On Tuesday General Motors (NYSE:GM) revealed the next steps in its plan to take on America's best-selling luxury vehicle.
Those loaded pickups generate huge profits for the Blue Oval. Now, GM is moving to capture a bigger slice of this high-profit market niche with two new luxury truck models of its own.
An even-more-posh version of the Sierra 1500 pickup
The GMC Sierra already has the highest average transaction prices of any full-size pickup line. In plush "Denali" trim, the Sierra 1500's sticker price can break $60,000 if buyers choose a lot of options. The toll is even steeper on heavy-duty Sierra Denali models, which despite the price tags account for over 45% of Sierra HD sales.
But now, GM is upping its game two steps further. First up is an extra-plush Sierra, the 2016 Sierra Denali Ultimate. The Ultimate is essentially a loaded Sierra Denali 1500 with special 22-inch wheels and some exclusive high-tech features. Among those features: Noise-cancelling technology that eliminates much of the engine's sound in the interior. It's a touch borrowed from the latest Cadillac sedans.
GM didn't announce a price for the Sierra Denali Ultimate, but something in the neighborhood of $60,000 (for starters) seems a good bet. It'll arrive in the first quarter of 2016.
The newest GM luxury pickup: The GMC Canyon Denali
The other new luxury truck from GMC: A Denali version of the new-for-2015 GMC Canyon midsize pickup.
All of GMC's Denali-trim models offer a distinctive grille and special wheels. The 2017 GMC Canyon Denali will get those, along with a special jet-black leather interior, extra high-tech comfort and safety features, and other special trim pieces.
The Canyon and its Chevrolet Colorado twin have sold well since their debut late last year. The new Canyon Denali should help give the twins' average transaction prices a modest boost when it arrives in showrooms next fall.
"Denali" is GM's word for "profits"
"Denali" denotes luxury trims across much of the GMC product line. GM says that GMC's Denali models outsell the entire product lines of brands like Land Rover and Porsche, and account for almost 60% of sales of the big truck-based Yukon and Yukon XL SUVs. It's a big source of profit for the General.
Luxury trucks in general are drawing more interest from automakers. They're increasingly popular, and the profit margins are significant. Rival Fiat Chrysler Automobiles (NYSE:FCAU) upped its presence in the over-$50,000 pickup segment with the chrome-bedecked Ram Laramie Limited earlier this year. Fiat Chrysler is no slouch in this corner of the market: Premium versions of FCA's Rams are the second-best-selling vehicle line over $50,000, according to figures from TrueCar. GM says that sales of premium full-size pickups have grown tenfold since 2013. Clearly, Ford has gotten the lion's share of those sales, but just as clearly, GM wants a larger slice of that fast-growing pie.
With gas cheap and interest rates still low, expanding GMC's range of plush trucks seems like a smart move. The latest Denalis should give GM's North American profit margins a bit of a boost -- assuming that cheap gas and low interest rates continue.