Bloomberg News

GM Lowers Malibu Prices to Compete With Camry in Searches

February 08, 2013

General Motors Co. (GM:US), in an effort to make its Chevrolet Malibu more appealing to online car shoppers, lowered the car’s price by hundreds of dollars to compete with better-selling midsize sedans.

GM, based in Detroit, lowered the prices of Malibu by as much as $770 as the automaker seeks to improve its results in a segment that includes five of the 20 most popular vehicles in the U.S. The average price was reduced by about $450, Russ Clark, Malibu’s marketing director, said yesterday in an interview on the sidelines of the Chicago Auto Show.

“We did it in order to try to generate more potential traffic on the car both on the websites as well as dealers but I can’t tell you that January itself was a big change just because of that,” he said. “It recognizes the competitiveness of the segment and ensures that we remain on the shopping list.”

The entry-level Malibu’s starting price was reduced by $345 to $21,995, which excludes an $810 freight charge, GM said in an e-mail. The Toyota Camry, the top-selling car in the U.S., begins at $22,235 before a $795 handling fee, according to Toyota Motor Corp.’s website. Malibu U.S. sales rose 7.8 percent in January while the Camry increased 13 percent, according to researcher Autodata Corp.

Speedy Refresh

GM engineers and designers also are working on speedy design changes to the Malibu, including making the back seat feel roomier, two people familiar with the effort have said. Those changes should be introduced in third quarter, said the people, who asked not to be identified revealing private plans.

The battle for midsize car sales in the U.S. is one of the bigger fronts in the three-way fight among GM, Toyota and Volkswagen AG for global sales leadership.

Toyota, helped by a strong recovery following production problems in 2011 tied to natural disasters, overtook GM last year to again become the best-selling automaker in the world. GM finished No. 2, outselling VW by more than 130,000 deliveries. The Wolfsburg, Germany-based automaker aims to become the world’s biggest by 2018.

GM rose 0.4 percent to $28.57 today in New York. The shares slipped 0.9 percent so far this year, while the Standard & Poor’s 500 Index gained 6.4 percent. Last year, GM rose 42 percent, more than triple the S&P’s 13 percent increase.

The current Malibu was introduced over several months in 2012, beginning with the pricier Eco edition followed by higher- volume versions in October. U.S. sales declined 6.1 percent in the fourth quarter compared to the same period in 2011, according to data compiled by Autodata. Malibu deliveries for the year rose 3 percent to 210,951.

Competitive Segment

Competition in the midsize segment grew even hotter last year as revamped offerings from Chevy and Toyota faced new editions from Ford Motor Co. (F:US), Honda Motor Co., and Nissan Motor Co. Toyota sold 404,886 of its Camry midsize sedan. Malibu also trailed Honda’s Accord, Nissan’s Altima, Ford’s Fusion and Hyundai Motor Co.’s Sonata.

While VW’s Passat also lags behind those leaders, U.S. sales last year of the Chattanooga, Tennessee-made model rose fivefold to 117,023.

The Malibu has received middling reviews. The redesigned car was “good, but not great at any single thing,” Lawrence Ulrich wrote in January in the New York Times.

“I expected this revamped Chevy to bring something more to the office party, some claim to specialness -- in styling, fuel economy, technology, anything,” he wrote. “Instead, the Malibu does only what’s expected, and it loses points on rear-seat comfort. The sedan lands smack in the middle of its class.”

Price Cuts

For January, GM cut the starting prices on 2013 Malibu sedans by $300 for the 2LT and Eco models, $345 on the entry- level LS and as much as $770 for the LT version, the company said in an e-mailed statement. Malibu’s sales gain for the month was short of the industry’s 14 percent increase.

“We didn’t do it from the standpoint of that it’s going to make major shifts immediately or anything like that, because the car had been gaining momentum,” said Clark, the GM executive. “We just wanted to make sure that as that momentum continues to build” that the car is competitive on the shopping websites.

Some car-shopping sites organize vehicles by starting price, he said.

“It depends on the sites,” he said. “Some of them, that’s all the customer sees is the starting at price before they get into too much detail. So we wanted to make sure we were in there.”

To contact the reporter on this story: Tim Higgins in Chicago at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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