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GM Emphasizing Large SUVs, Unveiled a Longer Chevrolet Tahoe and Suburban

President Mark Reuss stated that General Motors Co sees significant potential in over-the-air software updates and could use its large truck and sport utility vehicle architecture to expand its array of cars.

The revamped Chevrolet Tahoe and Suburban, the first of a new generation of large SUVs whose earnings will help fund the development of electric vehicles that the carmaker promised for the future, were unveiled by General Motors (GM), which controls approximately 70% of the large sport utility market in North America with six models.

The 2021 Chevrolet Tahoe is 6.7 inches longer than the present Tahoe and has a cargo capacity of up to 122.9 cubic feet. It was unveiled in the arena where the Detroit Red Wings hockey team plays in downtown Detroit. A more car-like independent rear suspension results in 10 inches greater legroom and a smoother ride for third row passengers.

The length of the 2019 Chevy Suburban, which will increase by 1.3 inches to 225.7 inches, will rank it among the longest passenger cars available. Six-cylinder diesel motors or eight-cylinder gasoline engines will power GM’s large SUVs.

According to Reuss, the cars include a revolutionary digital electrical architecture that allows for over-the-air software updates and new revenue streams.

Regarding the opportunity to offer clients new digital features or prevent warranty repairs with a software update, Reuss remarked, “It’s huge.” Over-the-air updates have been utilized by electric car manufacturer Tesla Inc. to generate revenue and provide low-cost problem fixes.

Reuss stated that the income from big SUVs will help fund investments as the industry transitions to electric vehicles. Among them are GM’s intentions to develop an electric pickup truck and construct a new battery facility.

Many of the new SUVs will be sold in Texas, where they are built at a plant. Reuss stated that GM has the option to produce more models because it has invested $1.4 billion (£1.09 billion) to develop the Arlington business.

“We don’t want to invest that much..and not have agility,” he stated.

GM has made significant investments in its largest pickup trucks and SUVs over the last five years, culminating with the debut of the Tahoe and Suburban. Rivals of GM in the Detroit market, Ford Motor Co and Fiat Chrysler Automobiles NV , are both planning to add more electric vehicles to their lines while simultaneously growing their massive SUV lineups.

Industry officials and analysts stated that profit margins on large SUVs can reach up to 30%, or more than $15,000 per vehicle, and that the Arlington, Texas plant operates around the clock to accommodate demand. According to estimates from Barclays, 72% of GM’s North American profit in 2018 came from big pickup trucks and SUVs.

Pricing and fuel economy information for the new SUVs were not released by GM, but data from ALG, a TrueCar subsidiary, indicates that the average Tahoe sold for $57,414 in November.

President Barack Obama’s fuel economy regulations in the US encourage automakers to increase the size of sport utility. Long and wide vehicles have a larger “footprint” and are easier to fulfill CO2 emissions and mileage goals.

Though he hasn’t unveiled a detailed proposal, President Donald Trump has stated that he intends to relax the CO2 requirements for cars. In a legal conflict with California over the preservation of the stricter fuel economy regulations under the Obama administration, GM has sided with Trump on this issue.

However, GM will soon face more fierce competition in this market. Through November 30, Ford increased sales of its rival large utility vehicles, the Ford Expedition and Lincoln Navigator, by 45%. In 2021, Fiat Chrysler Automobiles NV intends to introduce a redesigned Grand Wagoneer.

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