Chevy Hopes Bigger is Better in the Compact Market

Posted by: David Welch on September 15, 2008

cruze2.jpg

We’ve heard the domestic auto makers tell us that they’re taking square aim at Japanese cars before. Often to no avail. This time, General Motors’ Chevrolet division is trying to reestablish itself in the compact market with the new Chevrolet Cruze, which goes on sale in Europe in March of next year and in the U.S. in April 2010. The company showed the car to the media in Detroit at a media event marketing its 100th anniversary.

Styling is subjective. But the Cruze is tasteful enough and certainly looks more modern than the very ‘90s-looking Cobalt that it will replace. It bears a slight resemblance to the Honda Accord family sedan. GM showed photos of the interior, which has a high-tech look to it. Ed Welburn, the company’s vice president of design, says the car’s interior will use some rich new materials. He said that it will be first rate. Welburn is pictured above with the car.

The question is, can GM get the kind of pricing that it wants? Chevrolet general manager Ed Peper didn’t announce the new prices, but indicated that the car will move upscale from where the Chevrolet Cobalt sits. A well-equipped Cobalt starts around $17,000. Cheaper trim levels start at $15,000.

In this case, Chevy has a pretty good story. Peper said the car will be bigger than the current Honda Civic and Toyota Corolla. With the car’s new 1.4-liter turbo engine, the fuel economy will be better than 40 miles per gallon. That’s also best in class, he says. Those are good bragging points. Bigger and more efficient.

That should help. It’s still a tall order to expect a domestic carmaker to get the kind of sales volume and pricing that Honda and Toyota can fetch. But then, GM has boosted prices of its new Malibu sedan pretty nicely. So the Cruze may have some momentum going in. The only complaint so far is that GM should be selling this in the U.S. next year when it hits showrooms in Europe. Chevy needs a quick follow-up to the Malibu’s success. And 2010 is too long to wait.

Reader Comments

Snoz

September 16, 2008 11:16 AM

Will the Cruze and Cobalt be successful? Let's examine GM's track records. Welburn, Lutz, and Wagoner have diluted all the GM brands except the Hummer which was DOA and now on the auction block. Under their leadership Cadillac's perceived value is behind Mercedes, Lexus, and even Infinity. What was once GM's luxury brand is now ranked slightly above a Toyota Avalon or Nissan Maxima. Even a G35/37 has more cache than any Caddy. Cadillac can't even park next to a BMW 7 serie without embrassment. Once upon at time, Chevy represented cars for the middleclass but currently its design and quality is so low that it is now reserved for the strugglingclass. Is it any wonder that Chevy resorted to building trucks to balance its ledgers. To save the demise of Chevy and restore confidence in the brand, GM must and should had build Cadillac quality into the Chevy brand while elevating Cadillac quality to that of Mercedes or Toyota. Not a difficult technology to deploy on any IC engine, direct injection alone will not make the Cruze competitive or any other GM car. Other auto makers have already deployed direct injection technology albeit at the higher end models. The availability of economical ceramic-Piezo injectors will reduce cost significantly to allow mass deployment with the result that direct injection will be commonly taken for granted as another form of fuel injection. The high price of crude has shifted the paradigms of the auto industry to produce more energy efficient cars. Consumers will never go back to the days of gas guzzlers. For small or large cars, efficiency and high mpg are the new metrics for success. Unfortunately, GM's history has too many disaster stories of building small cars: Corvair, Vega, Prism(via Suzuki), Aveo(via Daewoo), etc, etc. It is perhaps unfair that the Cruze and Cobalt will have the envious task of overcoming GM's touch of death under the leadership of Welburn,Lutz, and Wagoner. If there is any doubt as to their success, readers and shareholders should remember that this same leadership team brought us the Pontiac Aztek.

Paul Ries

September 24, 2008 1:37 PM

Another lets bash America blog. Don't you get tired of kicking U.S. automakers?
Mercedes good quality, what a joke.
Check over the last 10 years and you will find Buick ranked more highly than Mercedes. Consumer reports, J.D. Powers any of them.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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