DETROIT – General Motors is upping the ante on its already highly profitable position as the No. 1 seller of full-size SUVs with its newly redesigned Chevrolet Tahoe and Chevrolet Suburban.
The revamped vehicles, which made their public debut Tuesday night in Detroit, are the first in a new generation of truck-based SUVs for GM that have become a golden goose for the automaker in a segment that it has owned for decades.
"Historically, we've absolutely dominated this segment," Barry Engle, GM president of the Americas, told CNBC on Tuesday night at the unveiling of 2021 Tahoe and 2021 Suburban in Detroit. "If you look at what we've done with this new truck, we've taken everything that was great and we just pushed it to a whole new level."
Despite increased competition from Ford Motor and others, Engle said he is "not concerned at all about" about GM's "ability to compete and to continue to just absolutely dominate" the segment.
The new Chevrolet SUVs are larger, more advanced and offer a wider range of choices for customers than current models. They share design cues from the recently redesigned Chevrolet Silverado pickup and feature an "all-new digital vehicle platform" with data processing power five times greater than the current models, according to GM.
GM's share of the full-size, nonluxury SUV segment, including GMC Yukon models, has been above 70% for several years, according to Cox Automotive. However, redesigned models from Nissan and Ford have eaten at GM's leadership in the segment.
GM's share of the full-size SUV segment fell 5 percentage points to 71% from 2014 to 2018, according to Cox. Through October, GM lost another 6 percentage points of market share this year as the United Auto Workers union's 40-day strike against the automaker tightened inventories and sales of the Ford Expedition picked up, according to data compiled by the auto research firm.
Sales of the Expedition accounted for 23% of the segment through October, up 7 percentage points from 2018. Ford's largest family hauler received its first redesign in nearly 20 years for the 2018 model year, creating the first real competition for GM's SUVs in recent years.
The Nissan Armada also has gained on GM in recent years, increasing its market share in full-size SUVs from under 5% to 9.5% from 2014 to 2018, Cox said.
Engle said he is "very confident" that GM will regain market share it has lost with its next-generation SUVs, which are expected to begin arriving in dealer showrooms in the middle of next year.
"I'm very much looking forward to next year and our new products and how awesome they are," Engle said. "We took what was already a pretty good thing and in every regard just took it to the next level."
Engle's comments echoed those of GM President Mark Reuss, who said the vehicles would "continue to set the pace for the full-size SUV market for many years to come."
"We are here to win. Chevrolet created the template for the modern SUV in 1935. In doing so, it created the template for winning that we're still following today," Reuss said during the unveiling Tuesday night.
While not a direct competitor, GM also faces increased competition from larger three-row crossovers such as the Kia Telluride and Hyundai Palisade, which have both been well received.
"These are true SUVs," Engle said when asked about competition from smaller crossover vehicles like the Telluride and Palisade. "Make no mistake, these full-size SUVs are in a class of their own."
CEO Mary Barra Tuesday night described GM's full-size SUVs as "very important to our overall company."
GM's truck franchise, which includes pickups and full-size SUVs like the Tahoe and Suburban, accounts for a $65 billion high-margin business, the company has said.
"These are important products for us from a profitability standpoint," Engle said, declining to disclose specific profit margins.
Profits from the vehicles are viewed as keys to GM's plans for autonomous and all-electric vehicles, including at least 20 new EVs globally by 2023.
GM has invested billions in its next-generation pickups and SUVs, according to company officials. The Arlington Assembly plant in Texas, which is GM's sole producer of full-size SUVs, has received more than $1.4 billion in investments since 2015.
GM's is also planning to roll out redesigned GMC Yukon and Cadillac Escalade models early next year, further boosting profits.
"They're very important vehicles," said Michelle Krebs, executive analyst at Cox Automotive's Autotrader. "The full-size SUVs are probably the second-most important vehicles to GM in terms of profitability, next to the pickup trucks."