Chevy Silverado overtakes Ram in U.S. pickup war

In 2019, Fiat Chryslerof (NYSE: FCAU) The Ram brand has overtaken General Motors(NYSE: GM) Chevy Silverado as the Pickup Model # 2 by Sales in the United States (Ram and Chevy have always lagged behind Ford Motor Companyof (NYSE: F) F-series trucks in the full-size truck market.) Some experts saw this as a rare change of guard in this ultra-profitable market segment.

However, the Chevy Silverado reclaimed second place in 2020. Additionally, including the Silverado’s top-of-the-line twin – the GMC Sierra – GM has overtaken Ford as the leading manufacturer of full-size trucks in the United States, while the market will remain very competitive, General Motors is well positioned to maintain its lead over the next few years.

Ram falls back to third place

A year ago, Fiat Chrysler reported that Ram truck deliveries were 633,694 in 2019, an increase of 18% year-over-year. This allowed it to easily overtake the Chevy Silverado for second place in the US truck market. Domestic sales of the Silverado fell 2% in 2019 to 575,600 units.

Image source: General Motors.

The success of the Ram brand in 2019 was no fluke. Fiat Chrysler has done a great job of uplifting the brand and designing great trucks. Indeed, different variants of the Ram pickup truck have been named “Truck of the Year” by Motor trend for three consecutive years.

That said, GM trucks have hordes of fans and brand loyalty tends to be very strong in the pickup truck market. General Motors executives have consistently blamed the 2019 market share losses on temporary supply constraints associated with the switch to all-new full-size truck models. And GM also has the GMC Sierra in its arsenal. Including the Sierra, GM delivered 807,923 full-size trucks in 2019, beating Ram by 27%.

GM’s performance in 2020 in the full-size truck market has confirmed the confidence of its executives. Domestic deliveries of the Chevy Silverado jumped 10% year-over-year in the last quarter, totaling 179,444 units: 11% ahead of Ram’s 161,266 deliveries. For the whole year, GM and its dealers delivered 594,094 Silverados in the United States: 5% better than Ram’s 563,676 deliveries. Including the GMC Sierra, GM delivered 847,110 full-size trucks to the United States last year. Not only was this 50% ahead of Ram, but it also pushed the General ahead of Ford as the nation’s top full-size truck seller. Ford delivered 787,422 F-Series trucks to the United States in 2020.

An impressive achievement given the supply constraints

General Motors’ growth and market share gains in the full-size truck market over the past year have been particularly impressive given how tight were stock levels.

All American car manufacturer faced supply constraints in 2020 due to the COVID-19 pandemic, which forced factories to halt production for much of the spring. However, GM faced additional headwinds. Due to a six-week UAW strike in fall 2019, it entered 2020 with lower than expected inventory, exacerbating the impact of the production shutdown.

Dealers have found ways to maintain truck sales even with minimal inventory, including pre-selling trucks before they even hit the field. Still, it would be reasonable to assume that sales would have been even stronger had it not been for supply constraints.

More offer is coming

In 2021, GM will likely continue to run its truck factories as fast as possible to produce Chevy Silverados and GMC Sierras. A few months ago, it increased the workforce at one of its truck factories to increase its monthly production by 1,000 units. Nonetheless, supply will likely be tight for most if not all of 2021.

Supply relief will come in 2022. GM is making a series of investments to restart production of the Chevy Silverado and GMC Sierra at its Oshawa plant in suburban Toronto in January 2022. This will coincide with the introduction of a major design update for the Silverado 1500 and GMC Sierra 1500 models.

In 2021, the Fiat Chrysler Ram may continue to challenge the Chevy Silverado for second place in the U.S. truck market, and Ford may have the opportunity to reclaim the overall title in full-size truck sales. But with inventory constraints likely to gradually ease over 2021 and increased production capacity early in 2022, GM is expected to expand its lead in this lucrative market segment by next year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Sally Dominguez

Check Also

Why Many Stores Don’t Use Their Smart Card Readers

What are you supposed to do when you pull out plastic to buy something in …

Leave a Reply

Your email address will not be published.