thTA' commented; I'm an owner of a 2014 4WD GMC Sierra SLT crewcab. I think its great truck. Yes, I'm an average suburban home owner. I don't know what the Ford folks are saying, but I get 18-22 mpg (with very conservative driving), and a very quiet peaceful drive. It fits my likes, preferences, style, and needs. I think every truck buyer should focus on what fits them and not what everyone else, even the car critics, are saying. Also note that I would love to have a Ford Raptor, but I can't afford the entry price or the fuel, but if I could justify/afford a 65K truck with 13-16 mpg, I would have done it.

  • Report this Comment On October 03, 2013, at 10:32 AM, cityperson wrote:

    Both trucks, the Chevy and the Ford pick-ups are both great trucks. Both can do the job one selects these pick-ups for. At least both companies have cut most of the rust problem on both of these pick-ups. Buit then again I live in southern CA.

  • Report this Comment On October 03, 2013, at 10:32 AM, CitizenUSA wrote:

    I think part of the problem is image. I loved my Chevy Suburban but the Ford truck just looks "Tougher". I think that I can prove my point by just looking at how much Dodge increased sales the year they brought out the "Big Rig" look. I can afford any truck I want and if I was to buy a full size truck, it would be the Ford (but not with an EcoTech) with a V8. (The Raptor would be my choice but it needs a small diesel for great mileage) . I think Ram has a game changer on it's hands with the small Diesel 6cyl engine they are about to bring out.

  • Report this Comment On October 03, 2013, at 10:40 AM, Cody700 wrote:

    Chevy buyers will buy Chevy, Ford will buy Ford and so on. The difference is in those that aren't necessarily brand loyal. Those folks are buying more Fords than they are Chevy. I don't pretend to know the reason, I just know that is what is happening. There isn't anything that the manufacturers of the trucks that I am not loyal to can do to change my mind about who makes the best. Your perception is your reality and nothing is going to change that if you are a die hard loyalist of any of the manufacturers. What is great for us is that the competition is really strong, and that is what brings us consumers a better product year after year.

  • Report this Comment On October 03, 2013, at 11:11 AM, Hoptopia wrote:

    1/2 ton trucks suck regardless of brand. I've had several and they are so inferior for doing truck duties such as hauling and towing. My 3/4 ton Duramax hauls circles around those grocery getter "trucks". To GM's credit they have kept the same core diesel in their truck for 13 years running. Ford had a reliable diesel since the noisy clattery 2002 powerstroke.

  • Report this Comment On October 03, 2013, at 1:43 PM, vsawmike wrote:

    A9930thTA You are incorrect. The GM trucks are not better in any way except fuel mileage. Just read reports from auto writers. secondly the bed is not welded to the frame on any truck. The bed is bolted to the frame on the GM trucks just like on the Ford. The difference, if you have eyes and can see it, is that the Ford bolts go all the way through the bed, not just the brackets underneath. Just get under both and see the difference in the structure. Look at the suspension, brakes etc. Ive seen the cabs in bare metal from and the Ford has more steel in the cab. This is not opinion but fact.

    Consumer reports found the interior of the F-150 to be quieter by 22 decibles. "close the door" are you kidding? Just look at the cheap hinges on the GM truck compared to the Ford hinges. Look at older GM trucks and see the doors sagging, handles falling off the doors and tailgate because they break so easy. You are obviously are a GM truck dealer drinking the GM koolaid.

    Just look at an older Chevy and see the bed and cab don't line up anymore because the frame is sagging. The boxed frame does not make it superior. The strength is what matters. The steel in that boxed frame is 1/8" thick. Get a clue.

    The Ford engines do not get the same mileage but that gap will close soon. The diesel Powerstroke made by Ford is far superior to the Duramax also. Just ask any mechanic what he works on more. Drive by a repair shop and see that half the vehicles in there are Generic Motors products.

  • Report this Comment On October 03, 2013, at 1:45 PM, vsawmike wrote:

    Hoptopia you are also incorrect. The new Duramax is not the same engine it was and neither is the Powerstroke. The new Powerstroke made by Ford instead of International will out pull, tow and has more HP and torque and is far smoother during shifts and hard maneuvers.

    The first GM diesel was an Oldsmobile gas engine converted to diesel and had many problems most notably was the head gasket leaks.

  • Report this Comment On October 03, 2013, at 1:48 PM, vsawmike wrote:

    CitizenUSA, the Ram V-6 diesel will cost almost $5000 more than the standard V-6 and the mileage over the life of the truck is not worth that. The V-6 gas engine is a better choice in a half ton. But the Ram is not even close to the GM in quality not to mention the Ford.

  • Report this Comment On October 03, 2013, at 1:55 PM, AcuraT wrote:

    Good thing the whole industry is not around trucks. Cars and SUVs count as well. SUVs are GM's strength, where the Suburban/Tahoe sell over 60% of all vehicles in that segment. The GM redesign coming there is even more important than this truck - which is still important. As others wrote, and proven on this forum, most are brand loyal so in the end, price if nearly the same will not drive them to one - brand will. GM hurt itself with preimum truck pricing so you will see $500 and $1000 rebates on the 2014 trucks from GM - and soon.

  • Report this Comment On October 04, 2013, at 10:36 AM, Johny205 wrote:

    I agree with the guy above who says half ton trucks are a bunch of grocery getters. I have always owned one tone diesel trucks. I have hooked up my tool trailer to my employees half ton chevy and the tires where touching the fenders, needless to say, he wasn't able to pull the trailer. I can put 5,000 lbs in the back of the truck and pull a 15,000 lb trailer and go down the freeway 80 mph. I had a 2005 Ford F350 and sold that at about 101K miles. I know about 8 friends that basically had the same truck with the 6.0 liter diesel engine, that blew the engine between 100-110K miles. Not to mention the fuel injectors going out and many electrical problems. Fords 6.0 is a piece of crap! I now own a 2010 Dodge 3500 diesel and it has way more get up an go, and the Cummings in line 6 cylinder diesel engine is the best diesel on the market. The ford I had was already rusting around the wheel wells at 4 years old, the dodge has fiberglass around the wheel wells and will not rust.

  • Report this Comment On July 24, 2014, at 2:22 AM, maisie wrote:

    I recently bought a new 2014 z71 ltz2 . I have had a issue since the day i got it with the MY LINK trying to update itself about once a day. It appears to happen while driving usually when the truck hits a bump in the road. It has been returned to the dealer 5 times but they seem to not be able to fix it. Has anyone seen or heard of this problem? thanks

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2666654, ~/Articles/ArticleHandler.aspx, 10/1/2016 6:24:56 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:01 PM
GM $31.77 Up +0.29 +0.92%
General Motors CAPS Rating: ***
F $12.07 Up +0.10 +0.84%
Ford CAPS Rating: ****