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Ford Motor Company (F), General Motors Company (GM): Will Chevy’s 2015 Tahoe and Suburban Avoid Extinction?

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GM’s 2015 Chevy Tahoe. Photo credit: General Motors.

A decade ago, Detroit automakers Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) were well known for all the wrong reasons. Their vehicles were poor in quality, were less valuable, and guzzled gas like it was going out of style — and, ironically, it was about to be.

After the recession forced major strategic changes upon America’s two largest automakers, they saw the light: To survive, they needed to make better, smaller, more fuel-efficient vehicles. This week, General Motors Company (NYSE:GM) introduced its all-new 2015 Tahoe and Suburban, but can the full-size SUVs make a sales comeback in this day and age? Or are they the next gas-guzzling vehicle doomed to go extinct?

Graph by author. Information from Automotive News DataCenter. 2013 estimated from sales through August.

As you can see, sales of the Tahoe and Suburban crashed and have failed to make a comeback. Some of you may already suspect that the financial crisis and the following severe recession caused those sales to drop. While that had an effect, consider that it was more of a nudge for consumers to change their tastes.

Graph by author. Information from Consumer Reports.

Consumers now desire great fuel economy. That’s what killed the previous Tahoe and Suburban generation, and fueled the success of crossovers such as Ford Motor Company (NYSE:F)’s Escape.

Graph by author. Information from Automotive News DataCenter. 2013 estimated from sales through August.

Another reason Chevy’s full-size SUVs failed to make a comeback? They were outdated. As General Motors Company (NYSE:GM) trudged through bankruptcy, it didn’t have the cash to redesign many of its vehicles. But now it does, and General Motors Company (NYSE:GM) plans to refresh, redesign, or replace 90% of its vehicle lineup by 2016.

Now, after a much-needed redesign and update for the full-size SUVs, will these revamped models be enough to steal back sales from the hot crossover/utility segment?

What’s new in 2015
“There are several new features and enhancements at the core of the all-new 2015 Suburban and Tahoe that will extend the legacy Chevrolet has built as the segment leader,” said Tim Mahoney, Chevrolet’s global chief marketing officer. “Customers will experience greater refinement, efficiency and safety, with the same capability that has made Chevrolet the go-to brand for full-size SUVs.”

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