General Motors will be significantly boosting production of its highly-profitable large SUVs and trucks due to rising demand. According to a report from Reuters, the automaker could build between 48,000 and 60,000 additional vehicles for the 2016 model year.
GM’s Arlington plant in Texas, where full-sized SUVs including the Cadillac Escalade and Chevrolet Suburban are built, added Saturday overtime shifts beginning on August 1, a GM spokesman confirmed. The automaker is also expected to boost output of pickup trucks built on the same platform, according to unnamed sources familiar with the company’s plans.
The sources said the maximum capacity per shift at the Arlington plant is 400 big SUVs, or about 1,200 in a full day’s production. By adding one day a week to production for a full year GM could build up to 60,000 vehicles a year, the sources added.
GM’s large SUVs and pickup trucks are said to generate profit well above the average for the company’s North American operations, which was a 10.5 percent in the second quarter. According to some analysts, models such as the Chevrolet Suburban and Tahoe and GMC Yukon return pretax profit in excess of $10,000 a vehicle.
The Cadillac Escalade (pictured) is the top seller among luxury large SUVs, accounting for 30 percent of its segment’s total sales in the United States. Analysts estimate that the vehicles built in Arlington alone generate about $3 billion or more in profit annually – that’s almost half of GM’s $6.5 billion operating profit last year.
Last year, GM built about 286,000 large SUVs at the Arlington plant, with production increasing 26 percent to nearly 154,000 vehicles in the first half of 2015.
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