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Meanwhile, Chevy Is Sulking In The Garage


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MEANWHILE, CHEVY IS SULKING IN THE GARAGE

Gordon Stewart gnashes his teeth every time he sees the commercials, and lately he has been seeing them a lot. The offending ads, pushing the Saturn, may be the warmest and fuzziest car spots ever made. But what bugs Stewart is not so much what the ads say; it's what they leave unsaid. "Saturn advertising creates an image of a special vehicle built in a special place by special people," gripes the Michigan Chevrolet dealer. "Where does that put the rest of what GM builds?"

Call it a bad case of sibling rivalry. While wunderkind Saturn Corp. basks in the limelight with its hot-selling new cars, Chevrolet has been shunted aside. It has held on to nearly one-quarter of the growing truck market. But the division, which two decades ago was selling one-fifth of all cars in the U.S., today has only a 12.1% share. The former powerhouse's identity as General Motors Corp.'s entry-level division has blurred.

Many Chevy dealers are convinced that Saturn is stealing their customers. They say the aging, hard-to-sell cars and trucks clogging their showrooms are the direct result of GM's decision to bestow billions of dollars in development largess on Saturn during the past half-dozen years. "All that money that went to Saturn and other GM divisions left Chevrolet naked," says Lou Bachrodt, a Pompano Beach (Fla.) Chevy dealer.

RUSTING AWAY? Now, as rival domestic carmakers are regaining ground from the Japanese, Chevy is not even along for the ride. Ford Div. and Chrysler Corp. boosted sales of cars and light trucks this year by 15% and 9.6%, respectively, but Chevy sales are off 4.7%. The erosion of Chevrolet is the "most horrendous marketing and merchandising blunder of the decade," says Maryann Keller, auto analyst at Furman Selz Inc. Jim C. Perkins, who left Toyota Motor Corp. in 1989 to head the ailing Chevrolet Motor Div., declined to be interviewed.

With Chevy still kicking in nearly half of GM's 2.1 million annual vehicle sales, the parent company can hardly afford to let its largest division rust away. But fixing it up will be quite a chore. "Chevrolet is probably the most difficult challenge General Motors has," says Christopher W. Cedergren, a consultant at AutoPacific Group Inc. Considering the auto behemoth's many problems, epitomized by last year's $7.5 billion loss in North America, that's saying something.

What Chevrolet needs is some fresh models--and quickly. New cars and trucks are in the pipeline, but until they trickle out over the next few years, aggressive price-cutting seems to be Chevy's best bet for moving the metal. Since June, it has been offering $1,500 cash back to buyers of the Lumina. That compares with $75020back on most version of Ford's faster-selling Taurus. Perkins and his team must also hone a sharper marketing focus. Critics say the division is trying to be all things to all consumers. One solution: trimming some models from a lineup that now runs all the way from $6,999 subcompacts to $18,155 trucks and $33,635 Corvettes.

NICHE EROSION. Saturn, of course, isn't the only cause of Chevy's woes. Ford Motor Co. has kept Chevy from gaining the dominance in trucks that Perkins has promised. The weak economy is hitting Chevy's cost-conscious customers especially hard. Efforts to curtail unprofitable deals with car-rental companies are trimming its sales, too. And in a market crowded with brands and models, Chevy's niche is becoming more difficult than ever to distinguish.

Even without Saturn, cash-strapped GM would have had less capital to funnel into Chevrolet. Tight money means delays in introducing badly needed new or redesigned models. GM recently had to push back a replacemnt for the 11-year-old Cavalier until 1995, for instance. Chevy is stuck with what many critics call uninspiring cars: the warmed-over Caprice sedan, which Keller calls the "ugliest large car built"; the peculiar-looking APV minivan with its Dustbuster snout; the hard-riding Blazer sport-utility vehicle, and the lackluster Lumina.

Chevy's problems are apt to get worse before they get better. Saturn is gearing up to build more cars next year. Other auto makers are launching vehicles that will create stiff competition as well. Chrysler's new LH midsize cars aren't going to help sales of Chevy's Lumina, and Ford's spiffed-up Ranger small pickup and new Tempo are going to give their Chevy countertparts a run for their money. Chevy dealers are pinning their hopes on redesigns: the 1993 Camaro and GEO Prizm, the 1994 Blazer, and a reintroduction of the Monte Carlo. Until then, Chevy will probably go on feeling like the poor relation in the GM family.Kathleen Kervin in Detroit


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