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GMC takes premium approach to compact SUV segment with 2018 Terrain

29 August 2017 Stephanie Brinley, MBA

The GMC Terrain occupies a premium space within the standard utility vehicle segment, differentiated from its Chevrolet Equinox sibling through design and content. With the second-generation Terrain, GMC has increased the differentiation with the Equinox.

IHS Markit perspective

  • Significance:GMC's newest utility vehicle, the new-generation Terrain, is arriving at US dealerships in August, with more style and technology than the outgoing vehicle.
  • Implications:The Terrain accounted for 16% of GMC's US sales in 2016; one of the opportunities for improving volume is to increase awareness of GMC's presence in the segment.
  • Outlook: The Terrain competes in the largest segment in the US, standard compact utility vehicles, and the latest iteration brings more technology, useful features, and a commanding road presence. The Terrain is a counterpart of the Chevrolet Equinox. While the Terrain has captured only about 3.5% of the US standard compact SUV segment, its higher pricing is expected to ensure it contributes a greater share in terms of profitability.

GMC has introduced the second-generation Terrain, available at US dealers from early August. IHS Markit recently had the opportunity to drive the new Terrain and speak with GMC executives about the utility vehicle, which is the better-dressed sibling of the Chevrolet Equinox. As such, there are many similarities between the two vehicles, but also differences in design, equipment, and technology that help support the more upscale GMC image.

Image courtesy of Stephanie Brinley

As with the Equinox, the 2018 model-year Terrain offers three turbo-charged, 4-cylinder powertrain options. These include 170-hp, 1.5-litre and 252-hp, 2.0-liter turbocharged gasoline (petrol) engines and a 136-hp, 1.6-litre turbo-diesel. The two gasoline engines are mated to General Motors' (GM) new 9-speed automatic transmission, while the diesel has GM's 6-speed automatic. The Terrain is standard in front-drive form, with all-wheel drive optional.

One differentiator in the Terrain is the transmission's electronic shift control. Described as "Electronic Precision Shift", drivers select a gear through pull buttons at the lower portion of the centre console, using a push button to return the vehicle to 'park'. This is exclusive to the Terrain, and the Equinox uses a more conventional shift. The GMC approach to the electronic shift is among the best we have seen to date. The look of the control met with a mixed reaction during the reveal at the 2017 North American International Auto show, but in real-world use, it is intuitive and effortless. Moving to an electronic shift control and removing the mechanical linkage opens up more space in the centre console, but it also means there is much more flexibility in determining how to select gears. The Terrain solution is simple and becomes natural after the briefest of drives. With GM's focus on safety, the system is designed to anticipate possible mistakes a driver might make and eliminate or reduce their occurrence.

The Terrain offers many of GM's safety and connectivity technologies, though its driver assist systems stop short of offering adaptive cruise control. This is not the platform on which GM is advancing its driver assist technologies with new features. In terms of safety and connectivity technology, the Terrain offers a safety alert seat, surround vision, forward collision alert with following distance indicator, low-speed forward automatic braking, lane-keep assist with lane-departure warning, rear seat reminder (alerts to people left in the back seat when exiting the vehicle), lane change alert with side blind-zone alert, and rear cross-traffic alert, as well as GM's teen driver function. Unlike Toyota and Honda, however, GM is bundling the most expensive driver assist systems with the trim level ladder. The Denali trim has the most driver assist content as standard.

The Terrain also offers a 360-degree camera for parking assist and an automatic parking assist function, neither of which the Equinox offers. MyLink infotainment systems with Android Auto and Apple CarPlay support, 7-inch or 8-inch displays, and available OnStar 4G LTE are also offered. The Terrain is the first GM product to benefit from a new generation of infotainment system, with updated user interface graphics, faster processing, and the ability to create profiles for different users, including saving various system settings.

While the prior-generation Terrain was a bit large for the segment, the new-generation model is smaller, and GMC is betting the new size will prove more popular. The smaller vehicle is also lighter by about 350 pounds, depending on trim level and engine combination. The new Terrain loses just over five inches in wheelbase length and a little more than three inches in overall length. The new Terrain has a wheelbase of 107.3 inches rather than the 112.5 inches of the outgoing generation and is 182.3 inches long rather than 185.5 inches.

Image courtesy of Stephanie Brinley.

Despite the smaller size, the 2018 Terrain's new exterior improves the on-road presence of the vehicle and offers substantial differentiation from the Equinox, as well as offering distinct grille treatments between the standard Terrain and the up-level Denali. GMC's vice-president of global sales, Duncan Alder, also stated that GMC has been able to increase the share of the Denali sub-brand sales from about 19% of GMC's sales a few years ago to 29% of all GMC sales over the first half of 2017. For the Terrain, the share of the Denali is lower, though the executive also acknowledged that the Denali version of the first-generation Terrain was not as well executed as some other Denali efforts. This is not true of the 2018 model-year Terrain Denali, which does offer increased content, up-level trim materials inside, and a bolder look outside. The Terrain Denali takes a stronger grille with more chrome, as well as offering 19-inch wheels to help dress it up. The Terrain Denali also takes more standard equipment, including hands-free power liftgate, the top version of the new infotainment system, the 2.0-litre 4-cylinder engine, LED headlamps and several driver alert features. The interior trim materials in the Denali are specific to that level as well.

Outlook and implications
The Terrain competes in the largest segment in the United States, standard compact utility vehicles, though its premium positioning contributes to a sales volume in the middle of the pack. The new iteration brings more technology, useful features, and a commanding road presence. Competing in the largest segment in the US, the Terrain is a profitable counterpart of the Equinox. While the Terrain has captured only about 3.5% of the US standard compact sport utility vehicle (SUV) segment, its higher pricing is expected to ensure it contributes a greater share in terms of profitability.

Within the GMC product line-up, the Terrain has accounted for about 16% of GMC sales and is forecast to hold that proportion going forward. GMC is best-known for its full-size trucks and SUVs, with the smaller Terrain still working to overcome awareness issues, according to Aldred. As is the Equinox, the new Terrain is better sized than its predecessor for the segment. Based on initial drives, the all-turbo, smaller displacement, more efficient engine family delivers compelling options. Though the top engine is now a 252-hp 4-cylinder, instead of the 301-hp V6, it delivers solid acceleration, easily better than several other options in the segment. The 9-speed automatic transmission of the gasoline engine vehicles is smooth, and the standard stop-start on all engines in the line-up is the best currently available.

The diesel engine gives GMC an opportunity to pick up buyers seeing fewer options for the powertrain in the compact segments as a result of Volkswagen ending its US diesel offerings. In the Terrain, GMC has ensured a quiet diesel experience, with strong torque overcoming the lower power output. Though this is a segment that has not been known for diesel options, with the 2018 model year, there will be three: the Terrain, Equinox, and Mazda CX-5. The two GM products may have an edge, as diesels are well-respected among buyers of heavy-duty trucks and these brands are key truck brands. The diesel offering in the Terrain may be able to further tie GMC's strong truck image to the compact SUV. GMC Terrain chief engineer Mark Cieslak indicated that the company expects the Terrain will see diesel sales in the range of 7%, with the 1.5-litre engine expected to account for 50‒60% of all Terrain sales. The GMC Canyon pick-up truck has seen diesel account for about 14% of registrations over the first half of 2017, according to IHS Markit registration data; a lower penetration for the SUV would be consistent with the segment.

About this article

The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends.​​​​​​ Get a free trial.


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