Throughout the great recession, and now well removed from it, General Motors' (NYSE:GM) Chevy Silverado pickup has remained GM's proverbial Rock of Gibraltar. Even with annual sales down from a peak of nearly 706,000 units in 2005, Silverado has seen a dramatic improvement from 2009 when sales sank to just 316,544 trucks for the year. In 2013, Silverado sales jumped 14.8% over the previous year to 480,414 -- its best sales total since 2007. 

2015 Chevy Silverado LT 2500HD. Source: General Motors.

In addition to being the cornerstone of the Chevy brand and an important component to GM's bottom line, the Silverado is also America's second most popular vehicle behind only the Ford (NYSE:F) F-Series pickup in terms of total units sold. Through July, 429,065 F-Series pickups have rolled off dealer lots , and 282,776 Silverado's also found new homes.

To add some color to these figures, Chevy has sold approximately 350,000 trucks in the U.S. through the first two quarters of 2014, meaning Silverados account for more than two-thirds of its truck sales in the first-half of the year. Based on GM's entire retail vehicle lineup (Chevy, Cadillac, Buick, and GMC), Silverado accounted for 16.5% of total U.S. sales through the first six months. That's a staggeringly high figure that demonstrates how crucial Silverado remains to GM's future.

Silverado's five most important states
With this in mind, I requested that General Motors supply me with sales data showing in which states it sells the most Silverado pickups. That way we, as investors, might get a better bead on what factors are driving consumers to buy and help us determine what headwinds it might face in the future. GM was more than happy to oblige with registration data from Polk Automotive.

Based on Polk's data, here are the five states which are the most important to Silverado's ongoing success:


Vehicle Registration Count

% of U.S. Sales













New York



Source: 2013 Polk registration data via General Motors. Percentage of U.S. sales calculated by author.

As the above data shows, these five states accounted for more than 157,000 Silverado sales last year, or a third of its total sales. Proclaiming them to be an important part of growing Silverado's brand image would be a gross understatement.

Why Silverado sells so well in these states
Perhaps the first thing you'll notice is that we have some overlap from last week when we looked at the F-Series' most important states. Both Texas and California remain at the top of the list, and Oklahoma took the No. 4 spot in both instances.

2015 Chevy Silverado. Source: General Motors.

In the case of Texas and Oklahoma the story is all about the demands of the oil and gas industry. The rough terrain surrounding wellheads and the need for tough vehicles with impressive hauling capacity creates the need for trucks like the Silverado and F-Series in both states.

By a similar token, California remains a core market for both the F-Series and Silverado because it's the leading agricultural producer in the U.S. Farms tends to cover a lot of land and hauling capacity is usually among farmers' greatest needs in a vehicle.

However, Michigan at No. 3 and New York at No. 5 are unique to Silverado. Yet the impetus for Silverado sales remains very similar to that of Texas and Oklahoma: oil and gas industry needs. Both the Utica and Marcellus shale formations extend into New York from the Ohio River Valley, while the Antrim shale in Michigan is one of the northern U.S.'s biggest sources of natural gas. 

Source: Energy Information Administration.

I'd also go out on a limb and suggest that improving home prices in Michigan could be playing a role in Silverado sales, too. Based on Barchart's nationwide ranking of housing prices, Michigan has experienced the ninth-best year-over-year change in home prices. As home prices rise the allure of building new homes and needing the hauling capacity to do so has the potential to increase as well.

Possible headwinds facing Silverado
Based on the above breakdown it would appear that the health of the energy exploration and production industry, as well as the agricultural industry in California, is paramount to Silverado's ongoing success.

One factor in the energy sector that investors would be wise to keep their eyes on would be the spot price of underlying commodities, such as West Texas Intermediate and natural gas, because any major reduction in these spot prices could reduce the desire to produce the commodities and possibly negatively affect Silverado demand.

The stance lawmakers take toward future production is also important. Fracking -- the use of high-pressure liquid to fracture rock so the oil and gas assets below that rock can be retrieved -- remains a hot-button issue that could have wide-ranging implications for the auto industry if energy companies are compelled to stop this practice of asset retrieval.

Source: Timothy Balogh, Flickr.

A more immediate headwind that's taking shape right now for Silverado is the record drought in California. With exceptional drought covering the majority of the state it's quite possible that crop production will be down this year. If farmers have crop insurance they'll be covered for their reduced output, but for those that don't (somewhere in the neighborhood of 15%) it could mean a lack of disposable income next year.

Finally, don't discount the health of the U.S. economy as a headwind. Autos aren't cheap investments for the average American, and if the job market or the economy aren't cooperating, then they're far less likely to buy a new vehicle.

How Silverado can gain ground on the F-Series
The real question GM investors need to be asking themselves is how can Silverado not only improve its sales trends, but also close the gap between it and the F-Series, which has been America's best-selling truck for more than three decades running.

2015 Chevy Silverado LT 2500HD. Source: General Motors.

The redesign will likely play a big role in that. Chevy wasn't exactly expedient with bringing its newly redesigned Silverado to market, as Foolish auto specialist John Rosevear explained last year, because it wanted to make sure it avoided the same initial launch problems that plagued the F-Series. The thinking was that holding off and ensuring there were no problems should translate into improved reliability and customer satisfaction, which over the long run can shift consumer sentiment in Silverado's favor. This isn't to say Silverado isn't already popular (remember, it is the second-best-selling vehicle in the U.S.), but improved perception of reliability could help it close the sales gap with the F-Series.

Within the scope of the redesign it was important for Chevy to keep the price of the Silverado fairly consistent with prior models, yet make strides to improve the fuel efficiency of its truck, which it did with the introduction of three EcoTec3 engine options. Better gas mileage with plenty of hauling capacity are a good combination for Silverado to attract both business and individual customers.

Discounting is another tactic GM could employ to gain ground on the F-Series, though it's a bit of a double-edged sword. While discounting would certainly appeal to businesses, which tend to be less loyal to a brand and more loyal to a good deal, excess or extended discount periods could eat into Silverado's margins. Since Silverado is such a vital component to GM's profitability, the possibility of margin erosion is a scary thought for shareholders. Then again, if Chevy can thread the needle with its discounts (i.e., not too much, but enough to attract new buyers) the volume boost and potential long-term gains to its brand image could more than cancel out the effect of discounting.

The bottom line
Based on its year-to-date sales it would appear that Silverado is on pace for similar sales relative to 2013, with perhaps a low-single-digit improvement. While a bit disappointing to see sales momentum waning so quickly after its redesign, there aren't too many headwinds currently working against the company, with the exception of California's record drought. As long as the U.S. economy and the energy complex remain on track, and GM doesn't let eight years go by again in between major Silverado redesigns, as it did between 2006 and 2014, there's no reason to believe annual sales can't eclipse the 500,000 mark on a regular basis.