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 They were outdated.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.”
The first difference you’ll notice is the larger grille on the front of both vehicles, but aside from that, the design is more evolutionary than revolutionary. That isn’t necessarily a bad thing, and it fits the trend with the redesigns of General Motors Company (NYSE:GM)’s Silverado and Sierra trucks.
The Tahoe and Suburban both have a standard 5.3L V-8 featuring direct injection, with cylinder deactivation to help retain power yet improve fuel economy. Official miles-per-gallon information hasn’t been released yet, but I believe if it fails to improve significantly from the last generation, it will be difficult to revive Tahoe and Suburban sales.
The two SUVs also boast a slew of new safety technologies. Those features include forward collision alert, front park assist, lane change assist, rear cross traffic alert, lane departure warning, and adaptive cruise control. In addition, both SUVs include the segment’s only front-seat center airbag for additional protection.
GM didn’t stop there. The interior also received a makeover:
2015 Chevrolet Suburban showcases an all-new interior. Photo credit: General Motors.
According to General Motors Company (NYSE:GM), both vehicles include;
Fold-flat second- and third-row seats that enhance cargo convenience — including an available power-folding feature.
18-inch standard wheels that are a half-inch wider, reducing tire flex for improved cornering performance. Twenty- and 22-inch wheels are available.
Available 8-inch color touchscreen radio, with next-generation MyLink connectivity.
Up to six USB ports and six power outlets — including a 110-volt three-prong outlet — to support electronic devices of all kinds (up to 12 charging locations total).
Available rear-seat entertainment system with dual screens (Suburban only) and Blu-ray/DVD player,
Conversation mirror in the overhead console that provides a panoramic view of the rear seats.
Keyless entry and push-button start.
Takeaway
GM is indeed a much better company than it was a decade ago, when these full-size SUVs were some of the best-selling and most profitable vehicles on the planet. General Motors Company (NYSE:GM) seems to think there’s still significant pent-up demand in the full-size SUV segment, but I’m just not as convinced.
If there is, these models look to reverse their sales slide and bring in big profits for GM over the next few years. And if GM’s recent redesigns of its full-size pickups and SUVs are a hit with the market, we could be on the cusp of a very profitable few years for the folks at General Motors and its investors.
The article Will Chevy’s 2015 Tahoe and Suburban Avoid Extinction? originally appeared on Fool.com and is written by Daniel Miller.
Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors and owns shares of Ford.
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