The US economy is strong, and Americans are splurging on their trucks. That’s great news for General Motors, which reported strong second-quarter earnings Thursday, boosted by higher pickup truck prices.
GM (GM) credited higher prices and robust North American demand for its lineup of pickup trucks, including the Chevrolet Silverado and GM (GM)C Sierra. The automaker’s net income rose 1.6% for the second quarter to $2.4 billion, in part because of its truck sales.
“Our confidence in our full-year outlook is based on our strong full-size truck rollout, other key launches and ongoing cost savings,” GM CFO Dhivya Suryadevara said in a release.
Americans are increasingly choosing SUVs and trucks over sedans and other small cars. That trend has been in place for years. But as the US economy strengthens, customers have opted for higher-end truck models with extra features.
Higher truck prices will help make the second half of the year even stronger than the first, Suryadevara said. GM is rolling out more trucks later this year and expects truck sales growth to continue. It reaffirmed its plans to build 40,000 units annually of its heavy-duty trucks at a remodeled plant in Flint, Michigan.
Increasing truck competition among GM and its rivals, including Ford (F) and Fiat Chrysler, doesn’t concern Suryadevara. She told CNBC that she credits the rising market share of its trucks to “discipline and incentives and record-high transaction prices.”
GM’s stock jumped nearly 3% in early Thursday trading, and it’s up 24% for the year.