GM Increasing SUV, Pickup Truck Production

The company is going to produce up to 48,000 to 60,000 more vehicles for the 2016 model year in a bid to profit from the booming demand for the type of vehicles.

The company’s plant in Arlington, Texas, which makes full-sized sport utility vehicles including the Cadillac Escalade and Chevrolet Suburban, has added Saturday overtime shifts since August 1, a GM spokesman said.

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Adding one day a week to production for a full year could result in as many as 60,000 additional vehicles a year, although production is likely to be less because of maintenance downtime or parts shortages, said the sources familiar with GM’s plans.

A spokesperson for the company reportedly said that industry sales were ahead of the expectations. Some other individuals informed about GM’s plans said the goal was up to 60,000 additional vehicles.

The factory is responsible for producing the full-size SUVs for GM including the Cadillac Escalade and Chevrolet Suburban. However, the big SUVs, as well as, pickups generate more than the average profit margin for General Motors Company (NYSE:GM)’s North American unit that delivered a strong 10.5% in the June quarter. He added that sales of GM’s full-size SUVs are considerably higher, and it has been making efforts to look for creative ways to boost production in order to fulfil demand and rebuild its inventories. The reduction in gasoline prices to $3 a gallon has contributed to the resurgence. The automaker does not reveal the profit margins per vehicle. Through the first half of 2015, the plant has seen its production increase by 32 percent compared to last year to 162,431 vehicles.