2018 GMC Terrain Denali (Photo: GMC)
General Motors is feeding its golden goose.
The automaker, which once behaved as if “brand strategy” were another term for wringing every penny from its brands today with little thought of the future, is investing in new vehicles and features to strengthen its low profile but hot-selling and highly profitable GMC brand.
“We have huge ambitions for the brand,” Duncan Aldred, the executive who runs the GMC and Buick brands, said at dinner in a restaurant overlooking downtown Pittsburgh the night before I tested the new 2018 GMC Terrain compact SUV.
That means new vehicles on the horizon with luxury touches and features to strengthen GMC’s image.
“We have a clear understanding of what this brand needs to do going forward,” said Phil Brook, Buick GMC vice president for sales and marketing. “We’re in a good spot, but there’s more to do.”
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GMC sells 700,000 vehicles a year in 12 countries, primarily North America and the Middle East. All its vehicles are pickups and SUVs. It’s GM’s second-best selling brand in the U.S. Its vehicles sell for higher average prices than luxury brands including Acura, Infiniti, Lexus and Lincoln.
“The GMC brand means something to consumers. They believe it’s enough different to pay extra for it. GM must nurture and cultivate that,” IHS Markit senior analyst Stephanie Brinley said.
For most of my career, my cynicism about GMC knew no bounds. I believed the brand existed to soak gullible customers by charging premium prices for gussied-up Chevrolets. Owners thought a GMC was something special, but to my mind, the differences didn’t amount to a hill of beans: mildly different hoods, grilles and lights; maybe a bigger engine in the top model. General Motors was happy to charge its customers premium prices, but disinclined to deliver an actual premium vehicle behind the GMC badge.
1910s: The GMC name takes its place on a truck grille for the first time in 1912 and the mix of trucks offered had either upright front ends or curved, “French” fronts. In the picture: 1913 GMC 2 ton pickup truck. (Photo: GMC)
I thought my low regard for the brand’s actual value was unique. Then I had dinner with Duncan Aldred. He had no experience with GMC three years ago, when he came to Detroit after 14 years with GM’s European Vauxhall and Opel brands. So he asked people, “What does GMC mean?” Not other GM executives. Random strangers.
What did they tell him?
“They said a GMC was a nice Chevrolet,” Aldred told me. That wouldn’t do, he continued in his practical Northern England tone. Customers would eventually wise up and stop paying premium prices for GMCs. Then it would be Sayonara, profit center. It’s happened before, mostly to brands that no longer exist, like Mercury.
Mercury was able to charge more for vehicles that were basically Fords with a different grille for years, until customers wised up. At that moment, Mercury was a dead brand rolling. Ford dropped it in 2010.
“Investing to make GMC more different from Chevrolet is absolutely the right thing to do,” KBB executive analyst Rebecca Lindland said. “The brand has an import-like appeal,” despite the fact that its product line of pickups and SUVs is as American as tailgating before a football game. “It has a more global feel than Chevrolet. GMC is very popular, and a real premium vehicle, in the Middle East.
“If they get it right — embrace and honor the distinctions between GMC and other brands, it can be tremendously successful and profitable.”
The plan for that is coming into focus. GMC’s new Terrain compact SUV shares its basic engineering with the Chevrolet Equinox, but the pair look nothing alike and the GMC has unique features such as an innovative new shifter design, real aluminum trim and automatic parking.
2018 GMC Acadia Denali (Photo: GMC)
There’s no Chevrolet equivalent to the GMC Acadia midsize SUV that debuted last year, though it’s widely expected Chevy will add one in a year or two. If that happens, the two vehicles’ design and features will test GM’s commitment to making GMC truly different.
“We have a very clear understanding of what this brand has to do going forward,” Brook said. “We’re in a good place, but there’s more to do.”
It will also become more important to reinforce the differences between GMC and Buick. They share dealerships and showrooms in the U.S., and Buick is evolving into an SUV-led brand.
The GMC Acadia plays a role there, too. The current model moved down a step in size so it doesn’t compete with the bigger Buick Enclave. The first-generation Acadia and Enclave were nearly exactly the same size. They looked very different, but had most of the same features and systems.
Differentiation starts with key words defining the brands, Brook said.
GMC — Bold, capable, industrial, premium and powerful
Buick — Attainable luxury, progressive, modern, inviting, with efficient performance.
“Each brand will have a distinct personality,” Brook said.
Buick and GMC’s exterior and interior designs will move farther apart, with more to come on upcoming models.
A frame grab from the 60 second commercial from GMC titled, “How Do You Want To Live–Anthem.” It debuted in June 2017. (Photo: GMC)
In addition, the brands’ advertising and marketing approaches will aim for different audiences. GMC is adding a new message to its long-running “Professional Grade” slogan with a new “Like a Pro” campaign that humanizes the brand and moves it from shots of construction work sites to family settings.
“We’re going to give professional grade a stronger meaning,” Brook said. “Move from telling people what a vehicle is about to who the vehicle is for.”
Contact Mark Phelan: 313-222-6731 or Media Follow him on Twitter @mark_phelan.
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