Will Chevy's 2015 Tahoe and Suburban Avoid Extinction?


GM's 2015 Chevy Tahoe. Photo credit: General Motors.

A decade ago, Detroit automakers Ford (NYSE: F  ) and General Motors (NYSE: GM  ) were well known for all the wrong reasons. Their vehicles were poor in quality, were less valuable, and guzzled gas like it was going out of style -- and, ironically, it was about to be.

After the recession forced major strategic changes upon America's two largest automakers, they saw the light: To survive, they needed to make better, smaller, more fuel-efficient vehicles. This week, GM introduced its all-new 2015 Tahoe and Suburban, but can the full-size SUVs make a sales comeback in this day and age? Or are they the next gas-guzzling vehicle doomed to go extinct?


Graph by author. Information from Automotive News DataCenter. 2013 estimated from sales through August.

As you can see, sales of the Tahoe and Suburban crashed and have failed to make a comeback. Some of you may already suspect that the financial crisis and the following severe recession caused those sales to drop. While that had an effect, consider that it was more of a nudge for consumers to change their tastes.


Graph by author. Information from Consumer Reports.

Consumers now desire great fuel economy. That's what killed the previous Tahoe and Suburban generation, and fueled the success of crossovers such as Ford's Escape.


Graph by author. Information from Automotive News DataCenter. 2013 estimated from sales through August.

Another reason Chevy's full-size SUVs failed to make a comeback? They were outdated. As GM trudged through bankruptcy, it didn't have the cash to redesign many of its vehicles. But now it does, and GM plans to refresh, redesign, or replace 90% of its vehicle lineup by 2016.

Now, after a much-needed redesign and update for the full-size SUVs, will these revamped models be enough to steal back sales from the hot crossover/utility segment?

What's new in 2015
"There are several new features and enhancements at the core of the all-new 2015 Suburban and Tahoe that will extend the legacy Chevrolet has built as the segment leader," said Tim Mahoney, Chevrolet's global chief marketing officer. "Customers will experience greater refinement, efficiency and safety, with the same capability that has made Chevrolet the go-to brand for full-size SUVs."

The first difference you'll notice is the larger grille on the front of both vehicles, but aside from that, the design is more evolutionary than revolutionary. That isn't necessarily a bad thing, and it fits the trend with the redesigns of GM's Silverado and Sierra trucks.

The Tahoe and Suburban both have a standard 5.3L V-8 featuring direct injection, with cylinder deactivation to help retain power yet improve fuel economy. Official miles-per-gallon information hasn't been released yet, but I believe if it fails to improve significantly from the last generation, it will be difficult to revive Tahoe and Suburban sales.

The two SUVs also boast a slew of new safety technologies. Those features include forward collision alert, front park assist, lane change assist, rear cross traffic alert, lane departure warning, and adaptive cruise control. In addition, both SUVs include the segment's only front-seat center airbag for additional protection.

GM didn't stop there. The interior also received a makeover:


2015 Chevrolet Suburban showcases an all-new interior. Photo credit: General Motors.

According to GM, both vehicles include;

  • Fold-flat second- and third-row seats that enhance cargo convenience -- including an available power-folding feature.
  • 18-inch standard wheels that are a half-inch wider, reducing tire flex for improved cornering performance. Twenty- and 22-inch wheels are available.
  • Available 8-inch color touchscreen radio, with next-generation MyLink connectivity.
  • Up to six USB ports and six power outlets -- including a 110-volt three-prong outlet -- to support electronic devices of all kinds (up to 12 charging locations total).
  • Available rear-seat entertainment system with dual screens (Suburban only) and Blu-ray/DVD player,
  • Conversation mirror in the overhead console that provides a panoramic view of the rear seats.
  • Keyless entry and push-button start.

Takeaway
GM is indeed a much better company than it was a decade ago, when these full-size SUVs were some of the best-selling and most profitable vehicles on the planet. GM seems to think there's still significant pent-up demand in the full-size SUV segment, but I'm just not as convinced.

If there is, these models look to reverse their sales slide and bring in big profits for GM over the next few years. And if GM's recent redesigns of its full-size pickups and SUVs are a hit with the market, we could be on the cusp of a very profitable few years for the folks at General Motors and its investors.

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Read/Post Comments (12) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2013, at 2:51 PM, Rotomoley wrote:

    Had two Suburbans. Loved them at the time. For those that need them, hope they can continue. New interior is nice. I doubt they can significant improve efficiency. I've moved on.

  • Report this Comment On September 14, 2013, at 3:59 PM, dwduke wrote:

    The grill on the Suburban and Tahoe look great. I wish the pickup had that cool looking grill.

  • Report this Comment On September 14, 2013, at 4:32 PM, kca124cain wrote:

    A decade ago "poor quality"??? What kind of drugs is this author on, he is thinking 25 or 30 years ago. I have a 2003 Suburban, which is the best vehicle I have ever owned and that is out of 52 vehicles including domestic, Asian, and european.

  • Report this Comment On September 14, 2013, at 4:43 PM, isp5190 wrote:

    The sales chart is comparing a Escape to a large SUV, apples to oranges. Buyers of large SUV's are looking for a vehicle for towing or an increased cargo area. Sales will never be the same as there were with $1 to $2 a gallon gas. There is a need for the large SUV, but not for everyone.

  • Report this Comment On September 14, 2013, at 7:59 PM, Topcat88 wrote:

    Most people who don't drive an suv like a Suburban, only think about gas mileage. I got my first suv in 2004 liked it, I went back in 2006 and got the new body style Suburban. my grandkids that want to go places with me and grandma, Im not going to put them in a milk creat, it,s all about safety, power to get rolling once you get on the freeway. $4.00 per gallon today,and Im driving around with my 2year old grandson, target, walmart, smart&final. He's safe in his car seat, watching Thomas the train on the DVD player, AC on that's what an SUV is all about. I feel good an safe. and I'm looking into a new one, for next year. SUVs will be here for a while. Get one, or just buy American.

  • Report this Comment On September 14, 2013, at 8:57 PM, frellmedead wrote:

    They could improve fuel economy greatly by adding more gears to their transmissions. Used to have a Ford Focus with a 4-speed auto and it got horrible gas mileage (less than 20 mpg combined) for a small car. (It sucks a lot of gas when it doesn't shift to second until 20 mph.) Even a fifth gear makes a big difference for a small car. Tahoes and Suburbans should have a minimum of a six-speed auto transmission, and preferably eight or nine.

  • Report this Comment On September 14, 2013, at 9:02 PM, bwaaa20 wrote:

    There are thousands of used Tahoes, Durangos, Expeditions , and so on out there. Of course the demand for the new ones are less.

  • Report this Comment On September 14, 2013, at 9:19 PM, imDanielle2 wrote:

    That new interior is awesome!

  • Report this Comment On September 14, 2013, at 9:55 PM, mikeflores2000 wrote:

    The era of the Godzilla SUV is OVER when gas hits $7 a gallon unless switched over to Nat Gas.

  • Report this Comment On September 14, 2013, at 11:35 PM, lonestar5775 wrote:

    I am a GM man through and through, if it doesn't have GM on it somewhere, I am not buying it, but the 2015 Tahoe's and Suburban look like a larger version of the Chrysler Aspen...take a look and see what you think? Come on GM you can do better than this.

  • Report this Comment On September 15, 2013, at 3:03 AM, tony4390 wrote:

    ok... bought my first used one in 86...it was a great truck... in 96 my little girl moved to Alaska with her husband... So I bought a new one ... fully loaded k1500... ... Still have it !!! Every year my wife and I take it up there to stay for a month..... just got home two weeks ago from there... oh did i mention that I live in central Florida?? east coast??... 590,000 miles on her now... I spent some money on up kept... But now that both me and my wife had read this.... Monday we are getting a new one... and the kicker...My 20 yr old son want this truck for him self.......Now can you ash for anything more.....peace..

  • Report this Comment On September 20, 2013, at 11:56 AM, unohoos wrote:

    Love this redesign!

    Sorry, Mr. Miller, but you're wrong once again!

    21 MPG highway is NOT a gas guzzler. See the Expedition and Toyota Sequoia for that.

    Gonna order one as soon as a price list is available.

    Would've bought a 2013 if not for the 3rd row mess and the knowledge that a redesign was coming. So, I bought a 2013 Audi Q7 which I do not like. hopefully, I can unload it, but will trade if I have to.

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