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Gas prices don't deter SUV buyers [04/24/2006]

Gas prices don't deter SUV buyers

ARLINGTON, Texas (UPI) -- The General Motors Corps. assembly plant in Arlington, Texas, is working overtime to meet pent-up demand despite high gasoline prices.

The 2007 SUVs average less than 20 miles per gallon, and gas is likely to remain expensive, the Dallas Morning News reported. But GM officials and dealers say buyers who pay $40,000 or more for an SUV can afford $3 for a gallon of gas.

GM lost more than $10 billion last year and needs revenue from full-size SUVs to bolster its cash flow during reorganization, the newspaper said. The automaker is closing plants and shedding jobs to cut costs.

The company is experiencing strong sales for the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade. In the first quarter of 2006, Tahoe sales were up more than 37 percent, and GM's revenue per vehicle has climbed $1,000 to $19,960, partly because of higher sticker prices.

Mark Eddins, president of Friendly Chevrolet in Dallas, says demand for the new SUVs is greater than he anticipated, but the resulting tight supply is a nice problem for a domestic dealer to have.

Copyright 2006 by United Press International

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