Less than a year after their launch, production of the new full-size sport-utes from General Motors Corp. has been scaled back.



GM has approved cutbacks at plants in Texas , Wisconsin , and Mexico to reduce inventories of unsold vehicles, said Troy Clarke, president of GM North America. Clarke told TheCarConnection.com that the inventories had begun running close to 90-day levels and GM instituted the cuts rather than watch the inventories increase some more.



The plants will pause production for the first two weeks of January, then reopen Jan. 15 with assembly-line speed reduced by ten percent, to 50 vehicles an hour, making the cuts more or less permanent for the foreseeable future.



Clarke said GM's new SUVs have picked up significant market share in the full-size segment this year. "We have about 70 percent of the segment now," he said. "But the segment has shrunk," he said.



GM originally assumed the segment would be about one million units annually but it shrunk rapidly as gasoline prices have risen. Sales in the segment are now unlikely to top 750,000 units this year.



In addition, Mark LaNeve, the GM group executive for sales, service, and marketing, also said that GM has become more careful about protecting the residual value of its vehicles. Declining residual values has been a huge factor in the decline in popularity of many GM brands. Overproduction invariably forces carmakers to offer large incentives to keep inventories in check, which undercuts the resale value of new vehicles. As GM's use of incentives has declined in the past year, the residual value of GM vehicles has begun to improve, he said.



"We have some competitors that haven't been as disciplined," LaNeve told reporters in Detroit last week.

Overproduction invariably forces carmakers to offer large incentives to keep inventories in check, which undercuts the resale value of new vehicles. As GM's use of incentives has declined in the past year, the residual value of GM vehicles has begun to improve, he said.

"We have some competitors that haven't been as disciplined," LaNeve told reporters in Detroit last week.