Cruze pushes GM to $3.2 billion quarterly profit

The Chevrolet Cruze compact came along at just about the perfect time — when gasoline prices have taken a huge jump. It has been on the market for less than a year, but General Motors said 600,000 Cruzes already have been sold worldwide.

DETROIT -- GM is on Cruze control.

General Motors introduced the Chevrolet Cruze last October as its answer to the Toyota Corolla and other small car rivals, and the timing couldn't have been better.

Gas prices have risen nearly 50 percent since the car hit the U.S. market, and sales of the Cruze worldwide are at 600,000, making it one of the most successful car launches in years.

It's the biggest example of GM's strategy to build better small cars, a market it ceded to the Japanese for years.

While trucks and SUVs still provide much of its profit, GM is banking that higher fuel prices will drive customers toward smaller models.

The company plans to launch its first compact Buick and the subcompact Chevrolet Sonic later in the year.

The strategy is showing signs of paying off, as GM reported its best profit in more than a decade on Thursday. As gas prices marched toward $4 in the first quarter, the Cruze and crossovers like the Chevy Equinox helped GM earn $3.2 billion.

By contrast, it lost $4.4 billion in the summer of 2008, when gas prices last spiked over $4 and the company had a paltry selection of cars with good gas mileage.

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Nearly half of GM's latest profit came from selling its stake in an auto parts company. But it still made $1.7 billion by offering fuel-efficient cars that people wanted to buy.

The Cruze was a big contributor, with sales of more than 50,000 in the U.S. alone during the quarter.

Its worldwide sales doubled, it gets 36 mpg on the highway, and it is far quieter, handles better and has a more plush interior than previous GM compacts, and even Japanese competitors.

In March, those qualities helped it break into the list of America's 20 top-selling vehicles. And its April sales passed the Corolla, the best-selling compact for years.