GM's recovery depends on winning over car buyers

[377Z]

In other news, gas prices are up and truck sales are down...

[377Z]

Originally Posted by prototype66

"One product launch does not a success make," Henderson said
I wish people would stop saying that stupid line. It is SOOOOO over used!I

How about it. Or the shiek new names for stuff, like 'switchgear' for shifter, or 'cylinder case' instead of engine block. Gee, how cool, you say it like they do in Europe.

[ksr]

Originally Posted by pinyon

Not a bad article but is the Cobalt really that bad? It may lack interior refinement but this was just a typical jab. Of course maybe this kind of press is ultimately good. People might look more favorably on the new model if it's executed properly.

No, the Cobalt is not that bad. Not even close. Maybe getting a bit long in the tooth, but it garnered pretty favorable reviews at launch.

I've seen this happen to a lot of GM cars in the press. Good reviews at launch. Three years later, the same car gets trashed with comments like this.

In '92 when Cadillac launched Seville and Eldorado, they were rightly praised. Seville was COTY in numerous publications. "Cadillac is Back!" was the mantra of the rags. Then when Cadillac launched the Seville's next-gen replacement in '98, the comments were written as though it was replacing some dog of a car. When the CTS came out in '02, it was written as though Cadillac hadn't built a decent car in decades and "Cadillac is Back", again. When the new CTS came out last year, the old CTS was written about as though it were some primitive garbage.

The Cobalt's replacement will get the same treatment. Good review at intro. Trashed as "another Cavalier" in a couple of years.

[vcs2600]

"The reason we made no money on small cars is because — hello — nobody wanted them," Lutz said. "At $1.75 and $2.25 (per gallon), everybody was happy with full-size utilities with V-8 engines. Now that's shifting, so the profitability is going to go down on trucks and the profitability on cars is going up."

Typical old style Detroit thinking from Lutzy here.

If "nobody" wanted small cars, why has the Civic and Corolla been outselling almost every GM model for at least a decade? If "everyone" wanted a V8, why is America's #1 family car the four cylinder Toyota Camry?

Having your "car guru" repeat simplistic 1970s-era binary proclamations about small cars is pretty embarrassing. Maybe if Lutz had the intellect to not think in absolutes about this, GM would not have so badly missed the market shift.

[TJ95GAGT]

Originally Posted by 44 mpg by 2010

Thoughtful write-up.

Although, as of 7/17/08, GM does have 4 vehicles MY2009 that are rated 30 mpg(US) combined average with NONE in MY2008. The sad part of the story is that GM has NO vehicles in the US rated above 30 mpg(US) combined average as of this date that I can find.
http://www.fueleconomy.gov/feg/2008b....jsp?year=2008 http://www.fueleconomy.gov/feg/2008b....jsp?year=2009
http://www.fueleconomy.gov/feg/byMPG.htm


Have you ever looked at the fuel economy of the US Saturn Astra 4 door HB? It is rated 27 mpg combined average.
http://www.fueleconomy.gov/feg/2008c...f.jsp?id=25169

It would be interesting to see what the Saturn Astra sales would be in the CURRENT US market ... IF ... it carried the same fuel economy of the UK gasoline cousin at 32 mpg(US) combined cycle. That is the same as the Ford FWD Hybrid Escape/Mariner/Tribute without need of hybridization.
http://www.vcacarfueldata.org.uk/sea...s.asp?id=20268

OR ... the same fuel economy as the 1.4 liter at 38.5 mpg(US) combined cycle. That is getting close to the Civic Hybrid.
http://www.vcacarfueldata.org.uk/sea...s.asp?id=20257

OR ... say, the same fuel economy as the 1.7 liter CDTi 16v turbo diesel at 47 mpg(US) combined cycle. That is better fuel economy than the Prius.
http://www.vcacarfueldata.org.uk/sea...s.asp?id=20267

If the above makes you curious, try searching for GM and Vauxhall vehicles getting 51 mpg(Imperial) [42 mpg(US)] combined cycle and above on this link. I think you will be surprised and either disappointed OR possibly even angry.
http://www.vcacarfueldata.org.uk/sea...lConSearch.asp

As a US consumer, I feel that the Det3 have not offered ME and the US consumer fuel conserving vehicles. And, with NO visible plans from GM for very high mpg offerings before possibly 2010 and more probably 2011. The consumer is left with little hope for help from either GM (or Ford for that matter).

I think that is one of the reasons I am seeing more Sprints and Metros showing up in my area. For those that don't remember, these are high mpg machines from the late 80s and early 90s. I guess these consumers are setting up for the long haul ... to wait for high mpg machines ... regardless who they come from!

This suggests further AND DEEPER depression of automotive sales for 2009 and beyond ... UNTIL the 40mpg(US) combined average and above machines arrive!

This will also further depress resale values ... EXCEPT for high mpg vehicles which will continue to increase even further. An example is '90 vintage CIVICs have more than doubled (possibly tripled) in value over the last 3 years

Management has pilotted this ship into the iceberg. The hull is breached and filling fast! The challenge is whether the captain and those in the pilot house and chart room can make the proper decisions in a timely manner to make port safely and deliver the "goods". Or is it the Valdez ... possibly even the Titanic?

Our thoughts and prayers go with those in the domestic auto industry. We wish them the best.

Unfortunately, at this time the average consumer is struggling for his/her economic survival as well so the level of understanding, patience, and forgiveness may be limited.

Absolutly sad, thats all I can say.

GM will say Americans won't pay for small cars, well when we get offerings of the Aveo, Cobalt, Cavaliers,Metros of course we don't want to pay more than 20k for them unless it's the SS edition for the speed factor. Mini doesn't seem to have any problem selling their small car, we've gotten beyond the initial newness of them and they still sell.

Has GM even tried to offer a small car equipped like they are in Europe in NA? Maybe try that THEN declare Americans do not want small cars, well GM's small cars.

[Hoboken Tim]

One very important thing to keep in mind about European car pricing is VAT ( value added tax) , which is a sales tax which is applied when anything is sold, not just at the retail level. This tax really drives up the price, so it's very hard to compare US retail
price with european retail car prices.

[throwback]

Originally Posted by vcs2600

Typical old style Detroit thinking from Lutzy here.

If "nobody" wanted small cars, why has the Civic and Corolla been outselling almost every GM model for at least a decade? If "everyone" wanted a V8, why is America's #1 family car the four cylinder Toyota Camry?

Having your "car guru" repeat simplistic 1970s-era binary proclamations about small cars is pretty embarrassing. Maybe if Lutz had the intellect to not think in absolutes about this, GM would not have so badly missed the market shift.

I agree completely. It's as if he lives in another world. The man does not like small cars and since he is the product "guru" small cars get pushed to the side. It is mind boggling to me how GM (and Ford) build good small cars in Europe but don't build them to meet US standards. at least Ford has made the move to sell their next generation cars in the USA.

[roteague]

Originally Posted by 44 mpg by 2010

As a US consumer, I feel that the Det3 have not offered ME and the US consumer fuel conserving vehicles. And, with NO visible plans from GM for very high mpg offerings before possibly 2010 and more probably 2011. The consumer is left with little hope for help from either GM (or Ford for that matter).

Well, that is just you. Most people wanted big trucks and SUVs, and that is what the Big3 and Toyota gave them. It is called "give the customer what they want". The market shifted so quickly that everyone was caught off guard, but if the price of oil drops again, the market will shift again.

Personally, I'm thinking about getting a Chrysler Pacifica while I can - the ones I have driven get around 19mpg combined, which is fine with me. I don't want a small car (I used to own an Accord).

[ScottS]

Well, I bought a new G6 to be a daily driver at the 72 hour sale and I'm taking it in for warranty work Friday morning with under 500 miles. It was delivered with a small rip in the leather, the passenger door or dash rattles on anything but the smoothest road and I hear a squeak in the rear suspension on less than ideal roads.

You're not winning me over.

[1487]

Originally Posted by throwback

"The reason we made no money on small cars is because — hello — nobody wanted them," Lutz said. "At $1.75 and $2.25 (per gallon), everybody was happy with full-size utilities with V-8 engines. Now that's shifting, so the profitability is going to go down on trucks and the profitability on cars is going up."

This is a lie! How is it Honda has made record profits year over year for 10 straight years mostly selling cars? The reason GM made no money was because they choose to build the cheapest small cars they could. Then they decided not to update the cars (Cavalier I am talking about you) for like 8 years. Why would anyone buy a Cavalier over a Corolla or a Civic during that period? Hey Bob, Americans will buy the best product available, if we had the Corsa instead of the Aveo GM would make money on small cars. Build it in Mexico to keep the price down. Ohh that's right, in your infinite wisdom GM's small cars don't meet US standards because gas prices where never supposed to go up. I'm tired of the excuses leaders are supposed to have vision, are there no visionaries in GM?

Americans do NOT always buy the best product available. Witness the success of the Camry and Corolla and F150. I love it when people make old civics and corollas out to be great cars. They were reliable cars, not great cars. Learn the difference. In spite of all the Cobalt insults we get around here the cobalt (based on merit) was as good as the Civic and corolla when it debuted in every way except mileage. The corolla has never been good at anything except mileage. Its never been a leader in technology, styling or handling. Its an average car with above average reliability.

While Lutz's comments could have been better his point is that its hard to develop premium small cars in a market where people expect an American branded compact to cost $15k. People will pay $18k for a civic or Mazda3 but the second a cobalt costs that much people balk and start looking for rebates.

[1487]

Originally Posted by throwback

I agree completely. It's as if he lives in another world. The man does not like small cars and since he is the product "guru" small cars get pushed to the side. It is mind boggling to me how GM (and Ford) build good small cars in Europe but don't build them to meet US standards. at least Ford has made the move to sell their next generation cars in the USA.

Did you not rad the part about Euro pricing? GM and Ford build better small cars in Europe because they can charge more. If Chevy could charge $25k for the average cobalt I assure you it would be a better car. EVERY car is built to a price point. This is why the Camry has cheap plastics inside. It would be nice if it had the same interior as the ES350 but they cant deliver that for $20k.

GM sells a European small car in the US. Its called the Astra and its not selling well.

[zeobandit]

"GM's recovery depends on winning over car buyers "

Well....duh!!!

[377Z]

Originally Posted by vcs2600

Typical old style Detroit thinking from Lutzy here.

If "nobody" wanted small cars, why has the Civic and Corolla been outselling almost every GM model for at least a decade? If "everyone" wanted a V8, why is America's #1 family car the four cylinder Toyota Camry?

Having your "car guru" repeat simplistic 1970s-era binary proclamations about small cars is pretty embarrassing. Maybe if Lutz had the intellect to not think in absolutes about this, GM would not have so badly missed the market shift.

Painfully correct.

[SUPERBADD75]

Originally Posted by Maximum Bob

"The reason we made no money on small cars is because — hello — nobody wanted them," Lutz said. "At $1.75 and $2.25 (per gallon), everybody was happy with full-size utilities with V-8 engines. Now that's shifting, so the profitability is going to go down on trucks and the profitability on cars is going up."

so, let me get this straight, nobody wanted the several hundreds of thousands of Corollas, Civics, Camrys, and Accords that were sold in the past couple of decades, people were forced into them? wow, i did not realize.... what a stupid comment by Lutz, of course people wanted small cars, they just didn't want the garbage that GM was throwing out there. offer something that's actually competitive and people will buy it. the Malibu will prove that.

[ChevroletRevived]

This article has some good information not normally seen in articles like this. Like it pointed out how GM has taken measures to become profitable on all types of vehicles and just how much it's going to save. Once these savings go into effect, GM will become a very profitable corporation. Nice dig on the Cobalt though.