The GMC Denali and AT4 off-road models are now outselling Cadillac. What was once “the standard of the world,” Cadillac is now a brand nobody cares about. Sales across the board are in the tank as GMC overtakes it. Most Cadillac dealers are dualed with GMC, so GM should quietly drop Cadillac models until there is nothing left. Sort of like what Fiat Chrysler is doing with the Chrysler brand.
GM continues to invest billions of dollars on Cadillac without much in return. Yes, the margins are high when GM does sell one, but the corporation also needs some volume to amortize development costs. For all that GM has been doing to shore up the brand, it is time to pull the plug.
Denali and the AT4 trim levels now make up 40% of GMC sales in 2020. That is huge when you consider that GMC is mostly a pickup truck manufacturer. If Denali were its own brand in the luxury segment it would be competitive. Not that GM is considering that.
“In its own right Denali would be a very, very successful brand”
“In its own right Denali would be a very, very successful brand,” GMC vice president Duncan Aldred told GM Authority. “We’re not doing this by discounting or trying to go to the lower end. We’re staying true to the vision of being the only premium brand that occupies this space.”
Just as the Ram 1500 has attracted buyers with its luxurious interior, it would seem that premium trucks, SUVs, and crossovers are in high demand. And that is exactly what GMC sells. We’re talking vehicles over $60,000. In that arena, the margins are much higher for GM. That will help it towards its goal of finding capital for autonomous and EV pursuits.
Right now, every GMC model can be purchased with the AT4 off-road package with the exception of the Terrain. But that will be rectified in 2021 when the Terrain gets its own AT4 trim. Then the entire range of GMC models will be available with the AT4 optional package.
We are just a week away from the GMC Hummer reveal
Don’t forget that we are just a week or so away from the GMC Hummer reveal. The Hummer is GMC’s electric vehicle sub-brand. While we don’t know if the AT4 package will be adaptable to an EV, we know that GMC will load the Hummer up on premium materials and features.
There has been talking for years that GMC would be phased out with the hopeful bolster to Chevy truck sales. But the higher prices and more luxury appointments give GMC a unique position within the segment. And being a GMC helps to distinguish it from a Chevy truck to the masses.
So the bottom line is for GMC to become GM’s premium brand and to do away with Cadillac. Total sales of all Cadillacs for the last few years have been around 150,000. Over the past few years, GMC has solidly sold over 560,000 each year. Buick gets above 200,000 for the last several years, while Chevy sells a bit more than 2 million vehicles per year. As of right now, Cadillac has sold around 85,000 for 2020. At this rate that number will average out to under 10,000 vehicles sold per month. It just doesn’t look good for Cadillac post-coronavirus.