GM’s large-SUV sales boom could also be owed to frackers image

General Motors has reported a 38% gain in its large-SUV sales this August compared to last year and the frackers from North Dakota and Texas are the ones the US automaker should thank. Buyers attracted by the Chevrolet Tahoe and Suburban and GMC Yukon SUVs have also been reassured by the dormant gasoline prices.

While geopolitical developments might have led to an increase in the U.S. gasoline prices up to levels of $5-a-gallon, this has not happened in 2014. The new U.S. oil and gas supplies enabled by horizontal drilling and hydraulic fracturing gave America new stores of hydrocarbons and helped the peace of mind of large-SUV buyers. The gasoline prices in the U.S. stayed at $3.50 a gallon for at least the last 18 months, showing the global impact America’s new self-sufficient status has.

GM Product planners led by chiefs such as Mary Barra and Mark Reuss pushed through big overhauls of the carmaker’s SUVs when the general assumption was that this car segment would be dead with the onset of $4-a-gallon gasoline price and the increase of much smaller, higher-mileage vehicles.

However GM ended up with worthy new versions of the cars. Duncan Aldred, GMC vice president for Buick and GMC said the main reason buyers are purchasing the new Yukon is that “this is a vehicle that a lot of people have waited a long time”. GMC is seen increasingly as “a premium brand, and Yukon is seen as the flagship of the brand.”

By Gabriela Florea