How do the profit margins on full-size trucks and SUVs compare to smaller vehicles for Detroit automakers?

Full-size trucks earn dramatically more profit than small cars

The evidence shows that Detroit automakers make far larger profit margins on full-size pickups and SUVs than on smaller cars and sedans. Here is how the numbers line up.

Full-size pickups

• GM’s large pickups bring in at least $17,000 in pretax profit per truck [1].
• Dealers report healthy front-end grosses on these trucks, which help offset weaker numbers from other segments [2].
• Automakers tend to avoid price competition in the pickup segment because of steady demand and loyal buyers, which helps protect those fat margins [7].

Full-size and midsize SUVs

• GM expects similar strong profit success from its refreshed full-size SUVs—Chevrolet Tahoe/Suburban, GMC Yukon/XL, and Cadillac Escalade [4].
• Even midsize three-row SUVs (Chevrolet Traverse, Buick Enclave, GMC Acadia) posted increased profit margins in the third quarter of 2024 [3].

Smaller cars and sedans

• Many Detroit Three sedans are so unprofitable that the manufacturers have stopped building them altogether [1].
• GM’s vice chairman has said small cars are not profitable without sufficient sales volume [6].
• In practice, GM has steered resources like computer chips away from small cars and toward higher-margin full-size models [5].

In plain terms, the evidence makes clear that Detroit automakers see a huge margin gap: trucks and SUVs generate thousands of dollars in profit per vehicle, while many small cars lose money or cannot break even. That is why the companies have cut back on small cars and focused production on pickups and SUVs.