General Motors Corp. said Thursday it will indefinitely halt a major overhaul of its full-size pickup trucks and sport utility vehicles as it grapples with plummeting sales of those products.
GM spokesman Tom Wilkinson said the automaker instead will work on more modest updates and enhancements as it shifts more 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.
Ford President of the Americas Mark Fields said his company continually monitors the marketplace and could adjust its product development plans as well.
The company is rolling out a new F-150 pickup truck in the fall, so it has plenty of time to evaluate work on the next generation pickup, Fields said.
“As we see changes in the marketplace, we’ll plan our production plans accordingly,” he said Thursday in an interview with The Associated Press.
GM’s 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 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 includes 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.”