Truck Demand Spikes, GM Earnings Rise To Match!

General Motors (Click Here for Quote) has doubled its year-on-year earnings, thanks mostly to a huge uptick in demand for its trucks.

The auto maker has long paid off its loans from the government taken out during the financial crash, and has been rapidly expanding in foreign markets over the last few years. Specifically, China has seen the bulk of its growth, where its profit margins are over 10%.

So why trucks, and why now? Trucks are profitable; while there certainly are many different kinds of trucks on the road, there are far fewer than a normal car, and construction companies require both light and heavy trucks for work crews. Whenever construction grows, particularly in places like China that has been on a construction frenzy over the past few decades, the demand for trucks grows too.

In the United States, new homes are being built at a much faster rate than just a few years ago, so construction crews are buying more trucks to use building more houses. Similarly, when construction slows down, the demand for trucks usually drops off even more quickly.

Read More about GM’s earnings on Yahoo! Finance

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