As if a trip to your local gas station weren't enough proof of the changing times in the auto industry, today GM announced plans to cut back production of its pickups and full-size SUVs for the remainder of the year due to weakening consumer demand.
Through the first quarter of 2008, demand for pickups and full-size SUVs has dropped by 15 and 26 percent, respectively. With the national average price of regular gas reaching $3.60 today, a high previously predicted to come in June, car buyers are quickly moving toward smaller vehicles. GM says it is seeing strong sales of its crossovers such as the Buick Enclave, GMC Acadia, and Saturn Outlook, as well as its new Malibu sedan. The automaker is holding out the possibility of increasing production of its more frugal models down the line, but no changes are planned at the moment.
The automaker is planning to reduce production at four manufacturing plants -- in Pontiac and Flint, Michigan, Janesville, Wisconsin, and Oshawa, Ontario -- which will result in 88,000 fewer pickups and 50,000 fewer full-size SUVs being built this year. The reduction will begin at the American plants on July 14th, while Oshawa will eliminate a shift as of September 8th. No word on when the plants will return to full capacity, but GM North America president Troy Clarke said that given the rise in gas prices and a possible economic downturn, "a significant adjustment was needed to align our production with market realities." So don't expect to see as many Tahoes and Silverados on dealer lots, at least until the end of the year.
Source: GM