GM Shifts from Trucks and SUVs to Cars and Crossovers

Image Gallery The 2009 Chevrolet Aveo is rated at 25 mpg in city driving, 34 mpg in highway driving. GENERAL MOTORS

General Motors (GM) announced on June 3 its plans to cease production at four GM truck assembly plants in North America, while adding additional shifts at two assembly plants for cars. According to Rick Wagoner, GM's chairman and chief executive officer, consumer preferences are shifting permanently away from trucks and sport utility vehicles (SUVs) in favor of smaller cars and crossover vehicles.

As a result, GM saw significant increases in the retail sales of its Chevrolet Malibu, Chevrolet Aveo and Pontiac Vibe in May, while its May sales of trucks to its dealerships are down by 36.7 percent from last year. Regarding cars and crossovers, "Our challenge in May was having enough vehicles available to sell," Wagoner said. But he also noted that "higher gasoline prices are changing consumer behavior, and rapidly ... significantly affecting the U.S. auto industry sales mix. We at GM don't think this is a spike or temporary shift; we believe that it is, by and large, permanent." See the GM sales figures for May and the speech Wagoner gave on June 3.

GM is also taking a number of longer-term, strategic actions to address high gasoline prices and the shift in consumer preferences, including the formal approval of the GM board of directors for the production of the Chevrolet Volt, a plug-in hybrid electric vehicle. GM intends to unveil a production version of the Volt "in the very near future," with a goal of delivering the vehicle to Chevrolet showrooms by the end of 2010.