Silverado edges out Ram in the truck wars as automakers report dismal overall sales

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The 2020 Chevrolet Silverado 2500 HD Z71 can tow up to 18,510 pounds (up to 35,500 if you opt for the 3500). - Chevrolet/TNS/TNS

DETROIT — The Chevy Silverado is keeping the ever-encroaching Ram at bay in the ongoing truck wars, despite overall dismal industry auto sales in the second quarter due to the global coronavirus pandemic.

On Wednesday, many automakers reported quarterly sales results that reflected the impact of idled vehicle production for most of the quarter and stay-at-home and related orders in many places hampering sales.

General Motors reported its quarterly sales were down 34% and Fiat Chrysler Automobiles reported a 39% plummet in sales.

Some other notable automakers to report depressing sales results included American Honda, which saw sales decline 27.9%, and Nissan Group saw sales crash by 49.5%. Nissan’s highly profitable Pathfinder SUV experienced a 26% decline in sales.

The ‘X factor’

Analysts say the lackluster results are merely a bump in the road that don’t necessarily indicate long-term losses.

“Sales results for GM and FCA would be disappointing if there was no global pandemic, but the past few months have shown that consumers have an appetite for SUVs and trucks so that sets them up in a good position, especially as GM is rolling out its full-size SUVs which are perfect for summer road trips,” said Jessica Caldwell, executive director of insights at Edmunds.

Caldwell warns that the “big ‘X factor’ moving forward is whether there will be a return to shelter in place orders which will hurt consumer confidence and create more trepidation in the workforce.”

Truck wars

One notable spot in the quarterly sales results is that even though Silverado sales were down compared to the year-ago quarter, it narrowly edged out Ram by 4,984 units.

For the quarter, GM sold 122,432 Silverado pickups, which includes light-duty, medium-duty and heavy-duty. FCA sold 117,448 Ram pickups, which it doesn’t break out by model.

It’s a consecutive quarterly win for the Silverado and that’s significant because the Silverado and Ram have been battling it out for what inevitably ends up as the number two spot behind the nation’s usual favorite, the Ford F-150.

It’s expected the F-150 will hold onto the top spot when Ford reports its sales.

Recently, the Ram has been a serious challenger to the long-standing second favorite, Silverado. The Ram topped the Silverado in total sales for 2019 by 10.1%.

“The fact that it’s surprising to some that Silverado has regained the number two spot shows how far Ram has come with their pickup truck strategy in just a few years,” Caldwell said. “The truck wars have never been more heated as consumers continue to demand these vehicles and inventory dwindles during this global pandemic.”

Given that pickups add big profits to the automakers’ bottom line, every sale is important, Caldwell said, especially as nearly every sale is going to a retail customer versus a commercial fleet.

Refilling the pipeline

GM’s second-quarter total sales plummeted due to the impact of the COVID-19 pandemic and as dealers struggled on lean inventories. GM restarted its North American production on May 18, but it took time to refill the product pipeline.

“GM entered the quarter with very lean inventories and our dealers did a great job meeting customer demand, especially for pickups,” said Kurt McNeil, GM’s U.S. vice president of sales operations. “Now, we are refilling the pipeline by quickly and safely returning production to pre-pandemic levels.”

All of GM’s brands experienced declines: Buick, 36%; Cadillac, 41%; Chevrolet, 34%; and GMC, 33%. But a handful of models showed some increases, such as the new Chevy Blazer and GMC Sierra heavy-duty pickup. The new Blazer midsize SUV’s sales rose 67.6% and the Sierra heavy duty rose 7.6%.

Even though the Silverado beat Ram in total sales, Silverado’s light-duty sales tumbled 18.6% to 89,465 and heavy-duty Silverado sales slid 0.7%. Medium-duty Silverados, which are sold to fleet customers and small business owners, shot up by 62.6% to 1,688 units.

The second half appears brighter, said McNeil, as GM gets the right mix of vehicles to dealers and promotes the online shopping benefits of its Shop. Click. Drive. GM’s retail sales dropped 24% in the quarter, roughly in line with the industry.

Gladiator a bright spot for FCA

Fiat Chrysler’s 39% quarterly drop compared with April, May and June 2019 meant 367,086 vehicles sold, down from 597,685. The carnage was felt across all brands and every model except one, with the lone bright spot being the Jeep Gladiator. The Gladiator, however, was a new model last year and was still ramping up so the results are not a good gauge.

Even Ram pickups, which have powered the company’s profits in recent quarters, saw a steep decline, off 35%.

The brands all slipped. Jeep was down 27%; Ram dropped 35%; Chrysler fell 58%; Dodge fell 63%; Fiat was off 54% and Alfa Romeo declined 21%. The company did not release sales for Maserati.

The company noted that fleet sales were down as customers reduced or delayed orders, but said that retail was stronger than expected by the end of the quarter.

“This quarter demonstrated the resilience of the U.S. consumer,” said Jeff Kommor, FCA’s head of U.S. sales, in a news release. “Retail sales have been rebounding since April as the reopening of the economy, steady gas prices, and access to low interest loans spur people to buy.”

FCA’s fleet volume remained low during the quarter, Kommor said, as the company prioritized vehicle deliveries to retail customers.

“As a result, we have built a strong fleet order book which we will fulfill over the coming months,” Kommor said.

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