Behind in mpg, GM says its trucks cost least to own
Commercials aim to blunt rivals' fuel-economy pitch
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DETROIT -- General Motors can't claim best-in-class fuel economy for its current Chevrolet Silverado pickup. But it's making a more expansive boast in recent advertising: lowest total cost of ownership.
In recent weeks, Chevy has been making the lowest-cost claim in TV commercials that have been used heavily by regional dealer advertising groups. GM pegs that distinction to a 2012 study by Vincentric, a Detroit-area research firm that rates the cost of ownership for 2,400 U.S. model configurations each year by weighing average transaction price, maintenance costs, depreciation and other factors.
"We just started a campaign on Chevy trucks where we have lowest total cost of ownership," GM North America President Mark Reuss said this month. "That includes operating costs. Inside of that is maintenance and real-world fuel economy."
The ads are a response to the fuel-economy boasts of its Detroit 3 pickup rivals. The marketing campaign for the re-engineered 2013 Ram touts its best-in-class 25 mpg in highway driving. And ubiquitous Ford F-150 ads trumpet the combined towing capability and fuel efficiency of the truck's EcoBoost V-6 engine.
Plugging the Silverado's lowest total cost of ownership "is a good way to remind customers that there are a number of elements that go into ownership costs, fuel economy being just one," a GM spokesman says.
Some dealers say that being able to make the lowest-cost claim can be a nice selling point if framed the right way for customers.
"It really sounds good if you're able to bottom line it for the customer by looking at the repair costs and all of the other expenses that go into ownership," says Rick Cantalini, general manager at Vandergriff Chevrolet in Arlington, Texas.
Vincentric's analysis factors in current market prices, incentives, residuals, fuel costs, repairs, insurance and other measures. It forecasts the cost of ownership over five years at various driving mileages.
This isn't the first time GM has ranked first in Vincentric's annual cost-of-ownership study. It has advertised the claim before, but mainly to GM's fleet customers, the GM spokesman says.
The focus on ownership costs hints at GM's strategy for its redesigned 2014 Silverado, which is scheduled to reach showrooms by early summer. Cost of ownership was mentioned frequently by GM engineers and executives at the truck's unveiling last month.
"We are seeing a lot of expensive technology migrating to full-sized trucks," such as turboboosters, found on Ford's trucks, and air suspensions, used on Ram pickups, the spokesman says. "Does this raise the cost for customers, many of whom are middle-class people using a truck to make a living?"
Rox Covert, who owns two Chevy stores near Austin, Texas, says the message of low maintenance costs resonates more today because the sluggish economy has made buyers more budget-conscious.
"It's perfect timing for that promotion," Covert says. "Buyers will forget about the price they paid for their vehicle. But they'll never forget what it cost them to own it and how they were treated during ownership."
You can reach Mike Colias at mcolias@crain.com.
