US: Detroit three need their trucks to keep up the profit increase image

The three Detroit automakers – GM, Ford and FCA US – have managed to return to their roots from before the 2009 financial crisis, with profit dependent on the sport utes and pickup trucks.

There’s an interesting analysis to be made here about the profit formula, which was supposedly being abandoned after the last great financial crisis, which almost ran to the ground General Motors and Chrysler and remained a close call for Ford as well. The past few financial quarters have shown the Detroit three to be once more heavily reliant on their large, less fuel-efficient models. But, according to industry specialists and financial analysts, while the formula looks similar, the associated faults and risks are not the same. Those gas guzzling models have been generating tremendous earnings margins and customers with new found wealth are increasingly buying the more expensive, better-specked variants.

Adamant to Ford’s North American financial health remains the F-150 model, now introduced as a new generation that makes heavy use of aluminum for the body to lower the weight an improve mileage. GM also reported first quarter earnings that broke all previous records – taking home $2.2 billion before interest and taxes in North America. It also managed to fend off any losses outside of its home region. Fiat Chrysler Automobiles NV’s US unit, formerly known as the Chrysler Group LLC, is also expected to report home base earnings that rely on the Jeep sport utility and Ram pickup truck brands. But the woes are present: a stronger dollar has allowed Asian and European competitors to lower the prices of US products and even as cost cutting programs have taken effect, manufacturing expenses are still on the rise.

Via Reuters