If you're an investor, you already know 'tis the season. Earnings season, that is.
This week General Motors reported its earnings and it missed in a pretty big way. I didn't though as I shorted the stock and made a few bills on the company's unfortunate news. While there were plenty of excuses from a strong dollar to a new business model in Russia to poor business in Europe and South America, there was one bright spot.
That, my friends, would be the Chevrolet Tahoe.
Taking a snippet from the Yahoo Finance story, check this out:
The success of the Chevy Tahoe
The Chevy Tahoe tells the story. Redesigned for 2015, this full-size SUV sells for roughly $50,000, on average, with no rebates or incentives available -- usually a sure indicator of a popular vehicle in high demand. Mileage is a painful 18 MPG, but with gas at $2.50 or so, who cares? During the first three months of the year, GM sold about 21,000 Tahoes, up 33% from last year. Automakers can easily earn $15,000 in profit on each large pickup or SUV, which makes the Tahoe an indisputable winner for GM.
The biggest problem we've said GM has is it doesn't really have a volume product aside from the Silverado pick-up truck. Sure, the Equinox moves a decent amount of units and the Cruze does OK — most of it going into rental fleets. After the 2015 New York Auto Show, we're pretty sure the all-new Chevrolet Malibu will not eat away at the market share owned by the Honda Accord, Nissan Altima or Toyota Camry.
So, I have to ask: What is GM doing RIGHT with the Tahoe that it CAN'T get RIGHT with its other products?
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