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General Motors Company (GM), Ford Motor Company (F): The Company’s Silverado Looks to Disappoint

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Later this year General Motors Company (NYSE:GM) will be releasing its newly designed 2014 Chevy Silverado. It comes at a perfect time — we’re seeing a slight rebound in the housing market which is helping drive pickup sales this year. Not only that, but it has a year head start on major rival Ford Motor Company (NYSE:F)‘s next generation F-150. General Motors Company (NYSE:GM)’s profits have disappointed recently and the Silverado gives it a chance to boost the bottom line because each truck can bring in up to $10,000 in profit from each sale. How the Silverado sells once it’s released will be one of the biggest factors for investors looking to buy or sell GM stock. Will the new model meet expectations and sell, or will it flop? Let’s take a look at some details and see if the Silverado will disappoint or dramatically increase General Motors Company (NYSE:GM)’s sales.

Photo courtesy of GM

F-Series winning
The F-Series has been America’s best-selling truck for about 36 years now. However, when you combine Silverado and Sierra sales, it becomes a much closer battle for General Motors Company (NYSE:GM). Recently, Ford Motor Company (NYSE:F) has been winning the battle for truck sales and it hopes that trend continues until it can release its 2015 F-150. In March the F-Series sold 14 thousand more trucks than the Silverado and the Sierra combined. For Ford and GM that was good for 16% and 6% increases, respectively. GM is looking to take advantage of the surging pickup segment and reverse those numbers before Ford Motor Company (NYSE:F)’s new F-150 hits the market next year.

Functionality or appearance?
If you take a look at the 2014 Silverado in the photo above, do you think the redesign looks improved from the 2013 model that it’s going to replace? I sure don’t, and the critics were pretty harsh on General Motors Company (NYSE:GM)’s decision not to make many design changes. GM stood by its strategy to produce a design that was inoffensive and could sell across the nation. That said, how will consumers respond? Do they care about the appearance or is functionality the most important factor? We’ll have our answer – judging by sales figures – by the end of the summer.

Appearances aside, the new Silverado has changed some very important features. Seeing the success of Ford Motor Company (NYSE:F)’s EcoBoost engines, the GM has three “EcoTec” engines that are available for the new Silverado. Those consist of a 4.3-liter V-6, a 5.3-liter V-8, and a 6.2-liter V-8. All will have active fuel management that shuts off half of the engine’s cylinders when driving under specific conditions. It’s a decent step forward and GM claims its V-8 engine now gets one mile per gallon more than Ford Motor Company (NYSE:F)’s turbocharged V-6. GM has also been shouting to anyone who will listen that its trucks offer the lowest cost to own over the vehicle’s lifetime. Both will be big selling points to convince consumers on the fence to buy a Silverado instead of waiting for the next generation F-150, which — according to the Atlas concept — will offer a much different design. Ford has also punched back by saying its next F-150 could increase its efficiency by one-fifth, a significant increase with the looming CAFE standards on the horizon.

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