General Motors Corp.’s U.S. dealers are reporting that a decline in pickup-truck sales may be “bottoming out” and that some demand is returning for large sport-utility vehicles, Vice Chairman Bob Lutz said.
Bloomberg reported that dealers are seeing “some resurgence in demand for full-size SUVs and pickups,” Lutz told reporters today (Aug. 28) in Joliet, Ill., for a test drive of some of the Detroit-based automaker’s 2009 models. He didn’t provide figures.
A revival of consumer interest in the large trucks might help GM stem its 18% slide in U.S. sales this year through July. The biggest U.S. automaker is trying to rebuild sales this month with the return of prices usually available to only employees and cash discounts on most 2008 and some 2009 models.
“The auto industry is the smallest it’s been in years in terms of sales” and the U.S. economy is “lackluster,” Lutz said. “Nobody is quite sure when it’s going to turn around.”
Pickups, SUVs and vans account for 56% of GM’s U.S. sales this year. The consumer shift to cars as gasoline prices rose to more than $4 a gallon hurt GM, Ford Motor Co. and Chrysler LLC, which get a majority of their sales from the light trucks, more than Asia-based competitors such as Honda Motor Co. The U.S.-based automakers are shifting production capacity to cars and smaller SUVs.
Automakers may eventually be able to charge as much as $40,000 in the U.S. for small cars with many extra features, Lutz said, without giving a timeline.
“Part of it is going to be supply-and-demand dictated,” he told reporters.
Earnings from small cars will never reach the level of those from large SUVs or pickups, even as the decline in demand for the trucks is reducing their profitability, Lutz said. GM has almost eliminated losses on the sale of certain small cars, he said.