Detroit Thinks Small: With gas prices going to stay high, this time it's for real

[GMusa]

From www.Motortrend.com

Detroit Thinks Small: With gas prices going to stay high, this time it's for real

By Todd Lassa

Can Detroit make money on compact cars? Since General Motors launched the Chevrolet Corvair in the Autumn of 1959, the answer has been a resounding "no." That may finally change, with GM, Ford Motor Company, and Chrysler LLC facing stricter Corporate Average Fuel Economy standards beginning in 2011 (the same year GM expects last fall's United Auto Workers contract finally to start paying off) and $4-per-gallon gas forcing the issue this year, anyway.

The Detroit Three are ready to make more cars than trucks again -- the market has already dictated that -- and the C-segment (Civic, Corolla, Focus, Golf, etc.) is the next big thing, with more refined, better-equipped models on the way.

Leading off this movement is the 2011 Chevrolet compact. Combine the now-signature Chevrolet horizontally split grille with "fierce-eye" headlamps and a rakish, coupelike four-door roofline, and you've got the replacement for the Cobalt, coming in two years. At GM's annual meeting, Rick Wagoner dropped all kinds of hints about the car, including the likelihood it won't be called "Cobalt," making that car a one-generation model nameplate.

The new-for-2005 Chevy Cobalt was touted as a Honda Civic-killer, yet it barely matched the retrograde 2001-2005 Civic, and was on the trailer a year later when the class-leading 2006 Civic bowed. With the 2011 Chevy compact, GM may finally be learning you have to figure out where Honda will be with its next-generation Civic (also due for replacement in 2011).

The Chevy will have more equipment, benchmark safety, and quality, Wagoner promised and, most important, "nine miles per gallon more than Chevy's entry in this segment today." Add 9 mpg to the current 2.2-liter, five-speed-manual Cobalt, and you get 33-mpg city and/or 42-mpg highway. Who needs a Chevy Volt at twice the price?

If the Chevy manages those EPA estimates for the conventional compact, it comes to 36.5 mpg combined. Sell the Chevy compact in Civic-volume numbers and GM will nail the coming 35-mpg CAFE standard. The plug-in 2011 Chevy Volt, also coming by late 2010, and the post-Cobalt will ride on the new Global Delta platform, shared with the next Opel/Vauxhall/Saturn Astra and Opel/Vauxhall Zafira MPV.

What are Ford and Chrysler doing?

Ford: All-new C2-platform Focus for 2011 converges with the 2010 Mazda3. The European Focus makes its debut slightly after the North American version, but they won't be completely related. European and U.S. Foci will generally share interior style, but the Euro Focus will use better-quality materials, because Ford of Europe can charge much more money -- about $28,000 there based on current exchange rates -- than Ford North America can. Meanwhile, Ford's smaller Aveo-fighter, the Fiesta, comes early in 2010 as an 2011 model in four-door sedan and three-door hatchback body styles.

Chrysler: The compact Dodge Caliber is in for a major change for 2012. A Chrysler/Nissan car -- using the Nissan Versa platform -- targeting the Fiesta and Aveo, and probably based on the Dodge Hornet concept, comes in '10 as a 2011 model. A Chinese Dodge/Chery entry-level car may be ready for 2012 as well.

[Butz]

GM may finally be learning you have to figure out where Honda will be with its next-generation Civic (also due for replacement in 2011).

Yes GM finally realizes that you need to go where the puck is going, not where it was.

This actually did happen with a number of GM products, but GM's current portfolio is a hit and miss.