Is Unprofitable General Motors Worth Saving?
Yes, says Saudi Arabia. General Motors’ sales in the Kingdom surged 8% in 9 months over the same period in 2007, a staggering achievement considering GM’s world-wide sales fell 3% year-over-year in the first half of 2008.
More interesting is the models that are doing best: GMC Yukon/Yukon XL, Chevrolet Tahoe/Suburban, Cadillac Escalade, HUMMER H3 – yes, enormous SUVs with an even more enormous appetite for gasoline. While American consumers are divorcing their beloved SUVs due to high gas prices, Saudis awash with oil money are picking up the slack.
Perhaps one should not be so surprised that Saudis are jumbo SUVs’ best patron. Aside from cheap gasoline, Saudis’ love for Detroit’s SUVs is perhaps a manifestation of Saudis’ preoccupation with security.
These vehicles, though cumbersome and gas hungry, are often the ideal candidate for the task of world leader transportation. Their imposing stance is a good deterrent and the bulk will likely better protect its passenger– both very desirable qualities given the Kingdom’s many enemies.
Besides, who wouldn’t want a car that makes 24-inch rims look small?
Bo-yun Liu
