Date
27 July 2017
Sales of General Motors' full-sized sport utility vehicles like the Cadillac Escalade are running ahead of expectations. Photo: Bloomberg
Sales of General Motors' full-sized sport utility vehicles like the Cadillac Escalade are running ahead of expectations. Photo: Bloomberg

GM boosting production of big SUVs and trucks

General Motors is boosting production of its highly profitable large SUVs and trucks amid rising demand.

The move could result in 48,000 to 60,000 additional vehicles for the 2016 model year, Reuters reported.

The company’s plant in Arlington, Texas, which makes full-sized sport utility vehicles including the Cadillac Escalade and Chevrolet Suburban, has added Saturday overtime shifts since Aug. 1, a GM spokesman said.

GM is also expected to boost output of pickup trucks, sources told the news agency.

The Arlington plant is capable of making 400 big SUVs per shift, or about 1,200 in a full day’s production, barring any planned or unplanned maintenance, the sources said.

Adding one day a week to production for a full year could result in as many as 60,000 additional vehicles a year, although production is likely to be less because of maintenance downtime or parts shortages.

GM does not disclose profit margins on individual vehicles, but analysts and company executives say the large SUVs and pickups generate profit well above the average for GM’s North American operations, which was a robust 10.5 percent in the second quarter, the report said.

“Industry sales are running ahead of expectations,” GM spokesman James Cain said. “Sales of our full-size SUVs are very strong and we have been working to find creative ways to increase production to meet demand and rebuild our inventories.”

GM dominates the lucrative large SUV market, which has enjoyed a resurgence as gasoline prices have fallen below US$3 a gallon in most of the United States.

GM models such as the Chevrolet Suburban and Tahoe and GMC Yukon reap pretax profit in excess of US$10,000 a vehicle, according to analysts.

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