GM is boosting heavy-duty truck production, adding a sixth day at one of its core Michigan facilities to meet growing demand for its gas-powered pickups.
The details: The ramp-up will take place at GM’s Flint Assembly plant, where the Chevrolet Silverado and GMC Sierra heavy-duty pickups are built, Reuters reported.
GM sold about 320,000 heavy-duty Silverado and Sierra trucks in the U.S. last year.
Production at the Flint plant will increase from five to six days a week in June.
The Silverado and Sierra, with average transaction prices above $60,000 and $70,000, respectively, are two of GM’s biggest profit drivers.
Why it matters: GM’s production increase signals continued confidence in one of the industry’s most profitable and resilient segments, better positioning stores to capitalize on the strong demand for high-margin trucks.
Between the lines: Demand for GM’s heavy-duty pickups underscores the staying power of trucks in the current market, even as concerns grow over rising gas prices tied to the Iran conflict.
The national average price for a gallon of regular gasoline is $3.99, up about $1 since the end of February, according to AAA.
Reports indicate EV consideration among consumers has ticked up since the war against Iran began.
GM, however, has indicated it could take time to see the real impact of higher oil prices on vehicle sales, even as it ramps up truck production.
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What they’re saying: "Usually it takes four to six months of sustained high oil prices before people start to think, 'Maybe I should go for less mileage, or maybe I should buy down,' I don't think we see that," said GM CFO Paul Jacobson at Bank of America Conference, earlier this month, per a Reuters report.
Bottom line: GM is leaning into a segment that continues to deliver strong margins and steady buyer demand.
For dealers, that means more opportunity in the near term, but also a reminder to watch how long elevated fuel prices last and whether they eventually start to shift shopper behavior.
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