DETROIT -- Initial indicators show that General Motors' high-stakes gamble to pull forward the launch of its new full-sized SUVs amid unstable gasoline prices might pay off.

January sales of the first SUVs on the GMT900 architecture -- the 2007 Chevrolet Tahoe, GMC Yukon and Cadillac Escalade -- were strong. Dealers say the redesigned SUVs are selling at or near sticker price.

GM executives have acknowledged that the high-margin SUVs are critical to GM's financial success this year.

Dealers sold 3,000 new 2007 model Tahoes in January, says Paul Ballew, GM's executive director of global market and industry analysis. That's twice as many as GM had hoped for, he says.

GM shipped Tahoes to dealers in mid-January. It started building and shipping Yukons in the second half of January, so sales were minimal at about 200 Yukons for January, Ballew says. GM has shipped only 400 new Escalades, he adds.

"We've exceeded the sales estimate for the month," Ballew says. "We turned the production at a very healthy pace."


Strong start
Dealers say the public reception of the vehicles has been positive.

"It's going to be a hot seller," says Frank Debartolo, general sales manager of Bredemann Chevrolet in Park Ridge, Ill. "People with older units will want this. Once we get more product on the ground, it'll start selling well."

Debartolo says he got three Tahoes on Jan. 27 and sold two the next day with a slight discount. He has two factory orders for customers who wanted specific vehicle features and has ordered 10 more.

Multistore dealer Mike Bowsher has ordered 250 Yukons and 60 to 70 Tahoes. Bowsher owns a Chevrolet store in Nashville, Tenn., and several Pontiac-Buick-GMC stores in Georgia and Florida.

"We won't see sales volume until we get plenty of product on the ground," says Bowsher, co-chairman of the Pontiac-GMC national dealer council. "Once I get this lot filled up, we'll do some serious volume."

GM is offering no incentives on the new SUVs, dealers say. It has cut prices on the new SUVs and has added features, while trying to minimize rebates.

Bowsher says consumers will pay close to sticker price.

"I had one new Yukon come in, and I sold it in one hour for full sticker," he says.

The Yukon starts at $34,690, $3,290 less than the 2006 model. The Tahoe starts at $33,990, about $2,000 less than its predecessor. The 2007 Escalade starts at $57,280, the same as the prior model. All prices include shipping.
Built in Texas
Tahoes, Yukons and Escalades are built at GM's Arlington, Texas, plant. Many Texas dealers got the first wave of shipments, says Scott Brasher, general manager of Brasher Motor Company in Weimar, Texas. He says he got eight new Tahoes on Jan. 6 and has sold two of them. He expects sales to improve once he gets a broader selection.

But Brasher says some buyers have gotten accustomed to rebates.

"The ride is much better, and people are impressed with the gas mileage," he says. "What customers are having a hard time getting used to is 'Where's my $8,000 rebate off the sticker?' "

Media reviews of the new vehicles are positive, especially regarding the new interiors. In Car and Driver's February issue, writer Tony Quiroga says, "The 2007 Chevrolet Tahoe LTZ we drove is good enough to steal sales away from the competition and, equally important, will likely sell without the incentive coercion that was necessary to move the previous generation throughout much of its life."

Says Jim Hall, vice president of industry analysis for AutoPacific Inc. in Southfield, Mich.: "They are a vast improvement." Hall says his only criticism would be that GM has not marketed the trucks' fuel economy aggressively. The vehicles get 16 mph city/22 mpg highway. That's up from 15 mpg city/20 mpg highway for 2006 two-wheel-drive models.
Full-sized schedule
GM's introduction timetable for full-sized SUVs

Chevrolet Tahoe: Early January

GMC Yukon: Late January

Cadillac Escalade: Late January

Chevrolet Suburban: April

Chevrolet Avalanche: April

Cadillac Escalade ESV: April

GMC Yukon XL: April

Cadillac EXT: April

Dealers say the redesigned SUVs are selling at or near sticker price.

Dealers sold 3,000 new 2007 model Tahoes in January, says Paul Ballew, GM's executive director of global market and industry analysis. That's twice as many as GM had hoped for, he says.