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.
Comments
Not too sure about this report. GM in particular is selling as much crossovers as they can build them. I think GM management is well aware of the huge crossover switch and will be introducing more models, they just recently announced the 2019 Blazer for example. Cadillac is the brand that needs more crossovers and need them fast.
The problem can be condensed into one word RELIABILITY ! The Honda CRV and Toyota Rav are simply the best at holding resale value by perceived reliability , balanced vehicles that are refined continually with interior dimensions that are constructed with N. American passengers and drivers in mind . These vehicles evolve over time without losing the basics . You have only to look at the Honda Civic and Accord cars that just evolve , no major changes , same with the Toyota Corolla and Camry cars . GM and Ford change engines , dimensions , features , whoop dee doo out comes the new , the latest and greatest and what suffers the growing pains….the reliability and sometimes the reason people bought the previous model in the first place . So the next purchase is where the Honda and Toyota become dominant forces to be reckoned with .
I agree Jim. I just had a colleague cross shop Equinox, Escape, CRV and Rav4 and he reported the Asian vehicles come with better warranties and drive better too – with better sound deadening (quiet ride) and better driving dynamics. Add in the reliability factor and resale value which the Asians have had now for decades and it’s no wonder they have an ever increasing market share. He bought the Rav4 for his wife…and she’s happy with it!
Yep, and both Toyota and Honda simply fix the problems when they arise. GM however make excuses, places blame. Who is responsible, Dealer or GM, no one knows. One says this one says that. Look at the GM ads, trying to convince you reliability in 3 years. Last I knew Camry was the highest mileage oldest car on the road. Why would anyone switch from that to GM for 3 years of reliability. And then when GM has a problem like a Cadillac CUE, they only fix for some SPECIAL customers.
Your evolve angle is flawed. If the new Camry and Civic are modest evolutions, then I’ve been inhaling too much exhaust gases.
This is why Ford dumped cars. They need the production space.
As for GM they will do fine. We are coming into a time where they have or are ramping up more CUV models with more to come. Now if they were standing pat on what they have then it would be an issue.
The only real challenge is competing with the cheaper Hyundai models. They sell for less than everyone. They are not built to as sold standards but they are good enough to compete on price.
The real question is just how long will GM hold on to the car lines. If they keep declining where is the cut off point where they will make a move to kill them?
The way I see it the CUV segment is just going to get more and more competitive. GM is in a good spot to compete compared to the cars. The key is keep them fresh, price them right, keep them competitive and keep them in stock.
Oh one more keep them profitable. Market share means little anymore if you make little to no money per unit. Keep cost down and profits up and even with less market share you may still remain in a strong position.
Scott–Chevrolet stands to gain Malibu and Cruze sales as Ford exits from the “buy American” crowd which could be a healthy chunk of customers.
The fact that GM and Ford aren’t leading in SUV sales speaks to the still damaged repretation of domestic brands.
Chevrolet making a full come back is a 20 year process that will require the Bowtie to stay towards the top of quality rankings as recently happened with JD Power.
I’m convinced that for many buyers Honda and Toyota set the benchmark the quality and residuals. Buying patterns often have more to do with habit than anything else.
GM makes a good product. Unfortunately years of bad press have hurt these cars at home moot to mention other markets. The Opel turn around proves that the product is desirable even without heavy marketing.
They might or Hyundai, Honda and Toyota could take them.
Even more how many will finely make the move to the CUV segment.
The Cruze and Malibu are far from guaranteed to gain the sales from Ford.
The fact GM and Ford are not leading is an example of how competitive the segment is.
Question is, what is meant by “American” in “buy American”
I’m guessing that’s why they ar bringing the new Blazer even though customers would cross shop it with the Equinox and Traverse. Looks like they are giving a bigger variety hopefully that will draw people from other brands. On the side note though the Equinox does need a refresh to the exterior if they do that then they got a winner.. that to me is the only thing holding it back even when I see them in person, they’re still not very attractive. They hit a home run in 2010, but they need to find something new with this one..
This was a crap article when it was on Jalopnik yesterday and its crap article when you’ve recycled it today………when your basically stealing content from a sh*t site for your site, what does that make you.
Try harder, I know that the goal here is usually to find whatever TTAC crap and regurgitate so they can cast a negative light on GM for the peanut gallery, but this is really crap.
Reliability is King. J.D. Powers is nothing compared to Consumer Reports.
John, although you are correct about the influence of Consumer Reports (and I’m a long time subscriber), their methodology for assessing reliability is quite flawed.
Remember, these issues are self reported by owners and that is open to incredible bias. Unless there is some way to objectively determine how often various items on cars fail or need repair, I’d view the data from CU as interesting but not necessarily all that accurate. Perhaps those vehicles on the extremes of the survey (very reliable or very unreliable) are worth noting, but the majority in the bulk of the bell curve are likely not.
… aww… we get so upset when the truth is rubbed in our faces, don’t we?
Put a 10 year bumper to bumper on the ‘Nox.
Watch what happens to sales.
J D Power is now owned by the Chinese…
2019 Blazer when???????
It would be helpful if the author gave where he got his numbers from because GM Authority just had a story about the Chevy Traverse Sales Increase 30 Percent To 35,892 Units In Second Quarter 2018, Chevy Equinox has sold over 156K units total for Jan-Jun of this year, Chevy Trax sales for calendar year 2018 is already at 46,990 (JAN-JUN) while total in 2017 was only 79,289 as the facts say Chevrolet CUV sales is doing very well.
But…the Traverse and Equinox are new models and should sell their best now! Even with their lofty increases over last year, believe both are 4th in their segments for sales!
Gm’s crossovers are doing just fine, lots more coming. Competitive segment that’s all. And the people who write this, stuff witch is not true needed to stay off these drugs and alcohol.
Toyota and honda fix’s all there problems on there car’s, not all these time. Are you going by JD power or CR.? Reliability? Maybe, so are gm’s car’s as well.
This is what I get a kick out of. All the people who say, sure they do. Toyota, Honda, Audi, and the others, they have just as much or more troubles. They don’t have any better customer service than GM. There cars arnt any better. Yet here we are GM cant figure out WHY people still buy the others. Again ill let you in on a secret. The others take better care of there loyal customers. When you have a $50,000.00 ATS with a factory defective CUE screen the others fix them. PERIOD. You tell me WHY people continue to buy the others if they are such junk.
Nice to see you still grinding that axe.
Yep, just another thing GM doesn’t understand. Grind that axe you bet, and it takes along time for most people to forget how they got SCREWED by a auto manufacturer. Do you remember when Toyota Camry ran out of control. O my this will ruin Toyota some said. However LOOK Toyota fixed ALL for ALL and more. Look at Camry, still selling, still selling to the same people. Are they still grinding that axe, NOPE Toyota fixed it, no axe to grind. Do you think in the life of Toyota that it was a good investment fixing ALL and more, let me help you YES. Now GM has to try to convince me to buy a new improved Cadillac after they would not fix our last new improved Cadillac. Well we will try an Audi A4, when we get screwed by them ill let you know. By then if there is still a Cadillac in the US we mite have to try our number 6 Cadillac.
I agree the import Brands have superior dependability – but I also think GM should consider leaving V6s in more CUV’s – instead of these turbo V4s .
Who wouldn’t pick a 305hp V6 over the future maintenance issues with the turbos …..?
Explain that to all the luxury SUV/Cuv buyers who buy them with Turbo 4’s. They include Mercedes, acura, BMW, Volvo, Jaquar and even Porsche. so that is not true at all. Most people have no idea how many cylinders they have. Just like most don’t know how to change a spare tire.
GM has a perception problem and the new stylish Blazer may help. My friends new Ridgeline interior is no better or worse than my 2016 Cruze. Just people perceive it is. He even works for a company that makes parts for all the manufactures of cars for interior plastics and he says all mainstream companies are the same. Its just a perception.
I will give this a shot Joe. I agree with the 2.0T, they all have them. But there are HUGE differences. More stroke, more bore, different tune, different transmission. Our 2.0T in our ATS AWD feels like junk after driving an Audi A4 2.0T AWD. THIS IS NOT PERCEPTION. You go drive them both, let me know. The Audi is so smooth. Also you are correct on most people have no idea on how many cylinders they have. Like my wife, she doesn’t know or care. But when she drove the Audi she knew and cared. She said in the first 2 miles this is nice, how much more is this than my car (the ATS). When I told her it was less money she simply could not believe it. And when she goes to the garage and can not see the CUE screen do to the faulty delamination, she sees the difference. When she asks why there is oil on the garage floor from the rear of her car, she notices. Sure we have been told the NEW GM 2.0T with 9 speed will be better, smoother, better and smoother than what, the ATS or the Audi, because there is a huge difference. Sure I get the some plastic is plastic stuff. But this is not all a perception problem.
I don’t get it with the 2.0 gm has. I drove a new GMC Terrain and Malibu and its smooth as can be. Maybe when its set for rear wheel drive its just not the same.
…and Trump will spit out some furious tweets how unfair free market and competition are.