Some might accuse General Motors Corp.’s management of having a tin ear, boosting output of big gas-guzzlers as consumers clamor for smaller, more fuel-efficient cars.
But, according to CBS MarketWatch, many of those keeping an ear to the ground in Detroit see GM’s announcement last week as a signal that the company is sharpening its focus on what it does best – building trucks and SUVs to take on the best foreign competitors have to offer.
Despite moans from the “go-green” camp, building up its SUV stock is probably the right thing to do from a business standpoint, said David Healy of Burnham Securities.
“GM isn’t stuffing these models down their dealers’ throats just to try to manufacturer more profits,” he added. “They’re responding to what they see in the marketplace.”
And what GM executives saw last month was a big appetite for its freshly scrubbed lineup. Even though the climate was less than ideal, expectations were running high for the new crop, and the February sales results along with the recent increase in production is the first concrete evidence that GM’s move has hit the mark.
“It’s still early, but we’re exceeding all of the important targets for our new full-size SUVs, particularly the Tahoe, which is the first one to arrive in dealerships,” said Mark LaNeve, head of GM’s North America sales, early this month.
With $3-a-gallon gas prices a fresh memory, hybrids, crossover utilities and subcompacts are still all the rage. But it’s not just about fuel economy when it comes to customer demand.
While some Americans might downsize, there are still plenty that won’t be giving up the powerful beasts just yet, according to J.D. Power Automotive Forecasting analyst Matt Vicenzi.
“As much as people claim to be fuel-conscious, we haven’t seen a huge shift all the way down to the smaller vehicles yet; indicative of that would be the early success of GM’s new SUVs,” he said.