GM to halt overhaul on SUVs and pickups

GM says it needs time to see where the truck market is headed.

DETROIT (AP) — General Motors Corp. is indefinitely halting a major overhaul of its full-size pickup trucks and sport utility vehicles as it deals with a drastic drop in sales of those products.

GM spokesman Tom Wilkinson said Thursday the automaker instead will work on more modest updates and enhancements as it shifts resources toward higher-mileage vehicles. The move has been largely spurred by skyrocketing gas prices that have radically changed customers’ buying habits, he said.

“We’re delaying it — at least until we have a better sense of where the market is going,” he said. “There’s now so much uncertainty of where the full-size truck market is going, primarily because of the increase in fuel prices.”

U.S. pickup sales in May fell more than 38 percent, and the company has said the market declined more rapidly than expected last month. Detroit-based GM announced this month it was closing Oshawa, Ontario, and three other pickup truck and sport utility vehicle factories as $4 per gallon gas has caused sales to tumble.

Wilkinson declined to talk about financial ramifications of the plan, but said it’s no secret that pickups and SUVs have been a major center for GM and its rivals and the sales dive in the segment has been acutely felt.

“This allows us to shift resources to other programs that we think can generate more business for GM,” he said. “One of the challenges is we need to be able to get a good return for our cars.”

He said the strategy has started to pay off with strong sales of cars such as the Saturn Aura and Chevrolet Malibu.

On the truck and SUV front, Wilkinson said GM believes the segment will continue to be competitive even without a major redesign. The company plans updates that include hybrid versions of its truck lineup this fall, and is looking at new powertrain options, such as diesel.

“Nobody should interpret this as us backing away from a commitment to the full-size truck market,” he said. “We’re not backing away from an aggressive role, but it will be a smaller market. We’ll put the appropriate resources toward it.”

Wilkinson said record-high gas prices aren’t the only issue. Automakers also are dealing with a new federal corporate average fuel economy (CAFE) law requiring them to raise gas mileage of their vehicles.