GM Shrinks Acadia SUV Size, Price as GMC Brand Seeks Sales Boost

  • Current model's record deliveries still trailed competition
  • `I think we can make big gains with this,' VP for brand says

General Motors Co. has decided to shrink its GMC Acadia and cut the price, after the mid-sized sport utility vehicle posted record U.S. sales last year but was outgained by rivals like the Honda Pilot.

In an era when cheap gasoline has consumers seeking bigger and roomier trucks, GMC is shrinking the Acadia by three inches (7.6 centimeters) in width and seven inches in length, making it a bit shorter than the Pilot. The crossover SUV also is shedding 700 pounds (318 kilograms) to improve fuel economy.

GMC is reducing the price by an undisclosed amount, with the hope of a big jump in sales for a vehicle that’s in the hottest part of the U.S. auto market. The smaller size may also get more buyers to give it a look because the new model will be easier to park and drive.

“I think we can make big gains with this,” Duncan Aldred, the vice president for GMC, said in an interview at the Detroit auto show, where the new SUV was unveiled. “I was concerned that we had the formula right, so why change it? But our competition is selling 50 percent more of them than we are.”

The redesigned 2017 Acadia goes on sale in May.

The current Acadia sells for an average transaction price of about $39,000, according to the automaker. That compares to about $37,000 for a Pilot, according to Kevin Tynan, an analyst at Bloomberg Intelligence. Lower pricing should help GMC boost sales, he said.

“They may have found that being bigger and more expensive than competitors was not really helping them,” Tynan said.

Seating, Fuel Economy

The Acadia can still seat as many as seven people, though the third row of seats is now much tighter than the bench in the model it will replace.

The smaller size and weight mean the new Acadia will get 28 miles per gallon on the highway, compared with 24 mpg for the current model. Customers also complained that the current vehicle was tough to park and maneuver, said Rick Spina, GM’s executive chief engineer for compact and crossover SUVs.

GMC sold 96,393 Acadias in the U.S. in 2015, a 15 percent increase from the previous year. That trailed deliveries of 136,212 and a 25 percent jump for the Honda Pilot.

GM’s Chevrolet division last year sold almost 120,000 of the Traverse, which is similarly sized as the Acadia and built with the same hardware underneath. Buick also has a sibling of the Acadia, the Enclave, which sold about 62,000. Since the vehicles all share a similar platform, they could all end up being downsized, Tynan said.

Different Demographics

With GMC, the automaker reaches a different kind of buyer than with Chevrolet. GMC attracts a higher percentage of women because the brand’s squared-off “industrial sculpture” styling, as GM calls it, makes the vehicles look safe, Aldred said. The buyers also tend to be more educated and have higher incomes than Chevy buyers, he said.

If GM can get the added sales volume, the company’s total profit may rise even with the vehicle’s lower price. That would be a boon for GMC which is the automaker’s most profitable division. The brand sells only pickups and SUVs that are jointly developed for other GM brands, lowering engineering costs.

“GMC might be the most profitable brand in the industry,” Aldred said.

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