To compete against the luxury pickups offered by Ford Motors (NYSE:F) and Chrysler, Chevrolet is adding a new pickup, High Country, to its Silverado series of pickup trucks. Ford recently unveiled its redesigned F-150 King Ranch, priced at around $44,000. Ford also added a new luxury pickup, Limited, to its F-150 series of trucks earlier in the year and is priced at more than $50,000. Currently, General Motors (NYSE:GM) has a very limited presence in the luxury pickup segment, mainly through the Sierra Nevadi. The top Silverado is in the mid-$40,000 range, so there is an opportunity for GM to offer pickups in the premium price category.
Luxury Pickups Gaining Popularity
Luxury pickups have been gaining ground with customers. In 2011, 13% of Chrysler’s light-duty Ram pickups were priced more than $40,000 compared to 9% in the previous year. Similarly, 29% of the total heavy duty Ram pickups sold were priced at more than $50,000 compared to 22% in the previous year.
Ford, which introduced the high-end Platinum in 2009, expected the vehicle to make up for 3% of total F-150 sales. But, to the company's surprise, the Platinum has been consistently accounting for 6% of F-150 sales. In total, 30% of Ford’s pickup sales come from luxury trucks, which are usually priced north of $35,000.
Ford’s line of F-series has been leading the pickup truck category in the U.S. for the last 30 years. This year has been no different, with the company having sold almost 402,000 units through August, an increase of 12.9% over the previous year. Chevrolet’s Silverado series is in the second spot with sales of little more than 261,000 units for the same period.
Furthermore, General Motors is in the final phase of its 2014 Chevrolet Silverado series and unveiled the new design photographs. The pickups will be available from next year. This is the first time that the automaker has redesigned its Silverado series since 2006. GM had been offering discounts of up to $10,000 on its pickups, so the new versions should help boost the pricing as well as profitability.
We currently have a Trefis price estimate of $24.90 for General Motors’s stock, which is about 5% above the current market price.
Disclosure: No positions.