Last week the iconic Jeep brand turned 75. As part of the celebration, parent company Fiat-Chrysler announced a $1.05 billion investment into the manufacturing of new Jeep products. The investment is part of FCA’s overall strategy of taking the iconic brand global, successfully seizing upon the opportunistic convergence of image, consumer preference and globalization. Meanwhile, General Motors sits on laurels with its own truck/SUV brand, GMC.
Comparing Jeep and GMC with a snapshot of the last decade would likely yield short-sided conclusions. In the last five years Jeep has become a global brand, selling products in Brazil, China, Europe and India. The globalization of Jeep led FCA to sell over 1.2 million Jeep products in 2015, the largest amount ever, thanks to successful products such as the Grand Cherokee and Renegade.
GMC, too, has been successful in recent years. GMC’s success has nothing to do with selling products in global markets and all to do with successful marketing. As GM’s “Professional Grade” brand, GMC has carved a niche for itself within the GM world for selling premium trucks and SUVs to higher-end customers than the Bowtie brand. It’s success, like Jeep’s, is due in part to an increased level of attention and R&D investment from the mothership in recent years.
Both brands are riding out consumer preferences that lean highly in their collective direction. Truck and SUV sales are booming in North America and global trends suggest that boom won’t be ending anytime soon. Jeep’s Grand Cherokee and GMC’s Yukon have both been sales successes thanks to both being good products, gas prices sliding down to manageable levels and the simple fact American’s still love SUVs. GMC and GM have undoubtedly also benefited from the fact that the half-ton truck market appears to have not yet hit its price ceiling in the U.S.
But digging back a little deeper into history shows that Jeep and GMC are actually not that far apart. The GMC brand is actually 104 years old, making Jeep’s 75th seem youthful. Both brands have largely avoided global sales (until recently), both have made a reputation for themselves around SUVs and trucks and both have largely been underutilized by their respective parent companies.
Now both brands lie at a crossroads. The inflection point of continuing incremental success, versus going for the gusto to actually seize the unique convergence of events that map their roads to success. FCA has made it clear that they are going to build the Jeep brand all they can, as proven by last week’s investment. GM, on the other hand…
Perhaps they’re still gun-shy after the debacle that was the Hummer brand. Perhaps building tarted-up Chevrolet products with higher margins is simply enough for them. Regardless, the success Jeep is seeing and the coming investment FCA is making into it really highlights GM’s lack of attention on their own truck brand.
Where is GMC’s answer to the Wrangler? Where’s its proper midsize SUV? These are questions GM seems unwilling to answer, despite even Ford joining the fray by bringing back the Bronco.
The strange part of all of this is that GM finally has the resources and (more importantly) the GMC dealership base to actually make something of the brand. The company is financially sound and ditching Pontiac has led to Buick-GMC stores that know how to handle premium customers. There’s also the important fact that GMC’s performance in recent years should help make the case internally to attempt growing the brand.
For example, Yukon Denali customers have a higher household income than Cadillac buyers. At one time the Acadia and Terrain crossovers held 60-percent conquest rates, while the average transaction prices of all GMC products continue to climb. The brand has been a sales and marketing success, despite not getting a tremendous amount of love from GM’s R&D department. The most recent samples being the 2017 Acadia and 2017 Canyon Denali – both half-baked attempts for a brand that deserves more.
So that leaves me here wondering what GMC could do if it actually had some resources behind it like what we’re seeing from FCA and Jeep. Perhaps GMC could fill the role as the poor man’s Land Rover?