General Motors, Ford and Chrysler have always relied on big cars to push profits. Decades ago, big passenger cars were the hot ticket, supplemented by pickup trucks and SUVs. These days, pickup trucks and SUVs keep the lights on. But, strangely enough, Detroit’s Big Three are slipping in the crossover race.
A new Bloomberg report published Tuesday details how GM, Ford and Fiat-Chrysler Automobiles is losing ground to non-domestic automakers. The slide leaves each automaker more reliant on their full-size trucks and body-on-frame SUVs—just like last decade.
“The U.S. has been the epicenter for the crossover market for 20 years, and the fact that our domestic automakers aren’t any better at it than the foreign brands is damning,” Eric Noble, founder of the CarLab, said.
Analysts predict by 2023, GM, Ford and FCA will produce just 35 percent of North America’s crossovers. In 2005, the figure was 61 percent. Meanwhile, automakers such as Honda are ramping up crossover production to flood U.S. dealerships with popular models like the CR-V. Honda will soon produce over half a million CR-Vs in North American factories—most of them settled in the U.S., at that.
Even as the new Chevrolet Equinox moves in significant numbers, GM and other U.S. automakers have put their eggs in the pickup-truck basket. North American pickup production will remain at 86 percent by 2023, according to the report.
And analysts believe the same strategy that nearly doomed two of Detroit’s Big Three is risky again. Oil prices have risen 65 percent since June 2017 and experts believe we could see sky-high gasoline prices return as soon as 2020.
“Detroit isn’t any less dependent on pickups now than it was in 2007,” Noble said. “Pickups are great when America is booming, but they’re horrible in a downturn.”
GM’s slippage comes as it mulls what to do with underused car plants in the U.S. The automaker’s several car plants each run under capacity and GM hasn’t yet indicated it will retool U.S. plants to build crossovers and SUVs. Instead, we could see at least one car plant shut its doors, and the Lordstown, Ohio, assembly appears as a frontrunner.