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).