The automotive industry has been divided when it comes to the midsize truck segment. Ford Motor Co. and Fiat Chrysler Automobiles respectively discontinued the Ranger and Dodge Dakota, while Toyota Motors and Nissan continue to sell the Tacoma and Frontier. General Motors initially followed its Detroit rivals before flip-flopping and recently bringing back the Chevrolet Colorado and GMC Canyon.
One thing is clear: GM believes it made the correct strategic decision and its marketing team is in full spin mode. Let's look at a few recent claims from GM and put some much-needed context around the arguments.
Chart by author. Information source: GoodCarBadCar.net.
Chart by author. Information source: GoodCarBadCar.net
Also, because midsize trucks are less expensive, the revenue and margins generated will be lower than for than full-size trucks. Now, this isn't to say the Chevy Colorado isn't valuable, it certainly is. It's just important for investors to understand the difference between "reinvigorating" the midsize market and ruling the full-size market, as Ford's F-150 does.
Maybe I'm being unfair to GM's midsize Colorado -- which for the record was named 2015 Motor Trend Truck of the Year and Cars.com's Best Pickup Truck of 2015, and seems to be a solid product -- but, some of these claims are clearly marketing spin and should be considered skeptically.
It will be a while before we can truly understand if GM's return to the midsize truck segment is truly reinvigorating the segment and just how valuable it is; chances are, we'll have to do some extra homework to add context to the claims.
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The article Why We Should Take General Motors' Recent Claims With a Grain of Salt originally appeared on Fool.com.
Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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