As General Motors tries to revitalize the images of Chevrolet, Buick and Cadillac, executives might want to take a page from the playbook of their lowest-profile brand: GMC.
The truck brand has emerged as GM's healthiest since the automaker's exit from bankruptcy five years ago. GMC has outgained the bread-and-butter Chevy brand in market share since 2009, with a fraction of the marketing budget. Its revitalized lineup is commanding the biggest jumps in transaction prices of any GM brand. GMC's high-end Denali trim level has become a juggernaut while cultivating a loyal following among affluent, do-it-yourself types, outselling entire brands such as Lincoln, Jaguar and Land Rover.
GMC, derided a decade ago as a collection of rebadged Chevys, is carving a niche as a premium truck brand - witness the customers lining up to pay $70,000 for the redesigned 2015 Yukon XL Denali. Last month, Kelley Blue Book named GMC the "most refined" brand among nonluxury marques. It has forged a clear brand identity through its "Professional Grade" marketing campaign, in place since 1998, during which time its corporate sibling brands have cycled through many advertising themes.
"We think of GMC as a niche brand for a very specific consumer mindset," says Roger McCormack, GMC marketing director. "But it's a 450,000-unit niche of profitable truck business."
For much of its 102-year history, GMC has padded GM's bottom line by selling trucks built on the same platforms as Chevrolets but priced higher. Until the early 1970s, the higher prices were justified by better powertrains and features not found in the Chevys, says John Wolkonowicz, an independent analyst and automotive historian in Boston.
From the 1970s on, that distinction blurred amid GM's cost-conscious culture, as GMC became essentially a way for GM's non-Chevy dealers to sell trucks, even GM executives concede. As recently as 1999, GMC was marketing its long-wheelbase SUV as a Suburban, not even trying to separate the vehicle from the Chevy Suburban. GMC adopted the Yukon XL nameplate for the 2000 model year.
But GMC's vehicle designs have been diverging from Chevy's since the mid-2000s, Wolkonowicz says. That was punctuated by the introduction of the GMC Acadia large crossover in late 2006 and the Terrain compact crossover in 2009, which differed sharply from their Chevy counterparts, the Traverse and Equinox.
Since 2011, GMC customers have rated exterior styling as their No. 1 or 2 reason for purchase, McCormack says. The chiseled, industrial-looking designs of the 2014 Sierra full-sized pickup that debuted last year and the 2015 Canyon mid-sized pickup due in the fall represent stark departures from their Chevy counterparts.
"The people who buy GMCs are convinced they're getting something special, even though there isn't much difference from the Chevy beyond styling," Wolkonowicz says.
Denali drives growth
GMC's latest entries have climbed so far up the premium ladder that now the brand has to worry less about overlapping with Chevy than bumping into Cadillac. Helen Emsley, executive director of global GMC design, encountered that problem when she lobbied to put real wood interior trim into the '15 Yukon and Yukon XL Denali, launched in February.
"Everybody told me, 'Oh you can't do that. That's an Escalade thing,'" says Emsley, a longtime Yukon XL Denali owner. "I said, 'No. These owners expect craftsmanship, real materials, a hand-stitched look.' We fought for it, and we got it."
Denali - a loaded trim level that often includes a more powerful engine, such as the 6.2-liter V-8 on the Yukon and Yukon XL vs. a 5.3-liter - has driven GMC's sales growth. GM says it accounted for about 20 percent of GMC's 450,901 unit sales last year, while elevating some models into luxury strata.
The demographics of a Yukon XL Denali buyer suggest that the upscale line is pulling in a different breed of customer. Average household income: $188,000, vs. $134,000 for owners of non-Denali Yukons, GM says. Average age: 46, the youngest of any GMC model. Average transaction price: about $68,000.
Those figures suggest that there isn't much keeping those buyers from stepping up to an Escalade, which starts at $72,690, including shipping, for the redesigned 2015 model that debuted last month.
But that belies the low-key psychographic of the GMC buyer.
"They don't want to be seen as flashy," Emsley says.
Price producer
| GMC tops GM's increases in average transaction prices. |
| | 2009 | 2014* | Change |
| GMC | $35,915 | $40,099 | 12% |
| Chevrolet | $28,514 | $31,301 | 10% |
| Buick | $34,252 | $33,798 | –1% |
| Cadillac | $50,307 | $48,177 | –4% |
| Industry average | $28,196 | $31,607 | 12% |
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