Ever wonder why the Tahoe, Suburban, Silverado, Sierra, Yukon, Escalade, etc.... have been in production so long, and why the dealerships, whoever possible, keep so many of them in stock? (the Suburban, itself, goes back to 1936)

GM makes a boatload of cash (10-11K) on every one of them sold, partly because of high demand, partly because they meet so many of the country's driving-needs, and partly because customers are willing to pay a lot more for them (in factory-stickers and mark-ups) than they cost to produce. The dealership, of course, pockets the difference between the selling-price and invoice (wholesale)....but GM profits the difference between dealer-invoice and whatever it costs them to produce and ship them....and the shipping/destination-fee, of course, is part of the window-sticker. There is no reason to doubt a more or less similar profit margin at Ford, on the F-Series trucks/Expeditions and Lincoln Navigators, or at Stellantis on the full-sized Ram trucks.

The Arlington, TX plant, where these vehicles are built, is arguably the highest-margin vehicle-plant in the world.

(Hint: you may need to click the link itself to see the images..they are finicky about being posted)

https://gmauthority.com/blog/2023/06...ucks-and-suvs/

Here’s How Much Profit GM Makes On Full-Size Trucks And SUVs

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• BY TREY HAWKINS
• — JUN 16, 2023

Thanks to strong demand and high profit margins, it’s really no secret that full-size trucks and SUVs serve as cash cows for General Motors. With this in mind, here’s how much GM profits on average from each of these vehicles.

According to a new report from Reuters, The General has the potential to earn as much as $7.5 billion from sales of ICE-powered trucks and SUVs through 2035. This comes out to $10,678 per vehicle on average before accounting for interest and taxes.



These impressive profit margins serve as strong motivators for the Detroit-based automaker to continue investing in its ICE-powered future. To this end, General Motors recently announced a new $500 million investment into the GM Arlington plant in Texas to facilitate production of The General’s next generation of full-sized SUVs. This new investment will be used to introduce new tooling and equipment in the Arlington plant’s stamping, body shop and general assembly areas. Notably, the Arlington plant is considered as the most profitable plant in the world.

“Arlington produced 345,000 units in 2022, and by our estimate generated about $25 billion in revenue and $4 billion in EBIT – or about 30 percent of total company EBIT,” one analyst was quoted as saying.

For reference, EBIT stands for earnings before interest and taxes.






In another response to these high profits, General Motors is now expected to continue production of full-size trucks and SUVs up until the 2035 calendar year. This is noteworthy considering that GM has claimed it will feature a zero-emissions vehicle lineup by then. However, with the potential to earn $50 billion, or more, in profit during that time period, this development doesn’t come as much of a surprise.

For those who may not be aware, General Motors’ entire lineup of full-size trucks and SUVs includes the following:

• Chevy Silverado 1500
• Chevy Tahoe
• Chevy Suburban
• GMC Sierra 1500
• GMC Yukon
• Cadillac Escalade

 

Hi mmarshal,

According to your info they have strong demand.

Just a guess but I really don't know.

Could they be selling good because they are lower price and more abundantly availavle than their Euro competitors?

These mostly look like very stout 'Body on Frame' vehicles and that may be slim pickings for Euro and Jap offerings.

 

And that's the only thing they make money on. So as the EV wave advances, in part due to government mandates stopping ICE car sales, GM and Ford are both going bankrupt in 10 years. The government will come in and support them. Sub $30K EVs from Tesla and China are going to dramatically change the auto market. And let's face it, autos are overpriced, especially during this inflationary "supply chain shortage" wave, where prices have just gotten totally out of hand. How many people have a car payment > $1000 a month? It's totally out of control.

 

$625 million per year, that's it? Something seems off. How much of that will GM have to pay in gas guzzler tax?

 

Yes, there still is a lot of demand for them. Many people still think (with at least some, but not total, justification) that the more mass, weight, and sheet metal you have around you, the more protection you ultimately have in an accident. Mothers think the best way to protect their kids is to have two and a half to three tons of rolling steel. Many other buyers simply like the big full-frames and their noted ability to carry and tow heavy loads. And, of course, Escalade fans have always liked those features......plus its extra added bling.

I think they sell mostly for the reasons I just explained.

Not counting the Toyota Land Cruiser and Lexus LX500 (which are dedicated off-roaders and a little shorter overall), the Japanese did have at least two large full-size body-on-frame competitors to GM and Ford......the Nissan Armada and Infiniti QX80. There is also the Toyota Tundra and Nissan Titan full-size BOF pickup trucks.

 

GG tax is usually passed onto the buyer/consumer. It is included in the sticker-price.

 

I disagree that either GM or Ford will go bankrupt because of EVs. The Bolt/ Bolt EUV and the Mach-E-Mustang have both been sales-successes (with more EVs from both ford and GM to come). I personally don't think much of the Mach-E (the Bolt EUV is, IMO, a far better buy for much less money)....but the public, as a whole, is gravitating to both of them, just as they began gravitating to Teslas in significant numbers several years ago.

 

So if I buy a used Escalade, the person who bought it new already paid the Gas Guzzler tax?

SWEEEEET!
I like that deal!
Keys please!

 

In most cases, yes....the original buyer paid it when new. The Gas-Guzzler tax, printed on the original price-sticker, is a Federal tax, not state or local, so it is not charged again when the vehicle is re-sold or re-registered in the used-car market, which is handled and taxed by the State DMV.

I say in "most" cases, not necessarily all, because California is known for high taxation, has been pushing electric vehicles for years, discourages gas-guzzlers, and may (?) find a way to re-tax with the GG as a used car, even at the state-DMV level. I can't say for sure, since I am not totally familiar with their used-vehicle laws.

 

I think the 7.5bn is the total margin generated by sales of these vehicles, it would take roughly 700,000 truck/SUV sales driving roughly 10K in margin to drive it which sounds plausible.

 

15 MPG combined is atrocious we need to get as many polluting vehicles like that off the road as possible.

 

Yeah, but I only get 15 mpg around town in my RX330 anyway.

I'll take the Escalade and Roll the Coal, no worries. Lol

 

Your ES300 isn't much better.

 

Agreed but it is 23 years old.

 

Ok I'll go ahead and state the obvious. Lol

Big BOF SUV's are nice cuz can roll under them anytime with a creeper and have a look around just for fun and work on it too wothout a lift

Plus, they hold a lot of stuff.