Monday, September 30, 2013

GM to Constrain Dealer Orders of Brand New Silverado & Sierra Pickups Due To Supplier Issues Affecting 5.3 L V8 Production

2014 Sierra: Best V-8 Pickup Fuel Economy in the Industry

According to sources withing GM, the Bloomberg news agency is reporting that the company is not keeping up with demand for the most popular version of the recently launched Chevrolet Silverado and GMC Sierra pickups, the trucks' first complete redesign since 2006. Apparently, a supplier for the 5.3 liter V8 is having trouble  making enough parts so GM is limiting the number of 5.2L equipped trucks that dealers can order. Bloomberg's sources disagree on how long it will take to resolve the supply issue, one said it could be as long as two months.

Full size pickups are not only GM's highest volume, most profitable vehicles, generating up to $10,000 in gross profit per truck, the new trucks are the centerpiece of a rollout of 18 all-new or redesigned cars and trucks for the automaker and represent a chance for GM to take market share from Ford, which won't have an all-new F-150 on sale until next year. Full size pickups account for about 16% of GM's global earnings and a Citigroup analysis says that the new trucks can boost GM's earnings this year alone by over a billion dollars.

The trucks are made at plants in New York, Mexico and Canada and the short supply will most affect those dealers who usually carry only V8 powered pickups. Dealers that order 10 trucks, for example, may only get 8, so the constraints will be measurable but not terribly tight.

The trucks are offered with three possible engines, the 5.3 V8, a 4.3 liter V6 and a larger V8 with 6.2 liters of displacement. Production of the six only began last month and the bigger V8 won't be available until later this year. GM expects the 5.3 to make up ~80% of production, as it did with the outgoing models.

GM has been running advertisements touting the fuel economy of the 5.3 eight, distinguishing itself from Ford's fuel economy offering to truck buyers, their six cylinder EcoBoost engine. A two wheel drive 2014 Silverado with the 5.3 liter V8 is EPA rated at 23 mpg in highway driving, compared to the regular 3.5 liter six cylinder EcoBoost powered 2WD F-150 is rated at 22 mpg (the flex fuel EcoBoost F-150 is rated at 23 mpg). Ford's standard V8 powered F-150 is rated at 21 mpg.

from The Truth About Cars


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