BIG QUARTER

America is great again, according to pickup truck sales

Obsession
Energy Shocks
Obsession
Energy Shocks

Sales of the large vehicles Americans have long loved helped double profits at General Motors in the second quarter.

Net income at the largest US carmaker hit $2.87 billion in the quarter, up 156% from $1.12 billion in the second quarter of 2015. High-margin pickup trucks and SUVs supercharged earnings, as the decline in gasoline prices coaxed Americans back to beefier but less fuel-efficient vehicles.

“We had the best Q2 light truck retail sales in nine years and the best mid-size retail pickup sales in 11 years,” CEO Mary Barra told analysts on a post-earnings conference call.

Economically this is very good news. In addition to a sign of robust consumption, American appetite for pickups is seen as a key barometer of small business activity.

On the other hand, the demand for trucks and SUVs has been so pronounced that it’s threatening to set-back efforts to boost the average fuel efficiency of the entire American automobile fleet to 54.5 miles-per-gallon by 2025 (pdf).

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