"GM in America is a Truck and SUV Company" - Shaking the Gas Guzzler Image

[Ming]

"GM in America Is a Truck and SUV Company" - Shaking the Gas Guzzler Image
Editorial by Ming
www.gminsidenews.com
2/14/2006

Recently I had a conversation with a Honda loyalist who told me "GM is a truck and SUV company. If I want to buy a big SUV or a diesel truck, maybe I'll consider them.". This coming from a fan of the company that just won Truck of the Year with its Ridgeline. But image is everything, and Toyohonda seem to have a monopoly on the Green Image in the industry.

How is it that all of that Cobalt, Impala, and Lucerne advertising can't seem to change GM's image as the big bad company selling mostly gas-guzzling SUVs and trucks? How is it that the release of the HHR, Solstice and ION don't merit praise and a change of attitude towards what the General offers on the fuel efficiency front?

Well don't get me wrong, because I certainly don't blame it all on the press. Most of the Super Bowl ads from GM featured SUVs as GM's newest stars, while Toyota took a green approach as if to make the point even more obvious.

Bob Lutz recently posted his commentary "Flexible Pickup, FlexFuel" in the Fastlane GM corporate blog. GM has chosen what one poster called its "Consumption Reduction" strategy. That is, the idea that if GM can get SUV miles per gallon up, it can save more gas than a whole fleet of Priuses might. The blog commentary explains that GM is "extolling the virtues of ethanol" and flexible fuel in its vehicles. While these ideas have merit and truth to them, they don't win the image battle.

If GM wants to go with Ethanol, then it will win far more image points by going one step further and making a subcompact engine that can run on it available here in the U.S., or make its VUE Hybrid capable of running on E85 as well. An effort like that could help GM take that leap from "trying to keep up with Toyota" to passing or at least matching them - in a single bound.

Aside from the VUE and the less talked about Malibu hybrid, GM focuses most of its fuel savings on its large SUVs. They say this is to help save the maximum amount of fuel in the end in a product that Americans want to buy. I don't think its any coincidence, however, that GM's largest trucks and SUVs are also some of its most profitable vehicles.

They're also mighty expensive. So if you want to save gas money, buy a 40 thousand dollar Suburban with cylinder deactivation technology? Certainly GM's "Big truck flex fuel, DOD and hybrid consumption reduction" strategy isn't targeted towards penny pinchers. Instead, it seems a way to stave off negative press by being able to point out, "Hey, our SUVs aren't as thristy as they used to be!"

But they're still expensive. And they're still relatively thirsty, especially considering the new pack of subcompact cars coming from Toyohondassan that get up to 40mpg with regular gas engines. All that, while the Aveo appears to be launching with basically the same fuel inefficient engine design that was used in the late 1990's Daewoo Lanos, and the Cobalt's fuel economy still leaves something to be desired.

A 30mpg wagon-like vehicle such as the Malibu Maxx seems to make a whole lot of sense in this environment of high and unpredictable gas prices, but according to rumor the Maxx is on the chopping block --- which isn't surprising considering how few advertisements I've seen for it. The HHR will stay, and is a great little wagon, but strangely also gets only 30 miles per gallon at best, despite a much smaller engine.

To be sure, GM should be praised for its excellent introduction of the VUE hybrid, which seems to be winning some good press. But Saturn is still that brand strangely disconnected from the rest of the GM brand family, where one can't use GM Card points or expect other special discounts unrelated to rebates like the GM Supplier discount. Its hard to say that Saturn looking green will rub off on GM as a company and its other brands.

This leaves GM's mainstream brands with its big truck hybrids & SUVs opening up to a huge gap between utility, price and fuel savings with the upcoming Chevrolet Malibu hybrid, which as far as I know will only be offered as the short wheelbase sedan. That and the E85 flex fuel Impala, which might be more of a factor if it was coupled with a little BAS hybrid help.

Where is the mainstream GM brand hybrid or fuel efficient vehicle for someone who wants a little more utility than a compact sedan can offer, without making the leap to a massive SUV and big loan payments?

Like I wrote before regarding wagons, GM pushes potential customers like me away by ignoring market segments that brands like Toyota, Honda, Mazda and others seem to understand, or at least understand by extension of designing vehicles for non-U.S. markets and having the models they sell overseas on hand to sell here. Not all of us need a whopping V8 powered truck with seating for 8 and a whopping price tag to go along with it. Sometimes a fuel efficient wagon or crossover is all we need.

I recall hearing one of the talking heads on a morning news show come out and say "It seems all GM wants to do is build more trucks and SUVs. Why don't they just save us all the drama and just start doing only that?"

Why go through the charade of introducing the 2004 Malibu when it wasn't designed to be best in class at the time, and is quickly being eclipsed by other offerings? Is GM really an SUV company first, like the Honda loyalist suggested? Should they just build SUVs, trucks, and maybe a few RWD performance cars and call it a day? Is the market success of the Aveo a result of GM's attempt to compete in the small car market, or was it just a way to raise CAFE numbers and grab a few sales?

Lets see GM do more along the VUE Greenline angle with an Equinox hybrid, building a 40mpg ethanol hybrid, and investing more in its gasoline 4-cylinder engines to get a much needed dose of R&D money to improve fuel efficiency in the Aveo and Delta-based cars. Lets see a best in class mid-size car that shocks the critics. Or how about that Saab BioPower wagon? More talk of "mild hybrid" trucks and flex fuel in large pickups will barely make a dent in the image battle with Toyohonda.

GM has to prove to the public through its actions and product that it is not dependent on SUVs and trucks for its survival --- that it is not a dinosaur that cannot adapt; a beast floundering in a tar pit waiting to be put out of its misery with the next oil shock or thrust of product from a Japanese rival. Only then will we stop seeing the articles that tie GM to the image of a massive, thirsty SUV.

[wolverine]

Based on the fact that GM is investing $163 million in its Pontiac Truck assembly plant while allowing its Orion car assembly plant, with its disastrous paint shop, to wither on the vine and die it appears that there is a lot of truth to the idea that GM sees itself as a truck and SUV company first. Although it is nice to see the expansion of the Grand River plant it must be kept in mind that it produces the Cadillac which is not exactly a model of fuel efficiency.

[Mikkoo]

Great editorial Ming. You really nailed the reasons that GM is thought to be just the truck and SUV company.

[56 Starchief]

excellent point. i like the little story too.

[Arizona Slim]

The biggest disappointment to me has to be the Aveo. A tiny subcompact with a manual tranny, and the best they can do is 26/35? GM has to stop selling its cars on price alone. I have a feeling the Aveo is about to get its ass handed to it by the Fit and the Versa.

[VibenPontiac]

E85 is a joke. The supply is simply not there. While it may be available in the Midwest there is only one place in the entire state of GA you can get it...and it's a private facility with no public access. Here's a sampling of the Southeast:

FL - 2 locations (no public access on either)
TN - 2 locations (1 with no public access)
NC - 6 locations
AL - None
MS - 1 (no public access)
VA - 4 (3 with no public access)
KY - 2
WV - 2 (1 with no public access)
AK - None
LA - None
TX - 5 (4 with no public access)

The lone bright spot seems to be SC which as 27 stations with E85. And the Southeast has a boat load of trucks - GM's biggest segment of E85 vehicles.

[mbukukanyau]

The biggest disappointment to me has to be the Aveo. A tiny subcompact with a manual tranny, and the best they can do is 26/35? GM has to stop selling its cars on price alone. I have a feeling the Aveo is about to get its ass handed to it by the Fit and the Versa.

I could not agree more. GM should have invested in a small 1.4 Liter all Aluminum Ecotec for this little beast.
What the Hell do they smoke at Detroit?
How can a Corolla be getting better mileage than an Aveo?

[MNdudeswitz]

Because thats how the Toyota and Honda got here by perfecting the Small car.......they have it down right so they really don't have to take much effort other than appearance and features changes........it is the opposite for GM and its been hurting them ever since the imports came to the US. Detroit has always thought big first and small last.........do you really expect them to perfect the small car in only a couple years and compete with the imports when the imports have been perfecting it since the late 70's early 80's.

[Hotspur]

How is it that all of that Cobalt, Impala, and Lucerne advertising can't seem to change GM's image as the big bad company selling mostly gas-guzzling SUVs and trucks? How is it that the release of the HHR, Solstice and ION don't merit praise and a change of attitude towards what the General offers on the fuel efficiency front?... ....The HHR...strangely also gets only 30 miles per gallon at best, despite a much smaller engine.

You answered your own question. Advertising can't change the fact that the HHR and ION are simply mediocre products. Both already need a substantial redesign.

[camaro_freak]

fantastic article! good read

send it to Bob and Co, maybe they'll actually read it

[mbukukanyau]

You answered your own question. Advertising can't change the fact that the HHR and ION are simply mediocre products. Both already need a substantial redesign.

HHR needs an interior upgrade, better brakes, relocation of window switches and a smaller base Engine.
Cobalt, needs a total re-design

[quickrick]

Thanks, Ming. Right on target as usual. GM's biggest problem - the very problem that has them in this mess that it took 30+ years to create - is their utter fixation on short term profits at any cost. GM's way always seems to be,"We'll show you what you want because that's what our huge infrastructure is building right now. You know you want it and even if you don't, here's 5 grand in cash on the hood to convince you!" How cynical and sad - it's the tail trying to wag the dog that won't hunt. Toyota took a much longer view and focused on the customer by listening to their wants and needs first and responded to them by building what people actually did and do want. Does that approach make too much sense to be seen down at the tubes?

[Raysz71]

Some things to concider:

1. The truck market is the last market that the US maintains the lead.

2. Trucks outsell cars.
The number 1 and 2 selling vehicles are the F150 and the Silverado

3. GM does not force us to buy trucks. Last I checked no one says that we have to buy a truck and not a car. This is done by our own choosing.

4. I would hope that GM invested in the truck line to stay ahead of the ToyoHondas.

5. Ethanol is the most viable option to to reduce oil imports. Gm leads in the the availability of Flex fuel vehicles.

6. Most hybrids will not save the buyer money, the penny pincher argument does not work. Its for bragging rights about not burning gas and helping the whole imported oil argument. However, a Flex fuel Impala, Silverado and Suburban/Tahoe uses less gas than a prius in a year. Granted, It replaces it with E85, but that is made here. Personally, I would rather make the Farmers rich than the oil companies.

[MNdudeswitz]

I doubt they will be re-designing the cobalt anytime soon

[joey]

GM needs more small cars and must improve MPG numbers. Ethanol engines get poorer MPG's. Less BTU's in Ethanol then straight gasoline. Ethanol costs over $110/barrel. Is in demand already as a gas additive. So E85 will cost more then regular gas. Even diesel fuel is pricier then premium gas in many areas. So is there any saving for the consumer if you get 10% better fuel mileage for a $3000 diesel engine option?

All GM has to offer in small cars is a cheap Korean Chevy. Why aren't more of Opel models offered here? Do we need to wait 3 years for a global GM model to be made available to Saturn?