The Slow, Profitable Death of GM's Big SUVs

In a time when gasoline is $4 a gallon and hybrid cars are all the rage, it would be easy to conclude that the large SUV has gone the way of your grandfather’s Oldsmobile. But reports of the death of the gas guzzlers that grew popular in the late 1990s are greatly exaggerated. Instead, huge SUVs have slipped into a slow-but-profitable decline—and General Motors is thankful for their delayed interment.

While the automaker’s four large SUVs from Chevrolet and GMC—the Tahoe, Suburban, Yukon, and Yukon XL—made up less than 6.5 percent of GM’s U.S. vehicle sales last year, they account for 16.4 percent of its North American gross profit, according to an estimate by Bloomberg Industries. “They’re quite profitable,” says Chief Financial Officer Daniel Ammann, referring to the big SUVs, which logged more than $8 billion in sales in 2012. “This is a quarter-of-a-million-unit market here in the U.S.”