Yukon Country

You could not help but cringe when General Motors unveiled a new line of 5,500-pound, gas-guzzling behemoths just as gas prices spiked and sales of large SUVs plummeted. After years of fumbles that have put America's biggest car company in a tough spot, had GM blown it again?

Not judging by the sales figures. As other large, truck-based SUVs suffer, GM's new generation is selling briskly, fuel costs be damned. A sizable niche of buyers wants a big SUV that can tow a boat or trailer or haul a lot of people, and most crossover SUVs don't cut it. But the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade have plenty of power and seat up to eight passengers. (The long-wheelbase Chevy Suburban, Yukon XL and Cadillac Escalade EXT can seat up to nine.) And fuel economy is better than in the old models. The most efficient powertrains in the lineup get 16 miles per gallon in the city and 22 on the highway. That may make Al Gore wince, but it qualifies as best in class.

Driving a big SUV in a traffic-clogged city is like putting a linebacker through his paces by asking him to high tea. So General Motors invited Kiplinger's to test the GMC Yukon in Alaska, where its size and power match the terrain.

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Unabashedly big

My assignment: Land in Anchorage and drive a Yukon Denali (base price: $48,165) a thousand miles in four days. When I first climb into the driver's seat, I am a little daunted by the Denali's size. The roof is 6 feet 5 inches high, and you have to step up nearly 2 feet to enter the cab. You'd expect it to handle like a barge, but GM has managed to tame this truck -- it's surprisingly carlike. Rack-and-pinion steering makes maneuvering easy. New front and rear suspensions, in tandem with electronically controlled shock absorbers, keep you well insulated from bumps. Better body stiffness means you don't feel tippy -- or even sense much lean -- around curves.

The Yukon Denali, an upscale trim level in the GMC family, is nicer than the Tahoe but not as bling-intensive as the Cadillac Escalade. Demographics confirm that Yukon Denali buyers are affluent (median income: $123,000), and nearly 60% are managers or professionals who often use the vehicle in their business. The Denali sports a unique chrome grill as well as a long list of standard equipment, including heated leather seats in the first and second rows, second-row seats that tumble forward with the push of a button to allow easy third-row access, remote start, power liftgate and a much-needed rear parking-assist feature.

Despite the Denali's massive 6.2-liter, 380-horsepower engine and our optional ($1,995) 20-inch wheels, the ride is quiet. The interior is comfortable though not quite luxe, with a dash design that's easy on the eyes, wood-and-leather heated steering wheel ($150) and even an iPod/MP3 jack. Our model has a $1,295 rear-seat DVD entertainment system, but the scenery beats anything a disc could hold.

The last frontier

On a sunny Monday morning when the temperature promises to hit 70 degrees, Emily, who is the photographer, and I set off. Everywhere we look is a picture postcard of snow-covered peaks, and about 30 minutes after leaving downtown Anchorage headed north, we are in the forest primeval. The Yukon Denali's navigation system is no use up here: Alaska's roads aren't in GM's satellite database.

When the highway narrows to two lanes, I start to appreciate the Denali. The high-riding truck with 380 horses makes me feel safe and confident when I pass the local, unhurried drivers, or worse, the stacked-up RVs crawling up mountain roads. Those horses also translate into towing power -- the Yukon can pull up to 7,700 pounds, which is what you'd need for a 32-foot trailer.

As we climb the Alaska Range, clouds move in and the temperature falls from 70 to the low 50s. We stop for gas and drop $62 filling three-fourths of the 26-gallon tank. A light rain is falling as we pass the entrance to Denali National Park and, near the turnoff to Earthsong Lodge, we spot our first moose -- a pair meandering across the road. We are above the tree line and tundra surrounds us. At the end of the day's 300-mile marathon, the seats still feel comfortable, and rough roads haven't translated into aches and pains.

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Denali Highway

Refer to Alaska's highways by their route numbers and you'll get a blank stare. Natives use road names. Destiny seems to be leading us to the Denali Highway, which stretches 133 miles from Denali National Park east to the Richardson Highway, not far from our next destination at Copper Center. Alaska's well-traveled highways are paved, but most roads are gravel. The unpaved Denali Highway has just reopened within the past week or two (it's closed from October to mid May) and is a tour de force of ever-changing scenery -- icy lakes, Scottish-bleak sods and snow-capped mountains. We even spot a wolverine. ("Go blue!" shouts Emily, a Michigan alum, as she grabs her camera.)

The highway has recently been regraded. Still, a passing semi could catapult a rock through a windshield, and tires are vulnerable to the unpredictable surface. What better test for our all-wheel-drive truck?

I am going 45 or 50, and as the wheels skate over washboard ruts and I steer to avoid potholes, the truck skids precariously toward the edge of the road. This is when the Denali's other features come to the rescue. It has a wider stance than previous models and the brakes are bigger. The truck isn't equipped for serious off-roading, but the all-wheel drive automatically adjusts power delivery to the front and rear wheels. Stability control can kick in and brake wheels that are spinning too fast, which helps to avoid skids. If all else fails, the side-curtain airbags will inflate in a rollover.

We skirt the edge of the Clearwater Mountains and then climb to Maclaren Summit. Snow still covers the ground up here, but snowmobile tracks mar the pristine white surface. Near Copper Center, the Alaskan pipeline is visible from some stretches of the road. It carries 825,000 barrels of oil a day from Prudhoe Bay to Valdez, where tankers deliver it to distant ports.

Running on empty

From Copper Center, it's 200 miles back to Anchorage on the Glenn Highway. Again, signs of civilization soon disappear. Distances between gas stations expand, we encounter the Chugach Mountains, and then the low-fuel light clicks on. We pass towns that look promising on the map, but when we arrive they consist of a couple of houses and maybe a small airfield. We contemplate whether OnStar's emergency service could deliver gas out here if we stalled (it can). Fortunately, we find a station with ancient pumps in Chickaloon.

Inside the station is a mini mart run by a burly guy with a flowing gray beard and an Iditarod sled-race hat. I ask how business has been. He reports a drop-off in traffic this year and blames higher gas prices. A disproportionate number of Alaskans -- and tourists -- drive trucks, large SUVs and RVs and travel long distances, so they're likely to be more sensitive to price spikes.

On the other hand, buyers of expensive trucks like the Yukon Denali are less bothered by higher gas prices, says Jeff Schuster, of J.D. Power and Associates automotive researchers. He predicts no real change in buying habits until gasoline permanently costs $3.50 to $4 a gallon. But GM is hedging its bets. The company recently offered a one-year gas subsidy to buyers of new Tahoes and Yukons in California, where gas prices are higher than in any other state except Hawaii.

A market will always exist -- not just in Alaska but also in suburbs and exurbs throughout the U.S. -- for an SUV that's more than a fashion statement. Sales in the large-SUV category have been falling, but automakers expect to sell 700,000 annually in the near future. With the Yukon Denali and its brethren, GM has earned niche supremacy with a smart, utilitarian design that also improves fuel economy over the old models. Big SUVs from Ford, Dodge, Nissan and Toyota are not selling as well. Part of the reason is that the Denali's competitors are a bit long in the tooth, and buyers are reluctant to invest in the older designs, no matter how many cash rebates the carmakers throw at them (the Ford Expedition will receive a makeover this fall). See our slideshow for more on how the competition stacks up against GM.

As gasoline prices climb and environmental fallout grows, GM and the other automakers know that they need to take steps to improve fuel economy and promote alternative, renewable fuels. GM's 5.3-liter engine, available on some models (but not the Denali), features "active fuel management," which shuts down four of the eight cylinders when you're cruising at highway speeds. Some Yukon, Tahoe and Suburban models are flex-fuel vehicles, meaning you can fill up with E85 ethanol, which is a mix of ethanol and gasoline. And late next year, GM plans to introduce gas-electric hybrid Tahoe, Yukon and Escalade models, which will likely sell for a premium.

Even GMC, which has been all trucks all the time, is introducing a crossover SUV later this year. Called the Acadia, it's an acknowledgment that the large-SUV segment is shrinking and car-based crossovers, which get better gas mileage, are in demand.

Next: Follow Mark Solheim as he narrates his drive across the Last Frontier.

Plus: Find out how GM stacks up against the large-SUV competition.