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GM sees 'strong year' in 2018, then gold in Chevy Silverado for 2019

DETROIT — General Motors said on Tuesday it expects earnings in 2018 to be largely flat compared with 2017, but that profits should pick up pace in 2019 as its revamped line of high-margin pickup trucks hits the U.S. market. The 2018 earnings outlook was above market expectations, sending GM shares up more than 3 percent in premarket trading. "GM had a very good 2017 as we continued to transform our company to be more focused, resilient and profitable," GM Chief Executive Mary Barra said in a statement. "We are positioned for another strong year in 2018 and an even better one in 2019." GM and its Detroit rivals, Ford and Fiat Chrysler Automobiles, are bringing on new trucks at a time when overall U.S. new vehicle sales have been falling, but truck sales continue to grow as consumers abandon passenger cars in favor of pickups, SUVs and crossovers. GM on Saturday fired a new round in the battle for profits from one of the U.S. auto industry's most lucrative segments when it showed a new generation of its Chevrolet Silverado pickup truck at the Detroit auto show. The new Silverado, a highlight of the event, is the successor to GM's best-selling vehicle in North America. Sales of the current Silverado rose nearly 2 percent to 585,000 vehicles in 2017. In the coming months, the company will also reveal a revamped GMC Sierra pickup truck. U.S. new vehicle sales fell 2 percent in 2017 after hitting a record high in 2016, and are expected to drop further in 2018 as interest rates rise and more late-model used cars return to dealer lots to compete with new ones. GM said on Tuesday that while it retools a factory in Ft. Wayne, Indiana, to make the new pickup trucks, it will shift some production to an Oshawa, Ontario, plant in order to avoid missing sales in a hot market for the vehicles. The No. 1 U.S. automaker said it will record a $7 billion non-cash charge for its fourth-quarter 2017 earnings related to deferred tax assets. GM said it expects capital expenditure in 2018 of around $8.5 billion, about $1 billion of which will go toward funding self-driving car technology. Last week, the company said it is seeking U.S. government approval for a fully autonomous car — one without a steering wheel, brake pedal or accelerator pedal — to enter the automaker's first commercial ride-sharing fleet in 2019. GM said it expects 2017 earnings per share at the high end of its previously forecast range of $6 to $6.50.

Buick to kill Verano as early as 2017

The Buick Verano's days are allegedly numbered. Citing unnamed sources, Automotive News is reporting that Buick will kill its Delta-platform-based sedan. The company offered the typical "no comment." According to AN, Buick is expecting 70 percent of its sales to come from the Encore, Envision, and Enclave once the Envision goes on sale. And it doesn't take a professor of economics to recognize that when half the vehicles you build account for just 30 percent of the sales, it's time to trim. But the case for killing the Verano is a weird one, because the problem isn't a lack of demand. Struggling sales might be the reason to kill a car, but the Verano is – and has consistently been – Buick's second best-selling sedan. It's beaten the slightly larger, more expensive Regal by at least 12,000 units in each of the last four years. Hell, in 2013, Buick sold 45,000 Veranos to fewer than 19,000 Regals. So why not kill the Regal? Well, the Verano's raison d'etre is irrelevant today. Buick launched its smallest sedan at a time when premium compact four-doors weren't a thing and gas prices were high enough that consumers were still hesitant to tie themselves to a CUV's fuel bill. And while it was roughly the same size as the Chevrolet Cruze that it shared GM's Delta platform with, it had enough unique equipment to stand apart and warrant its price premium. Today, fuel prices are cheap and consumers are flocking to crossovers while Buick is stuck sharing the premium compact pie with much more prestigious names ( Mercedes-Benz and Audi). And because it's sharing showroom space with the super-popular Encore, even the Verano's affordable pricing has become a liability. Today, a lightly equipped Verano is the same price as a base Encore, and they offer broadly similar features (rear-view cameras, a seven-inch touchscreen with Intellilink, Bluetooth, etc.). And if the Encore is too small, there's probably a GMC Terrain sitting in the same showroom, offering more utility and equal equipment to the Verano for a similar price. As one dealer told AN, "For not much more money, customers can get an SUV." Killing the Verano might risk 30,000 to 40,000 sales, but it's a move that proves Buick has tremendous confidence in its CUV lineup – clearly the company thinks the Encore can do the job of luring customers into showrooms. AN's sources claim the Verano will survive through 2017, so we'll be waiting a few years to find out if that faith is misplaced. Related Video:

Buick begins offering 24-hour test drives

Even as the year's sales charts show a decline, Buick says its brand image is improving. To bolster that soft metric while it works on overhauling its lineup - consumers are clamoring for more crossovers - the brand will begin offering overnight test drives as of July 23. Buick trialled the program in Phoenix and got a good response, so it rolls out as an ad-supported nationwide campaign called "24 Hours of Happiness" as of July 22. The push is on probation for three months while Buick evaluates it, but they expect it to continue beyond 90 days. Cars will be sourced from the loaner fleets that dealers offer customers whose cars are in for service, so only dealers with such fleets will be able to participate. General Motors did the same thing in 2003 and 2004, at the time saying it led to more than 500,000 "extended" test drives and close to 190,000 sales. That program had a cash component, in that buyers were offered $250 if they chose a non-GM vehicle after their test drive. 24 Hours of Happiness won't come with any inducements; Buick is taking the long view, positioning this as support for the brand instead of as bait for immediate returns. The Phoenix dealer who ran the program first said that it got fewer bites than he expected, but that customers who took a car home "were far more likely to buy the vehicle." Cue the Regal GS hooning in three, two... Related Video: