GM increases production of SUVs

GM is to raise production of the Cadillac Escalade

US car giant General Motors is raising production of its largest sport utility vehicles (SUVs), despite fears that such cars are losing popularity.

It will build up to 12,000 extra full-size SUVs, but is cutting spending on its smaller models as buyers switch to more fuel-efficient cars.

Large SUV and pick-up trucks are a key market for GM, responsible for £51bn ($29bn), or 26% of total sales in 2005.

The firm lost $10bn last year as it struggled badly in its home market.

Overall US sales of gas-guzzling SUV's have fallen sharply, hit by rising fuel prices and competition from new "crossover" models that are built more like cars than trucks.

The 12,000 extra Chevrolet Tahoe, GMC Yukons and Cadillac Escalades will be built at GM plants in Texas, Wisconsin and Mexico.