Thanks to strong demand and high profit margins, it’s really no secret that full-size trucks and SUVs serve as cash cows for General Motors. With this in mind, here’s how much GM profits on average from each of these vehicles.
According to a new report from Reuters, The General has the potential to earn as much as $7.5 billion from sales of ICE-powered trucks and SUVs through 2035. This comes out to $10,678 per vehicle on average before accounting for interest and taxes.
These impressive profit margins serve as strong motivators for the Detroit-based automaker to continue investing in its ICE-powered future. To this end, General Motors recently announced a new $500 million investment into the GM Arlington plant in Texas to facilitate production of The General’s next generation of full-sized SUVs. This new investment will be used to introduce new tooling and equipment in the Arlington plant’s stamping, body shop and general assembly areas. Notably, the Arlington plant is considered as the most profitable plant in the world.
“Arlington produced 345,000 units in 2022, and by our estimate generated about $25 billion in revenue and $4 billion in EBIT – or about 30 percent of total company EBIT,” one analyst was quoted as saying.
For reference, EBIT stands for earnings before interest and taxes.
In another response to these high profits, General Motors is now expected to continue production of full-size trucks and SUVs up until the 2035 calendar year. This is noteworthy considering that GM has claimed it will feature a zero-emissions vehicle lineup by then. However, with the potential to earn $50 billion, or more, in profit during that time period, this development doesn’t come as much of a surprise.
For those who may not be aware, General Motors’ entire lineup of full-size trucks and SUVs includes the following:
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Comments
Well in 2018 prior to huge price increases (which are not at all results entirely inflationary and material cost escalation related), new higher luxury trims introduced, and incentives drying up GM was averaging $17,000 per unit, so I’d suspect Reuters to be underestimating by about half. Only variable is if in 2018 the cash incentives weren’t factored in making the margins skew high side. But either way $20k on average is more realistic for today.
2018 also may not have taken into account the R&D for the 2014-2018 K2 platform trucks and SUVs as this would have already recovered in previous years, but with that said so to is the T1 platform at this point.
GM is the most profitable per unit on trucks and SUVs. Even with Ram offering $12,000 incentives on Ram Classic models they are still making money in that DS platform. That’s a real tell tale of how much money then manufacturers can make.
Further to that is GM Financial churning billions on the silly 8 year loans.
So what is the leftover profit for the dealers outside of market adjustment markups?
hi i work at a GMC dealer. we average like 5-8k per deal without market adjustments
You must be the best proforming dealer in the nation. 2600 bucks on a 50k car. Zero on a bolt
Average dealer margin is 2-4% before finance product sales. Big SUV’s and trucks can be a bit more if not discounted, which many dealers are starting to do.
If GM had direct sales to customers, the profit margin would have been much higher and also no time wasted for customers dealing with shady salesmen.
I was going to upgrade from my current car but shady dealers cost GM a sale in my case. I got so frustrated by multiple dealers adding “paint protection packages”, GPS services (not OnStar), etc. that I just stopped looking and decided to keep my car. I mean, when I ask “do you sell at MSRP”, they say “yes”, and then there’s $4,000 of low-value add-ons…
Yup, told the salesman in my 2019 purchase, I will not pay for that add on crap, paint and fabric protection. I will order next time and specify none of this.
There would also be higher costs for building/supporting factory stores.
So the manufacturer makes 10k and dealers make 2 and dealers are the problem….got it.
I agree with the dealer add-ons. I have been looking for a 23 Colorado. I found several dealers advertising $1K or $2K below MSRP but then add back $1K to $3K with their dealer add-ons like Nitrogen in the tires, window tinting, VIP packaging, etc. So much for selling below MSRP. All they want to do is focus on the monthly payment. I care about the total price. I am beyond frustrated at this point.
Getting buyers to focus on monthly payments, and as such convincing/persuading them what is a ‘affordable’ should be illegal. Same with those credit card ‘salespeople’ that grift people into signing up for a credit card because it come with a free cooler, or shirt, or gun.
I sold cars for 19 years, I asked a monthly payment question because of what the consumer is able to comfortably afford. You would be surprised the number of people who want a new SUV for $350 a month with nothing down because they have ZERO idea of what money actually costs.
Happens everyday and more on the weekends. Takes a skilled sales person to weed through that and not offend the real buyer.
The Colorado is a horrible truck and rotten mpg. Beware
Yeah, it’s funny that paying cash used to mean something, now they prefer that you finance because they make money on that too!
Hey Jeff. I have 2023 Colorados in stock and we don’t do add ons or markups. We also accept GM manufacturer discounts on all our vehicles where applicable. If you want to discuss further, feel free to send me an email: coleg(at)genesischevy.com
Where are you?
Located in Detroit, MI, but can and have shipped anywhere in the continental US.
depending on what state you live in they kill you with that crap more in more give the chevy dealer in Atlantic city a call they will do anything make you happy
The article says GM makes an average of $10,678 on each vehicle. That would not include what the dealer makes.
You meant that GM makes $10,678 plus what the dealership pays for advertising fees, interest on inventory that is floorplanned, costs to be a franchise etc.
I am a GM retiree. I ordered my truck using a GM pin number that I retained. I had to wait 3 months for the truck to arrive but I could afford to wait until it got built and shipped to me. I had absolutely no trouble or issues with the dealer because my total price came from GM. There were a $350.00 dealer fee for its services to prep auto for delivery to me, but my sales person did a few extras for no fee.- I also have the GM credit card through Goldman Sach ” Marcus” The $2,700.00 points went toward my down payment with nothing else out of my pockets. – Great Experience!!
I think you got taken for $350 as the dealer is paid for the pre delivery inspection (PDI) by GM to prep, inspect, install any parts shipped with the vehicle and clean your vehicle. Just maybe that money was for tag and registration fees.
Tomg
Most dealers have an “Admin fee” of some sort… $350 is super reasonable. $699-$999 in dealers fees is the standard in my market.
I think that with all the profits being made more safety related items should be standard equipment / options. Tomg
I think GM SUCKS! never buying another one!
I have a 2014 terrain that will be sitting in my driveway until I pay loan off because it now has a blown motor and my mechanic said this is his 4th one to come to his shop for same exact thing!
GM needs to take responsibility for this, I’m on ssd and cannot afford another car or a new motor!
That’s a 9 year old vehicle, how many miles.
Must be the 4cyl?
I worked at the largest dealer in the northwest and all of the managers make over 500k. I will never buy a new truck again.
Which was probably like three and I doubt all of them made that. Maybe the General Manager. But if it’s a big store, it’s simple math. Average dealer margin on a new vehicle is generally 2-4%. If it’s a very big dealer selling 5k vehicles per year with an average transaction price of $40k, that’s $4-8 million in gross profit, and GM’s are usually paid as a percentage of that. It’s a big business and a headache to manage, but the bosses are paid accordingly.
doubt it bro… the GM maybe… sales managers don’t pull that kind of coin.
Sorry to hear thay V Fater . GM doesn’t stand behind their products. I am also on SS and understand your frustration. The last new GM car I purchased was a 72 Vega GT. I drove into the dealer and towed it out. They told me my warantee motor was worn out. You can only get 1 time.
And not a single dime comes from me. All I can say.
Look I think this article is no where near any clear accuracy. For example, in 2016 I bought a GMC Yukon XL for 48k. Today a Chevy Suburban will cost 60k before tax. 2023 Gmc Yukon XL will cost you 68k before tax. Look a 2023 Cadillac Escalade long wheelbase platinum edition cost 110k. GM MAKING MORE THAN 10K PROFIT😂. ON ESCALADES THEY MAKE 55K. Yukons they make 24 k. Suburbans 20k. A Yukon and Escalade is 92% the same SUV..🤣🤣🤣🤣. Don’t believe the bull$hit. They make billions a year….only business owners lease ESCALADES…it’s the perfect write off. Know the facts100
Perhaps you should look up standard safety equipment on GM’s current SUV lineup. Lane assist, forward collision alert, pedestrian alert, automatic emergency braking, and auto high-beams are standard on Trax, Trailblazer, Equinox, Blazer, and Traverse. Likewise with the big SUV’s and most of the Silverado lineup. People talk about higher vehicle ATP’s, but they also don’t realize how much more equipment is standard on today’s vehicles, even compared to just a few years ago.
So Cole from Genesis Chevrolet. How much is your 2023 chevy 1500 classic out the door. Or does your charge more like the rest.
Chevrolet doesn’t have a “classic” 1500, you’re thinking of RAM. Our Silverado WT and Custom may be what you’re looking for if you want a base truck with the previous gen interior. Assuming you want a crew cab, they start at $47,195 and $51,195, respectively. My store charges MSRP or less with no add ons, and we accept GM manufacturer discounts where applicable. You can send me an email if you’re interested in discussing further: coleg(at)genesischevy.com
I also said out the door. Not Msrp. The problem is there are 95 percent of the checy/gmc dealers that are crooks and 5 percent that are good ones that care and run a good business. If you are one of the 5 percent then you will be open and honest and tell us out the door price and how it breaks down and what is it for. Or are you 95 percent
I told you my store charges MSRP or less. For OTD price, you’d need to know applicable state, city, and local taxes, plus state registration/titling costs and any other applicable government fees. In Michigan where I’m at, it’s 6% tax and plate fees vary by MSRP, so you’d need a specific vehicle. You can look it up for your locality if you’d like, I don’t know where that is.
It must be a Gmc I looked at it yesterday it says classic on it cole
You know what GMC stands for Got Mechanic Coming 2020 Sierra 32k has been in and out of shop since we purchase transmission problems they want to trade up for new one are ya’ll for real. Was f150 guy thought I was moving up to professional grade glad I still have my 2009 f150 132k no problems
Don’t forget 12-15 k for those trucks and suv’s goes directly to their overdrawn pension fund which I am sure is aside from the reported profit. That’s alot to pay just because dad and grandpa drove them
Investing taught me to scrutinize corporate behavior, paying closer attention to longterm performance and ethical practices than when i was in my 20’s. The auto company bailouts pushed me to drive brands other than gm and the results have been very favorable. Money can cause blindness.
I’ve bought my last GMC truck. You pay a fortune for the truck and then they want $99.00 a year to update your GPS along with now charging for onstar features that were included for years.
This is just a bit ridiculous to me.
I wanna shout out to @MikeRR.
I’ve been in car sales for 5 years over at CJDR. That 17 figure sounds about right. Grand Cherokee Laredo was at 13k-14k build figure for years before ’20 & co. Massive profit margins when the avg sale price 35k on the base.
Meanwhile, Florida just banned all direct-from-manufacturer vehicle sales. Gotta help out those shady dealerships.
There’s nothing wrong with making money. But making stupid, ridiculous money like what they charge for a new truck and then it takes a 15k hit as soon as you drive it off the lot. I feel absolutely no shame in saying and one day it’s going to happen and that is G.M. and Ford along with Dodge are gonna price themselves right out of business…
Exactly right on the nose. Im a certified gearhead and own a CTS-V. And I hate to say it but Tesla is about to take over. Now that they have ability to mass mass produce cheaper battery technology, in the very near future they are going to be able to make their cheap entry level car @ $5k. They are going to sell that car for 20 all day long with leather and tech. It’s faster than all gas cars and nearly 1/4 the cost of ownership. GMFordStellantis better figure out how to make a battery car and fast. It isnt even going to be about pushing legislative agenda anymore. If they don’t go electric, who in their right mind is gonna spend 40-50, when a better car is selling for 30. I will lose that sale everyday, it always comes down to money.
If you want an honest price with fair trade value contact Dan Cummins Chevrolet in Paris KY or the CDJ dealership down the street. Blaine Snellen can assist at either location during your purchase situation.
I’m done with GM . Buying since 95. They screwed their customers with the chip problems. I waited a year for the chips for the vehicle I bought while they were putting chips in vehicles manufactured after mine. So they they basically told their customers we have your money so wait in line.
Buying a marketed auto from anyone other than a private individual reminds me of the tag line in war games….. “the only winning move, is not to play”. I won’t stand for corruption or greed in any case, especially big ticket items like cars and houses. If business was done above board, I would think differently. Until that happens, nothing will change.