General Motors Company (GM)’s New Silverado Is Number One

Inventory
GM’s management will have to carefully control the 2013 Silverado inventory, which spiked early this year. GM decided it won’t increase pricing on the 2014 model, which is an aggressive move and will make selling old 2013 models more dependent on a major boost in incentives. In other words, General Motors Company (NYSE:GM) could be stuck with less favorable options to move the old trucks off the dealer lots. Correctly timing the launch of the new model while winding down current inventories will be key to considering this launch a success.

Bottom line
GM’s past management ran the company into the ground before the recession came along and finished the job. With a new crew running the ship, things have steadily improved, albeit more slowly than at rival Ford Motor Company (NYSE:F). By 2016, General Motors Company (NYSE:GM) is going to replace, refresh, or redesign 90% of its vehicles, and proving to investors in the meantime that it can have successful vehicle launches could boost demand for its stock. GM wants to avoid ugly recalls shortly after the release of its vehicles — as Ford Motor Company (NYSE:F) encountered with the popular Fusion and Escape models — and it certainly wants to avoid taking too long to get finished products to the lots, which is what happened with the Lincoln MKZ.

In short, this is the single most important launch for GM in the past 10 years. The world is watching, and as an investor, I hope GM does it right the first time.

The article GM’s 2014 Silverado Is No. 1 originally appeared on Fool.com and is written by Daniel Miller.

Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.