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GM says new SUVs won't help sales
Industry trade publication says that company sees flat sales given record gasoline prices.
September 21, 2005: 10:14 AM EDT
Industry watchers say the new Chevy Tahoe won't boost flagging sales.
Industry watchers say the new Chevy Tahoe won't boost flagging sales.

DETROIT (CNN/Money) - General Motors rolled out its next generation of sport utility vehicles, saying that they will debut with "significant gains in fuel efficiency, safety, sophistication and design," but a report quotes a GM executive saying that even with the new vehicle's fuel efficiency the segment's sales will be flat.

GM, which unveiled Tuesday its 2007 Chevrolet Suburban and Tahoe as well as the GMC Yukon and Cadillac Escalade, is projecting sales to maintain current levels, according to report by the trade publication Automotive News.

"It is realistic to assume the segment won't grow," said Robert Lutz, GM's vice chairman of global development, was quoted by the trade publication as saying.

GM (down $0.23 to $30.85, Research) did not return CNN/Money's calls seeking comment.

GM says it currently sells 60 to 62 percent of the 750,000 large SUVs sold in America annually and leads in certain sales categories, including the large-luxury market, the report said.

Lutz blamed record gasoline prices for the lack of growth in the SUV market, and said that GM's market share and the segment volume should hold steady, according to Automotive News.

"People are still going to buy full-sized sport-utilities at $3 a gallon. But even at $3 a gallon, it's 750,000 people a year. It's not going to go to a million," Lutz was quoted as saying. "Two years ago we would have told you the segment is going to go to a million vehicles. It's not going to do that. It's leveled off.

"We think 750,000 (units) is the best prediction based on today's fuel prices. I think we may maintain our volume at other people's expense, even if the segment shrinks a little bit," Lutz said according to the report.

In March, GM noted that sales of generally more fuel-efficient cars were showing strength due to rising gasoline prices and to the detriment of SUV sales.

That announcement came long before gasoline prices made their most recent record-breaking run in August and September.

GM says its new SUVs will offer a number of advantages, including, increased horsepower and better fuel economy and better handling.

The new Tahoe, Yukon and Escalade will be available in the first quarter next year, according to a statement from GM. The Suburban and Avalanche, Yukon XL Denali, Escalade ESV and EXT will be available in the second quarter.


For a look at the redesigned 2007 Chevrolet Tahoe click here.

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