General Motors Announces $24M Investment For Hub Development

General Motors Company (NYSE:GM) announced that it is upgrading its Fort Wayne assembly hub to increase production of the new Chevrolet Silverado 1500 and GMC Sierra 1500 pickup trucks. The U.S. automaker will invest $24 million to upgrade the facility situated at Fort Wayne, IN.

The investment will add conveyors and other tools in the assembly plant required to increase production. Adding the latest investment announcement, General Motors has invested in excess of $1.2 billion to develop the facility for vehicle production since 2015.

With unending demand for SUVs and pickup trucks, automakers are widening their product line and flooding the market with enhanced and spacious vehicles. Although the demand for such large vehicles declined over the last few months, automakers expect the demand to regain traction. Robust demand for large vehicles is likely to drive the industry players’ top line, who otherwise are making loss, resulting from the drop in traditional passenger car sales.

Launched in the second half of 2018, Chevrolet Silverado 1500 and GMC Sierra 1500 crew cab pickup trucks were among the top revenue contributors for General Motors in the first quarter of 2019. The company projects to witness a similar performance by the pickup models in the second quarter.

In the recently announced U.S. auto sales of May 2019, many major automakers observed rise in vehicle sales after a dry spell since the beginning of 2019. Last month, industry players — including Fiat Chrysler Automobiles N.V. (NYSE:FCAU) , Toyota Motor Corporation (NYSE:TM) and Nissan Motor Co. (OTC:NSANY) — posted sales gain compared with the same month of 2018.

General Motors no longer announces monthly sales numbers. However, per the data center of Automotive News, the largest U.S. automaker sold 260,300 cars and light trucks in May compared with 263,500 a year ago.

The long-term growth rate of Fiat Chrysler is 2.8% while for Toyota is 10.4%. Further, Nissan’s growth rate for the next year is expected to be 30.4%.

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