FORTUNE — The yelling and screaming over big SUVs from a decade ago ended in a draw. Liberals scolded conservatives, arguing that vehicles like the Chevrolet Tahoe and Ford Expedition were too wasteful, too unsafe — too obnoxious, in the eyes of their detractors — to be allowed on the road.
The liberal New York Times championed the anti-SUV viewpoint, much to the indignation of owners and fans of Chevrolet Tahoes, Lincoln Navigators, Nissan Armadas, and Toyota Sequoias. As fuel efficiency standards grew more stringent and the economy collapsed in 2008, the market for big SUVs, which are built on pickup truck frames, shrank.
The shouting has died down, but General Motors Co. (GM) didn’t give up on big SUVs. To the contrary, GM now dominates the category as the industry is shifting toward “crossovers,” car-based utility vehicles that still can haul, tow, and carry multiple passengers, while consuming less fuel. (Crossovers, at least so far, don’t seem to be riling the environmental lobby.)
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GM says a sizable number of customers still like big, truck-based SUVs: The automaker’s latest and greatest series of Chevrolet Suburbans and Tahoes and GMC Yukons have begun arriving at U.S. dealers.
GM’s new SUVs are about 7% more fuel efficient than the previous generation. They’re equipped with more infotainment choices, apps, navigation, and safety features. Most important, the new SUVs may be more profitable for GM than ever because the company’s near-monopoly may allow it to charge higher prices. Each sale could add $10,000 or more to pretax profit, according to financial analysts — very important since the automaker’s profits on passenger cars are pinched.
Large and plush, big SUVs are an ideal way for a large family to drive to a weekend cabin or a vacation spot with all the luggage, sports equipment, and pets required for such outings. To read the other side of the story, try High and Mighty: The Dangerous Rise of the SUV by Keith Bradsher, a New York Times reporter.
In 2001, the U.S. market for large SUVs peaked at 786,484 out of a total market of 17.2 million vehicles. GM models accounted for about two-thirds of sales or about half a million Suburbans, Tahoes, and Yukons. By 2009, the number of SUVs sold had dropped to 218,484 out of 10.4 million vehicles.
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Last year, the number of big SUVs sold had risen to 260,866 out of 15.6 million vehicles. GM now sells about three-quarters of that number, a dominant position. GM executives said they wouldn’t be surprised if Toyota (TM) dropped its Sequoia and Nissan dropped its Armada altogether, their numbers having dropped to a level that strains the business case for reinvesting in new versions.
Ford (F) dropped its massive Excursion SUV and has allowed its Expedition to grow long in the tooth, without much investment in new technology or upgrades. Last month, Ford disclosed that it will “refresh” Expedition with a new V-6 turbocharged engine and new suspension, rather than a full redesign.
For GM, the case for investing in a complete redo was a no-brainer: “Our customers are looking for safety and security,” said Mark Clawson, a Chevrolet marketing manager. With lots of mass, heavy-duty suspension and 360 degrees of visibility, the big SUVs do convey a sense of insulating humans in a car from danger on the highway, amid enormous trucks and in bad weather.
Perhaps society will continue to move away from the big SUV, just as it moves from reading its news on paper. GM is betting big that the hardy band of devotees will endure. Consumer reception for GM’s new models will confirm if the automaker is correct.
