Rumors & Rumblings: The future of RWD, small cars, compact SUVs-and Pontiac?-at GM

[nadepalma]

Rumors & Rumblings
The future of RWD, small cars, compact SUVs - and Pontiac? - at GM
An inside look at what may be in store for GM
With added commentary by Chevrolet Revived and nadepalma
www.gminsidenews.com
2/5/2008

Any true car enthusiast - regardless of brand or corporate loyalty - will have recognized GM’s resurgence in the past year.

Outstanding products like the new Cadillac CTS, Buick Enclave, and Chevrolet Malibu and others have been very well received among the public and pundits alike. What’s more they are desirable vehicles.

Coming products like the Pontiac G8, Chevrolet Camaro, next-gen Buick LaCrosse, Saab 9-4X, Cadillac CTS Coupe and Chevrolet Volt assure that GM’s hot streak will continue into the next few years.

These new offerings will certainly help cement GM’s ‘new image’ in the market for producing quality cars and offering advanced (and even “green”) technologies.

But all resurgences and public-image campaigns start on the drawing board and in strategy sessions. GM’s commitment to following up this year’s excellent product launch with even more excellent vehicles in the next two demonstrates what good planning can do.

Unfortunately, the recent passage of Energy Independence and Security Act of 2007 in December changes some of those long term goals – and many of us aren’t happy. Rumors have been leaking here and there on just how new CAFE laws will change GM’s game plan and future product cycle.

What’s more, GM’s recent success in markets like Russia, China, India, and Eastern Europe – and “less emphasis” on North America in the coming decade – is also shaking up the product mix.

We’ve already read about GM’s decision to kill the “Ultra” V8 which was slated to replace the Northstar. We’ve also heard speculation of product shifts and vehicle cancellations.

New insider information presents a mixed picture of what’s in the works.

We have learned a few hints at what is coming – and NOT coming – in GM’s playbook through a series of insiders. Though nothing is set in stone, some of this is a confirmation of already leaked info while some is speculative.

It is all, however, open to discussion and interpretation – and hopefully someone at GM is “listening” to GMI Members reactions.

*****

We all understand the importance of China in GM’s long term plans; GM hopes to have significant profits coming from Asia in the coming years.

One new car with a big impact for GM in the region (and possibly in other markets) is the replacement for the Buick Excelle. The current Excelle is an updated and premium-styled version of the Chevy Optra/Lacetti/Nubira. It has sold exceptionally well and GM plans to produce a new generation based on a version of the DeltaII platform. This product could also possibly be joined by a B-segment “premium vehicle” based on the forthcoming Aveo/Corsa’s GammaII platform (still no official word).

But will a Buick/C-segment product come to the US market? There is speculation; a recent article stated that GM had re-trademarked the Skylark name here in the US and in China, adding to the rumor (See Next Buick Excelle to be sold in North America? or Edmunds Inside Line: Buick Skylark for China in 2009).

As of right now there are no official plans to bring the vehicle to North America – yet. If gasoline prices continue to rise – and in light of the recent CAFE development - we could very well see a Skylark/Excelle here. Chances are that the product would be built at one of the two slated DeltaII locations (Lordstown or Ramos Arizpe) and be identically styled as the Chinese version.

From a strategic perspective, this makes sense as there have been some “small-premium” products on the market or coming, including the Audi A3, Mini, Volvo C30, forthcoming Saab 9-1, and even a possible Alfa Romeo ‘Junior’ when the brand arrives in 2010. A “traditional/American” luxury brand with such an offering may work well for GM’s quest to achieve CAFE compliance as well.

Time is on GM’s side in this proposal; GM Global Product Board can drag its feet on making a decision because 1) the work is being done in China already and 2). DeltaII will have much greater interchangeability than previous models – so it can be made at any plan that produces DeltaII products with little fuss. Expect it to cost between the $20,000-$24,000 range, if it makes it to our shores.

The next Buick Excelle (Skylark) will start production in China in GM's Third Quarter of 2009 between July-September 2009.

*****

Buick’s resurgence (and importance outside of North America) may not end there. Currently Buick is sold in Israel, Taiwan, China and a few other key markets. Rumors also state that in light of Opel’s “failure” to grab attention in the India (and have since left), Vauxhall or Buick MAY BE introduced to pick up the middle of the lineup and distinguish itself from cheaper Chevys. Vauxhall may have a chance of catching on (even though they are essentially Opels) because of the strong link between the UK and India. But Buick may have the upper hand thanks to it’s close proximity to China and their successes there.

GM’s Global Product Board is also studying bringing Saab-Hummer-Cadillac in India the next decade as one dealer network OR should they simply move forward with the Chevrolet brand as an inclusive marque (as it is in South America, Africa and select markets of the Middle East).

So as you can see, things are up in the air, but speculation for further global growth of a number of key brands are there as some markets mature and a middle-class emerges.

*****

GM’s proliferation of the VE/Zeta platform also seems to be experiencing upheaval.

It seems that GM has all but official cancelled the RWD Impala (GMX551 program). GMI learned of this shortly before the recent articles with Lutz's commentary, but we were waiting to hear back from our insiders. Apparently there were people who sit on the GM Global Product Board who never liked the idea of the Impala moving to RWD, partially because of the success of the refreshed W-body model. The new CAFE standards were the icing on the cake for the case against a RWD Impala.

How this will settle is still up in the air. We have not heard much of the “Chi” platform (essentially a Lambda platform, but in a FWD application) for some time. In fact most of us think it is dead. However, could a project like this be revived if GM has killed a RWD Impala? There is also rumors that the next generation EpsilonII platform can be stretched and widened to accommodate an Impala – but will the Malibu (which is certainly larger than the car it replaced) cannibalize Impala sales between now and the next-generation, tarnishing the nameplate? Not to mention how it will affect possible future police/government car sales.

This will be a close call for GM; again demonstrating how government regulations can change so much in a short period of time.

But we can be critical of these decisions as well.

Though non of us are insiders, one wonders, why is it that GM is pulling back from some of these RWD endeavors while domestic competitors like Ford are moving forward with their plans for a new family of RWD products? And it is already confirmed that the new LY family of RWD products will be coming from Chrysler (the Challenger is supposed to be the first of the LYs). Since CAFE is based on “averages” is it possible that Ford’s future product mix will include significantly less trucks/suvs/etc to offset the expectant mileage from a “Huntsman/Orion” family of products? We already know that a number of future Ford products are planned from this platform --- why Ford and not GM? A recent article pegs use of a RWD vehicle to a loss of 1-MPG vs. a similarly sized FWD product. Cannot GM overcome this problem through AFM, DI, smaller engines with turbo-chargers, multi-speed automatics or "DSG" style transmissions, hybrid technology, HCCI ingition, etc?

Is any of this on the table or was GM's decision made in light of these current/emerging technologies as well? Can GM afford to let Chrysler and Ford move forward with their mass-market RWD programs and sit on the side-lines?

*****

We all know that the Torrent will be axed shortly and move to GMC (the Terrain) in the near future. But after these products run their life-cycle, expect their replacements to be larger.

Chevrolet is also getting a smaller Escape/CR-V competitor that may follow the look of the T2X concept from a few years back, but more than likely will be a production version of the Chevy Groove that gained so much attention last year. It will most likely be based on the GammaII platform – with one insider stating that it will be DeltaII based. Expect this CUV to be sold in Chevrolet dealerships around the world, and in Australia as a Holden model. A GMC version is also very likely.

As gas prices rise, government regulations become burdensome and the shift to small-vehicles increase, this product will play a key role at GM. As such, the product will be built around the world in places like Lordstown (we know a Gamma line is going to be set up in Lordstown thanks to the UAW leaking the plans), South Korea and Ramos Arizpe.

It also illustrates GM’s “CUV Strategy” for the long-term: the compact CUV (Groove), the midsize CUV (Equinox), and the fullsize CUV (Traverse) may very well mark the end to incredible investments in the larger SUVs and trucks. This isn’t to say that these products will disappear, but that they may have less and less updates or may have only skin-deep updates as volumes fall. Recent speculation by some industry experts say we may see more “small pickups” based on unibody platforms (the Toyota BAT concept, GM’s own Chevy Montana in Brazil/Argentina, Honda’s Ridgeline, etc) may also lead to a renewed emphasis on the CUV’s underpinnings to spawn an entire family of products that includes small pickups. And when others in the industry – including one Ford official and Chrysler’s Jim Press – state they are interested at exploring small-unibody pickups, could GM be far behind?

A last possibility is for the smallest CUV to evolve from the HHR and be DeltaII based with AWD and higher ground clearance – but this is not confirmed. More than likely the plan is to keep the HHR as wagon-esque offering and introduce these new products outlined above.

Production of the small-CUV is slated for the September 2010-May 2011 timeframe.

*****

The next generation of Buick LaCrosse has been set for production in January 2009 and is expected to be built off the extended version of EpsilonII. LaCrosse will be sold and made in both the U.S (Fairfax plant) and China. It will have the Velite-Enclave design theme and offer FWD and AWD. The price will range $27,000-$30,000. The Chinese models will have 4-cylidner engines, but the US version will likely get V6s only. There is also unconfirmed reports of a 3.0L version of the High Feature family (essentially a bumped version of the 2.8LV6 found in the Saab 9-3 Aero and Vectra) may be in the works and may debut first on the LaCrosse as an "entry-level" engine. If this engine becomes production, expect it to replace the 3.5/3.9L VVT "high value" family.

The 304hp/DI version of the 3.6L V6 may also be offered as a new LaCrosse Super, but so far GM hasn’t put this engine in any FWD products.

However, as it relates to the RWD information above, for a time there seems to have been a possibility that the next LaCrosse may have been slated for the Zeta platform (See Camaro Goes Hybrid, As GM Axes Rear-Drive Impala, LaCrosse?). This is obviously not the case any longer.

There were also rumors for a time that the LaCrosse name would be dropped and the Regal name re-adopted. Buick sells both nameplates in China – but the LaCrosse name is expected to continue while the Regal is cancelled in China.

We will see a near-production version of the LaCrosse very shortly. This reinforces what we’ve already known.

*****

The next Buick Lucerne, which will replace the Park Avenue is China, maybe in upheaval as well.

Originally the plan was to switch the vehicle to the VE/Zeta platform (to join the STS/DTS’s eventual replacement). However, the falling US dollar is creating headaches for GM. This may lead to 2 GM plants going head to head (the Elizabeth Australia plant.vs. Oshawa car Assembly) to build these products for some world markets.

*****

Come 2010-2011 (January 2011), the Daewoo Tosca/Chevrolet Epica and Chevrolet Malibu will be “merged” on the EpsilonII platform. Expect the Tosca/Epica and Malibu to have virtually the same same interior and exterior design -- with the main differences being engines and size. The Tosca/Epica will be on the Standard Wheelbase version of EpsilonII, while the Chevrolet Malibu will be on the Extended version. The next version of the North American Malibu may also be as wide as the current Impala if the Impala should disappear altogether.

*****

The bad news in the product cycle is what may be in store for Pontiac.

We have all read reports that nearly-confirmed that GM was planning to switch Pontiac to an all RWD lineup in the coming five or six years. The plan was to do this in earnest and finally give some excitement to the "Excitment Brand".

This seems to be up in the air now.

Pontiac was originally slated to have a new product on the EpsilonII platform until an all new Alpha based model arrived. However, it now appears as though the next G6 may be nothing more than a re-badged Tosca/Epica with a few Pontiac elements – so essentially a “standard-wheelbase” Tosca/Epica while the US Malibu gets larger.

The next Pontiac G6 will end production in 2013. Sadly there are no updates for the G6 in the short term – allowing the vehicle to basically languish while the rest of GM’s lineup gets a major overhall; reinforcing complaints that many GMIers have had.

The Alpha sedan/coupe – once a certainty – is now in jeopardy. The GM Global Product Board is re-thinking the entire Alpha program due to costs, CAFE standards, and production expenses. As of right now, the only sure thing about the Alpha program is the Cadillac BLS replacement is still a go (it will cost more so GM can recoup the cost per unit v. a stripped out RWD G6 which you can’t necessarily sell for $18K like they currently do). It may also spawn high end convertibles and a RWD crossover (possibly to eventually replace the BRX?). But the point is it’s mostly higher end products.

The G6 won't be the only Pontiac that ends production in 2013. Sources are stating that the Pontiac G8 exports to the US may end by 2013 – and depending on Zeta’s production at Oshawa (if it goes through) plans are up in the air.

The next Pontiac Vibe ends production in 2013 the latest, and 2011 the earliest (depending on if GM wants to continue their participation at NUMMI). The Pontiac G5 ends production in 2009/2010 time-frame – but it’s unknown if GM will decide to re-badge the newly merged DeltaII-Cobalt/Optra/Nubria/Lacetti products as a Pontiac or not. Chances of a next-gen Kappa sedan/coupe (the G4?) hang on Alpha moving forward (the next Kappa platform was supposed to use parts from the Alpha project). The Pontiac Solstice ends production by 2012, and is set to be redesigned, however the Solstice is a niche product and can be cancelled in a blink of an eye and moved to another division if need be.

There is a glimmer of hope – but a drastically different plan – currently under consideration. It isn’t official, but some feel that perhaps Pontiac may become "refocused" with smaller 4 cylinder, AWD sporty vehicles in light of CAFE regulations. What this may mean is unclear – a Pontiac G5 with AWD? A next-gen G6 with turbo I4s and AWD? No one knows and nothing is confirmed.

What does all this mean for the future of Pontiac? Could GM just be laying low before killing the brand – or is this a lull before their plans are solidified after CAFE reshuffles their plans? Or will Pontiac merely exist to sell re-badged Chevy rather than bespoke products? No insider we spoke with knows for sure – but if all the stars align (in)correctly, there may be some big trouble ahead for the Poncho brand.

*****

Quite a lot there to take in all at once – but we report it as our insiders tip us off. We will amend this post or add a new one as more info becomes available. The bottom line remains: CAFE and the very recent dependence on global markets are shaking things up at GM. Whether you think GM was naive or not for planning for a “CAFE-Doomsday” scenario is a non-issue at this point. And the reliance on more profits coming from over seas may mean that GMNA may play second fiddle to the desires of Eastern Europe and Asia moving forward (i.e. – Future Buicks may all be based on designs/development solely done in China – and not the US).

It also may mean that what's appropriate in a lineup may change as well. No one doubts that Chevy should be a full-line car brand with a B-segment product all the way up. But as gas prices rise or CAFE standards become tougher, could we see a smaller "city-car" product fit below the Aveo? And if that's the case, does that mean it will be appropriate for brands like Buick to go fishing in the C-Segment (or as in China, the B-Segment possibly as well)? (See Small premium Mini fighter from GM for details). And we are already seeing GMC offering a non-BOF SUV (the forthcoming Terrain) and a unibody based "truck" in the Denali XT concept which may become a reality.

In light of this, must we refine the "reach" of each brand to help combat the upcoming regulations?

Fact is that things ARE being shaken up – and may long-term product plans are now in flux. Stay tuned!

*****

ChevroletRevived's Take 2: Things are changing at GM; Pontiac will either be cut or drastically refocused due to CAFE regulations. Cars like the G6 and G8 are currently not set to be replaced and GM is working on restraining the gas guzzlers at the corporation to be the ones that count; high profit luxury cafrs and GMT-900 platform. Everything is being gone over and GM is rethinking it's overall product plans. Many things are up in the air right now but it's certain that Pontiac will not continue as is. Likelihood of the Skylark coming for Buick is high in my opinion and GM is working to align China with Buick North America to increase economies of scale and cut costs. Regarding the LaCrosse, the possibility still exists that the car will be moved up to sometime this year; for quite sometime January 2009 was a known date and it wouldn't take that much to move production up an few months. Both scenarios are still on the table, either 1. Moving up of production to mid/late 2008, 2. Launch as planned in January 2009. As nadepalma mentioned our sources indicated before the recent articles that the Zeta Impala is all but cancelled, but it took a bit to get multiple confirmations which is usually a standard practice here at GMI. An Epsilon II based Impala is very probable at this point, and I'm sure the GM Product Board is cheering the decision to do it. They never liked the idea of replacing such a high volume product with an RWD one, but every indication was that they were going to do it anyway due to Lutz's urging. CAFÉ and the Product Board have changed decisions on this; and undoubtedly on much of GM's future product lineup.

*****

(Disclaimer: This is cobbled together from reputable and anonymous sources cited in previous Rumor Mill threads, with some added commentary and speculation)

[CadiEldo67]

As much as I am a fan of Pontiac, I hate seeing it go on as it is, either kill it or revive it. I'm not sure what I would buy if there was no Pontiac, but I doubt GM would have anything to satisfy me. GM really could use a brand that has cars that are good looking, fun to drive, fuel efficient, and desirable. If Pontiac was going to be a niche brand, how would that affect GM's overall fuel economy average? Especially if it was only a G8 sized vehicle with a V8. I would have to say, based on my limited experience with life, that Pontiac needs:

• A G5 sized car (fwd or rwd) on kappa or alpha
• A G6 sized car (preferably rwd, but if not, the awd) stretched alpha?
• A G8 sized car, on zeta or a larger epsilon II platform
• A solstice or something better

if the G5 was fwd, I don't think that it would ruin Pontiac forever, but it isn't even about fwd vs. rwd, its about the cars, and the fact that Pontiac is being allowed with wither on the vine.

[61BelAir]

Its as if its 1996 again and GM is killing RWD and giving the RWD market to all the competitors! It appears the BEAN COUNTERS are back in command!

[86'er]

Can GM afford to let Chrysler and Ford move forward with their mass-market RWD programs and sit on the side-lines?

If GM indeeds keeps this up, they can kiss me goodbye as a future passenger car customer, which is where they need the most help.

We can argue all day about where the Zeta ought to go in the byzantine hierarchy, but there is no doubt that they need one well-placed high-volume Zeta in the line-up. I think Chevrolet would be a good place to start, with a Buick to follow.

[killerrd2]

Too much doom and gloom over at Pontiac. How sad!

I'll keep hoping though!

[agman25]

My idea for Pontiac. Develop a RWD, Rear engined Cobalt sized platform (VW up! but bigger and sexier). Would get 35mpg easy with twin turbo 1.6 l gas engines and would be plenty fast. Forget everything else. Make a sedan, SUV and a sports coupe variant. Basically a cheaper 1-series but with better interior space that people could use for everyday purposes.
Pretty radical and I am not sure if it will work but the direction Pontiac is headed doesn't look good either.

[Evo69]

Good and sobering information there guys, thanks for the article.

But I still feel Chevrolet needs a reasonably priced full sized RWD sedan. Chevrolet should have something for everybody and I know they can do it.

[61BelAir]

Originally Posted by 86'er

If GM indeeds keeps this up, they can kiss me goodbye as a future passenger car customer, which is where they need the most help.

You are exactly right. I was looking forward to buying a car in 2009 or 2010 and I had my heart set on a RWD Impala, but if its FWD GM can kiss a sale to me goodbye as well!

[Yarddawg1987]

Originally Posted by 61BelAir

You are exactly right. I was looking forward to buying a car in 2009 or 2010 and I had my heart set on a RWD Impala, but if its FWD GM can kiss a sale to me goodbye as well!

Why not buy a G8???? its RWD, and its a hellofalot better lookin than the current impala.

[61BelAir]

Originally Posted by Yarddawg1987

Why not buy a G8???? its RWD, and its a hellofalot better lookin than the current impala.

The G8 is nice, but I really wanted to be able to put a 2010 Impala in my garage next to my BelAir.

[buick59]

I wonder how much longer Bob Lutz will hang around. He has to be frustrated with the "Board" not listening to his recommendations. If Ford, Chrysler and even Hyndai for heaven's sake can figure out how to produce RWD cars why can't these bozos. I may have to follow most of my friend's leads and head to Mercedes or BMW's. Most of them gave up on GM a wile ago.

[civilzues]

Great write up! full on information.

[JVal14]

Other than the apparent abandonment of most RWD ideas, it sounds like GM is playing things pretty smart. I know everyone's been down about the new CAFE standards, but GM is more up to the challenge now than they ever have been, and I'm very excited to see the new innovations that come out as a response. There's already so many ways to make a car more efficient, I can't wait to see automakers - especially GM - really put their minds to it and take the existing technologies to the next level.

[Chaz_23]

I better get that G8 V6 in 2012. What will it cost by then though, 40K?

The RWD Impala has to happen just as a Canadian G8. Otherwise they would have gone thru all the trouble in Oshawa just to produce the Camaro? Alternatively, if GM gets dumb, in the way that only GM can, since the Camaro will not sell hundreds of thousands of units, they'll cancel it after a couple of years, leaving NA without RWD again.

[86'er]

Originally Posted by Yarddawg1987

Why not buy a G8???? its RWD, and its a hellofalot better lookin than the current impala.

I'm not loving the whole Holden-with-an-Arrowhead look.

Are those hood scoops even functional? Regardless, that would have to go, and that'd be a $1000 touch I'm sure for a flush hood.

Black-only interior? Don't think so.

Bucket seats only? Don't think so.

Ride options of harsh and harsher? Don't think so.

See where I'm going with this?

No complaints on the powertrain front, of course.

The RWD Impala has to happen just as a Canadian G8. Otherwise they would have gone thru all the trouble in Oshawa just to produce the Camaro? Alternatively, if GM gets dumb, in the way that only GM can, since the Camaro will not sell hundreds of thousands of units, they'll cancel it after a couple of years, leaving NA without RWD again.

Agreed, despite the exchange rate and intransigence of the CAW, none of the tooling upgrades indicate production limits of approx. 50,000 a year.