GM to slow down production of big SUVs due to high oil prices: report

General Motors Corp. will slow down the production of its new lineup of large sport-utility vehicles during the second half of the year to cope with rising inventory as average U.S. gasoline prices stay at more than 3 dollars a gallon, The Wall Street Journal reported on Friday.

GM Chief Executive Rick Wagoner was quoted as saying on Thursday that the company would not shut down SUV production lines but would curtail "some" overtime and introduce other products into the production mix.

He didn't disclose further details. At least one of GM's production plants is capable of building both full-size SUVs and pickup trucks, and GM is about to launch new versions of its full-size pickup trucks, according to the report.

Any slowdown in production of large SUVs could put a dent in GM's bottom line, as the vehicles are substantially more profitable than the small and midsize cars, said the report.

The move highlights the risks in GM's strategy of relying on its lineup of large SUVs to propel its North American turnaround in the near term, it added.

The new SUV lineup has powered GM's improved financial results this year since launching in January. However, sales of SUVs have sagged as U.S. consumers have adjusted to soaring gas prices which have gone up 28 percent from a year ago and are close to the inflation-adjusted high reached in the early 1980s.

Source: Xinhua