LOS ANGELES – General Motors Corp.’s ’08 GMC Yukon fullsize SUV achieves a 25% fuel-economy boost when coupled with the auto maker’s Two Mode hybrid-electric-vehicle system, officials here say.

Making its debut at the 2006 Los Angeles Auto Show this week, the Yukon Hybrid will be one of two ’08 fullsize SUVs to run on GM’s new Two Mode system and is expected to achieve 20/27 mpg city/highway (11.7L and 8.7L/100 km).

Developed jointly with DaimlerChrysler AG and BMW AG, the Two Mode’s hybrid transmission incorporates electric motors in the basic structure of an automatic transmission to create what essentially is an electrically boosted continuously variable transmission.

The Two Mode system purportedly will generate improved fuel economy even during highway driving, which is not a strong point for HEVs currently in production.

The ’08 Yukon Hybrid sports several design changes, including a new hood, front and rear fascias and a sleek GMC grille.

The vehicle will be powered by an aluminum small-block Vortec V-8 mated to a 4-speed automatic transmission. GM does not disclose the engine size, but it likely will be 5.3L.

GM says it redesigned certain vehicle components to offset the increased weight of the Two Mode system, allowing the Yukon Hybrid to tow up to 6,000 lbs. (2,721 kg). The current 5.3L Yukon is capable of towing up to 7,500 lbs (3,175 kg).

The Yukon Hybrid will be in dealer showrooms by fourth-quarter 2007, about the same time the Chevrolet Tahoe Hybrid launches sales. GM has yet to release pricing.

scanderson@wardsauto.com