Easily one of the strangest times at the Silver Silos delivers us with an equally strange product predicament for the General. A long standing player in the commercial market, GM is currently without a linchpin product.
First lets consider the death of the Express 1500 tin can van. While its success has tapered off from the early 2000's, Chevrolet was still moving ~70K Express' per year. Granted much of the tapering has been a result of the smaller more nimble commercial vans coming online in recent years. The GMC Savana accounted for another 15-20K sales per year in the commercial market. In one fell swoop GM will be losing nearly 100,000 units from their commercial program.
Granted 100,000 units is not going to end a monolith the size of GM, but it certainly exacerbates another problem.
The Silverado is the most uncompetitive it has been in years and thats off the back of a complete redesign. Consumers have been underwhelmed with what appears (on the outside mind you) to be only a slight refresher. GM will be redesigning the Silverado again for next year at significant cost.
This is where it gets interesting. Silverado is still putting up similar numbers to its pre redesign, yet Chevrolet has been piling cash on the hoods in order to move them. Silverado's we're being sold at cost during May for example. They are losing gobs of money on this flub right now, between thin margins, cash on the hood and an unscheduled redesign GM could use a hero right now.
Could that hero be the City Express? The City Express will never be able to replace all the lost volume of the Express/Savana but they can at least stem the tide. As an example lets look at the effects Ford's Transit Connect had on their sales of the E-Series.
The TC showed up in NA in 2009, which coincided with a sharp downturn for E-Series sales. Of course not all of that is attributed to the TC, as 2009 shell shocked business and froze cap ex significantly. So lets fast forward to where the TC has established itself on the market and the E-Series has clawed back some of what it had lost post meltdown.
Lets consider 2008 and 2009 as anomalies, so using the 2007 values to the 2010 values, we see that the E-Series dropped 35% of its value. Is any of that attributable to the Transit Connect? Well the TC's volume in 2010 was 25% of what the E-series had in the same time period. And using the 2011 (27.3%) and 2012 (28.7%) values we can see that the TC stays consistent. While not a perfect correlation its clear that the TC certainly has stolen volume from the E-Series.
What will this mean for GM? Hopefully that the City Express can help stop the bleeding currently coming from GM's commercial operations.