General Motors has been slow getting to the hybrid market, saying instead that fuel cells are the way. GM has spent billions in research and development and has the most patents for fuel cell advancement of any automobile manufacturer. But General Motors needs money to continue their quest to the holy grail, fuel cells. Large SUVs are very, very good for General Motors.
According to Global Vice Chairman, Bob Lutz, “We own 62 percent of that segment. It is highly profitable for us. A couple of years ago we thought it would continue to grow, but realistically we know that is no longer going to happen. It is still large, especially because it is one in which we dominate.” Lutz expects to sell about 375,000 large SUVs of the 750,000 projected annual sales for next year.
Lutz boasts of sportier exterior designs, interiors, more powerful engines, major fuel savings and best in segment fuel economy. According to Nick Richards, GM Powertrain Communications, the Chevy Tahoe will get a combined mpg of 20.5. The old Tahoe got a combined mpg of 17. Will this make the difference in sales?
Large SUV sales have been dropping for the past two years, according to Paul Taylor, senior analyst of National Automobile Dealer Association (NADA). Both the Tahoe and the Cadillac Escalade sales have fallen off in 2005 as well. Taylor thinks it is time for General Motors to bring their newly designed SUVs out, Cylinder deactivation at cruise in gasoline engines is contributing to higher highway mileages in many vehicles.” The new large SUVs have Displacement on Demand (DOD), whereby the engine shuts down half the cylinders at optimum times, and a new 6-speed transmission that gives the new SUVs the 1-2 mpg jump.
According to Lutz, GM has four crossover vehicles (CUVs) and they make up fourteen percent of the marketshare of that segment. Expect fourteen crossovers total in the next couple of years.
General Motors brought out their Parallel Hybrid Truck system last year that was on 1,500 pickups, out of over 600,000 unit’s produces. They are supposed to bring out a two-mode hybrid system in 2007 in the Chevy Tahoe or GMC Yukon. They will not say how many they will be bringing out; whether it is another boutique niche or a substantial amount of hybrids. Part of the reason is that they wont start building the two-mode hybrids (which would give another 25 percent fuel efficiency) till 4th quarter of 2007, which is two years away.
Large SUV segment 2005 mpg
The Chevy Tahoe, GMC Yukon and Cadillac Escalade will be available for sale in the first quarter of 2006
Chevy Suburban and Avalanche, GMC Yukon and Yukon XL Denali, Cadillac Escalade ESV and Escalade EXT are available in the second quarter of 2006
They will be assembled in Arlington, Texas; Janesville, Wisconsin; Silao, Mexico.
Engine offerings for the new SUVs include: