According to persons that have knowledge of the plans, General Motors – the largest US automaker and the third biggest in the world – is lifting production of its high-margin big SUVs and trucks.
The company is going to produce up to 48,000 to 60,000 more vehicles for the 2016 model year in a bid to profit from the booming demand for the type of vehicles. GM’s Arlington, Texas, factory is the one producing full-sized sport utility vehicles such as the Cadillac Escalade and Chevrolet Suburban and has started using Saturday overtime shifts starting with the beginning of the month, according to a company spokesperson. Other sources that have knowledge of the company’s strategy also said GM will seek to increase the production of its pickup trucks, though it’s yet unclear which method would be employed.
The sources, which talked to Reuters on condition of anonymity because the plans have not been made public yet, said the Arlington facility can deliver 400 of the large SUVs per shift – 1,200 for a full production day. “Industry sales are running ahead of expectations,” comments GM spokesman James Cain. “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 does not break down profits on vehicles, but analysts and experts claim the large SUVs and profits deliver returns well in excess of the company’s average – which was 10.5 percent during the second quarter for the North American business.