GM Next Generation Trucks - Delayed!
General Motors, along with Ford and Chrysler, and to a lesser extent Toyota and Nissan, are heavily vested in large trucks and SUVs, two automotive segments that have collapsed in the face of the most recent run up in fuel prices this year. The Detroit 3 get the lion’s share of their profits from these vehicles, but customers are turning away from them in droves.
As a result of the seismic shift in customer demand, General Motors is planning to delay building the next generation of their largest vehicles, choosing to divert resources to build smaller vehicles.
The move comes on the heels of May 2008 sales which saw pick up truck and SUV sales decline 24 and 51 percent respectively over May 2007. The drop, which is unprecedented, has GM and others scrambling to increase the production of fuel saving models and fast track other vehicles currently in the pipeline. Just this past week, GM announced that their Chevrolet Volt plug-in hybrid program is a “go” signaling that the test mules currently being used are meeting expectations.
Truck redesign is a costly endeavor as a variety of body styles and cab configurations must be developed. Cars, on the other hand, are easier to produce and some of the estimated $250-300 million saved by delaying a new model by one year can be used toward these other projects. In addition to ramping up its battery-powered car program, GM is developing smaller and lighter engines which can provide decent power and fuel savings while powering larger vehicles.
Though the large vehicle market is being hammered, GM has no plans to abandon it completely. Pick up trucks, in particular, are needed by service workers, who prize their passenger and cargo capacity as well as torque.
(Source: The Detroit News)
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4 Comments on GM Next Generation Trucks - Delayed!
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younge on
Thu, 3rd Jul 2008 10:24 pm
Carmax and other car dealers are selling suv at cost. Hybrid is in very high demand, however.
Industrywide sales declines led by trucks helped spur Ford’s forecast yesterday for a wider 2008 loss. The second- largest U.S. automaker said it will pare output by as much as 25 percent and delay unveiling the latest version of its top- selling vehicle, the F-Series pickup. Auto-loan unit Ford Motor Credit also will post a loss, Ford said.
June auto sales in the U.S. may drop to 12.5 million, their lowest annualized rate in 15 years
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