General Motors Co (NYSE:GM) wants to boost the U.S. market share for its GMC truck brand by two-thirds over the next decade by advertising more heavily and introducing new vehicles, a top executive said on Monday.
To help with its goal to boost its share to 5 percent from about 3 percent now, it is almost doubling spending on the brand in that time frame, including boosting its U.S. advertising budget by 50 percent this year, Duncan Aldred, U.S. vice president in charge of GMC sales, told reporters at GM's headquarters in Detroit.
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"We just want to widen our consumer base out," he said. "There are plenty of opportunities."
GMC has five consecutive years of year-over-year growth, including an increase of 11 percent to almost 502,000 trucks and SUVs in the United States last year due to the introduction of the Canyon mid-sized pickup truck and Yukon full-size SUV.
Boosting sales further is important to the No. 1 U.S. automaker because the GMC models sport strong profit margins that will help the company achieve its overall profit margin target of 9 to 10 percent by early next decade, analysts have said.
Aldred said consumer consideration of the GMC brand remains low compared with its rivals at Ford Motor Co and Fiat Chrysler Automobiles' Dodge brand and historically GM has spent less on marketing and advertising for the GMC models but that is changing.
Aldred did not disclose how much GM will spend on GMC advertising this year, but WPP Plc's Kantar Media estimated the brand's U.S. ad spending in the first nine months of last year rose 14 percent to more than $177 million. GM's overall ad budget declined $300 million last year to $5.2 billion.
In addition to the 10-year sales target, Aldred said GM wants the GMC brand's U.S. retail market share to hit 4 percent within five years from about 3 percent now. While he did not say where GM would add models in the lineup specifically, he acknowledged it does not compete in such growing categories as compact crossover or a lifestyle vehicle like the Jeep Wrangler.
About 20 percent of all GMC sales include the premium Denali trim package of product features. Aldred expects those upgrades to increase to 25 percent within three years.
(Reporting by Ben Klayman; Editing by Lisa Shumaker)