GM Plans a New Lineup of Vehicles

[mgescuro]

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GM Plans a New Lineup of Vehicles

Auto Maker Is Set to Unleash Seven-Passenger Wagons; Tweaking SUV Gas Mileage
By JOSEPH B. WHITE
Staff Reporter of THE WALL STREET JOURNAL
June 7, 2005; Page D1

Under pressure to revive sales, General Motors Corp. is about to unleash an important element of its turnaround effort: A slew of new, better-looking vehicles.

But in a market where the big players are launching new models almost every month, Chief Executive Rick Wagoner and his product czar, Vice Chairman Robert Lutz, face a stiff challenge to persuade investors that the cars, trucks and crossovers GM has coming can reverse a trend that has taken GM's U.S. market share to 26% today from 47% in 1976.

Although many of its new models won't hit showrooms for months, GM is eager to build some buzz. As its annual shareholders' meeting opens today, GM is under pressure to discuss how it plans to recover from a $1.3 billion first-quarter loss in North America. Mr. Wagoner is expected to highlight the new-model blitz as part of a broader effort to reassure investors.

Among the new GM models preparing to launch in the next 30 months: Replacements for the current Chevrolet Tahoe, GMC Yukon and Cadillac Escalade large sport-utility vehicles. The replacements will be an early test of Mr. Lutz's new strategy: Sales of outgoing models -- including the three-vehicle Escalade family -- have tumbled more than 25% in the first five months of this year from a year earlier. Some analysts have blamed that decline on rising gas prices and a shift in consumer tastes away from big SUVs built on truck frames. GM executives have argued that a significant cause of the decline is that the current Chevrolet and GMC models are old.

The new models will get slightly better mileage, though, averaging around 20.7 miles a gallon in combined city and highway driving, up from a segment-leading 19.8 miles a gallon today.

The auto maker also plans to roll out a new lineup of seven-passenger crossover wagons in an effort to be more competitive with rivals such as the Honda Pilot, Ford Freestyle or Chrysler Pacifica, as well as an almost-total revamp of the Saturn showroom, built around sportier new sedans derived from GM's European Opel models and new crossover models.

In contrast to several of the vehicles GM launched in the past year, many models in the coming crop replace weak or aging entries in high-volume -- and in the case of large SUVs, high-profit -- segments. Executives are betting the new vehicles will start to dispel GM's reputation for dull design.

As far as consumers are concerned, the new vehicles are the most visible signs of GM's effort to pull itself out of its current tailspin, which has resulted in its debt being downgraded to junk status. Investor Kirk Kerkorian, whose bid to buy another 28 million GM shares at $31 a share is scheduled to expire today, also is placing a big bet on the success of GM's new vehicle strategy.

GM has disclosed or hinted at various elements of its product plan piecemeal over the past several months. For example, last year at auto shows, the company displayed a concept vehicle called the Buick Centieme, designed to demonstrate the design direction for a future generation of midsize crossover wagons that would replace vehicles such as the current Buick Rendezvous and Pontiac Aztek in the next two years. GM has said it will launch a total of 14 new or redesigned crossovers of various sizes by 2009.

To spur sales, the auto maker also recently took the unusual step of offering its employee discount to the general public. (See related article.)

It isn't the first time GM has promoted a broad array of new models all at once. The company followed the same strategy in the 1990s, following new-product droughts that precipitated profit setbacks then. So far, GM hasn't been able to reverse the long-term, downward trend in U.S. market share.

One reason: No matter how many new models GM has, rivals have more. GM, for example, has lagged behind Japanese rivals Toyota Motor Corp. and Honda Motor Co. in exploiting the fast-growing demand for five- and seven-passenger midsize crossover wagons. Honda's Pilot crossover has outsold GM's rival Buick Rendezvous by 52,227 vehicles to 27,114 vehicles this year.

GM also has largely missed out on the revival of rear-wheel-drive, muscular American cars led by the Chrysler 300C and Ford Motor Co.'s new Mustang, which sold 19,721 cars in May, compared with sales of just 1,093 for GM's Australian-made muscle car, the Pontiac GTO.

...

Mr. Lutz has attacked a wide array of GM practices that tended to push GM's designs in conservative directions. New vehicles that have shown some of his influence have tended to have sides that tilt inward, toward the center of the roofline. The object is to avoid a car that looks like a cinderblock on roller skates.

Mr. Lutz also has pushed for narrower gaps between body panels and has demanded better-quality buttons, chrome and wood grain on dashboards.

To improve the mileage in some of its big SUVs, GM has said it will use technology such as "displacement on demand," which shuts down two or four cylinders of a truck's V-8 engine during highway driving, to improve fuel economy.

In 2007, GM has said it will start offering hybrid gas-electric drive systems on its large SUVs that will boost fuel economy 25%.

[gmhashope]

Good to hear all around. Hopefully these new designs will not be dull and get rid of GM's dull reputation. I'm guessing most/some of these vehicles will have 5 or 6 speed trani. to make the media happy.

[mgescuro]

I'm just glad to see Lutz's product line and to be able to read about what Lutz is doing or has done at GM in teh short amount of time he's been there.

[Canuck]

We need to hold our breath and hope Lutz has some magic in store for us.
If these new products 'lack the got to have it' then GM will continue to lose market share.

[DanCBJMS1988]

Well, we all can remember what Lutz did for Chrysler - aka the Viper. Maybe that "Chrysler touch" will get rubbed deeply into GM.

[desmo9]

"Mr. Lutz has attacked a wide array of GM practices that tended to push GM's designs in conservative directions. The object is to avoid a car that looks like a cinderblock on roller skates."

Ya gotta be joking, right? Lutz, the anti-conservative? What the heck is -- take your pick -- the new Impala, for instance? And who has called the CTS conservative? That's a car done without Lutz's input, which he tried to dumb down immediately upon arrival.

As for "avoiding cinderblocks on rollerskates" ? I'm sure Chrysler ... and Ford ... will take that as a compliment, all the way to the bank. And as for that "Chrysler touch" someone mentioned? Yeah, those LH cars sure set the sales charts on fire. Those must be the revolutionary cars that "have sides that tilt inward, toward the center of the roofline." Whoooee.

"GM ... has lagged behind Japanese rivals Toyota Motor Corp. and Honda Motor Co. in exploiting the fast-growing demand for five- and seven-passenger midsize crossover wagons (and) has largely missed out on the revival of rear-wheel-drive, muscular American cars led by the Chrysler 300C and Ford Motor Co.'s new Mustang" .... that's all the proof you need that GM's "czar" is incompetent.

[IAMCANADIAN]

GM, for example, has lagged behind Japanese rivals Toyota Motor Corp. and Honda Motor Co. in exploiting the fast-growing demand for five- and seven-passenger midsize crossover wagons.

Excuse me and those CSV's are worse than those ugly ass Odysseys and Siennas???

(and) has largely missed out on the revival of rear-wheel-drive, muscular American cars led by the Chrysler 300C and Ford Motor Co.'s new Mustang"

Hello, look at the 300, yah it sells well but unless you get the hemi its a slug plus it's an ugly ass car, plus most people don't give a **************** whether they have FWD or RWD, come on, In most cases people prefer FWD because it's better in rain or snow and provides more interior room, yes RWD is considered sportier but they do offer RWD cars like the CTS, thats a 300 competitor right there, GM will bring out some RWD cars soon and they will probably beat the **************** out of the 300. Mr. Lutz, I'll always be a GM owner no matter what, but I might reconsider if you rename the Grand Prix, G8, Grand Prix plus Monte Carlo has history in NASCAR, and a good reputation of being great performing muscle cars. Although they are great cars right now, RWD versions of these would be awesome, just like the G-Body GP and MC's of the 80's those are hot looking muscle machines, now cars like that would attract young and older people

[SmartOne498]

I am so happy I can't wait to see all the new vehicles!!!!!

[drew770]

Why is the Wall Street Journal comparing the GTO to the 300C and the Mustang? I really liked the article but some of the ideals in it was on the shady side of the fence.
I thought the Pilot's competitors were the Explorer, Jeep Grand, and the Trailblazer not the Rendezvous. The last time I looked all 3 were outselling the Pilot.

[acascianelli]

GM needs to scrap almost all of its current car platforms and come up with more AWD/RWD platforms. GM also needs to get more 5+ speed auto's and manuals in more models.