Trucks, SUVs give GM profits a big lift

Such sales in North America helped the firm earn $945 million in the first quarter.

Encouraged by lower gas prices, consumers in the U.S. spent big in the first quarter on vehicles that carry lots of passengers and cargo — and deliver hefty profit margins for General Motors Co.

The shift to pickups and sport utility vehicles helped GM record a $2.18-billion first-quarter profit in North America, its most lucrative market. Tougher conditions in Europe and South America whittled GM’s overall quarterly profit down to $945 million.

Late last decade, big SUVs such as the Chevrolet Tahoe fell out of favor as consumers consistently saw prices above $3 a gallon at the gas pump and the U.S. economy struggled. But the economy is now growing, if somewhat unevenly, and gas has averaged about $2.30 a gallon so far this year. As a result, consumers bought nearly 55,000 big SUVs from GM, the best Januarythrough-March total in seven years.

Pickup sales also rose as conditions improved for small businesses. GM sold more than 198,000 in the U.S., the best first quarter for the vehicles in eight years, according to Ward’s Automotive.

Those big vehicles bring in sizable profits. For the quarter, the average price of a Tahoe rose 8% to more than $57,000, Kelley Blue Book said. Other truckbased SUVs saw similar or even larger increases-Analysts estimate that GM makes around $10,000 apiece on the Chevrolet Silverado and Cadillac Escalade.

GM’s profit amounted to 56 cents a share, compared with only $125 million, or 6 cents a share, a year earlier. Last year’s quarter included a $1.3-billion charge for a series of recalls — including one for a deadly ignition switch problem.

GM shares fell $1.24, or 3.3%, to $35.92.