DETROIT – Despite the American public’s growing interest in small cars,Corp. will launch the all-new Chevrolet Cruze compact car in Europe almost a full year ahead of its debut in the U.S.
Ed Peper, GM North America vice president-Chevrolet, says the strategy is based on a desire to maintain the brand’s momentum overseas and preserve an orderly product cadence at home.
Manufacturing capacity was not a factor in determining Europe will benefit from a March 2009 Cruze launch, while the U.S. will not see the new compact car until April 2010.
“It’s a lot of things,” Peper tells Ward’s after the auto maker previews vehicles it intends to reveal at next month’s Paris auto show. “We’ve got a lot of activity that’s taking place.”
Peper cites last year’s launch of the redesigned Malibu midsize car and the current rollout of the Traverse midsize cross/utility vehicle, which began arriving at Chevy dealers this month. The Camaro sports coupe comes in February, followed by a redesigned Equinox CUV in June.
“We want to be able to space out the products that we have and have very significant launches for each one,” he says.
But as average U.S. gasoline prices shot to a record $4.11 this summer, consumers began demanding smaller, more fuel-efficient vehicles. GM responded by announcing the closure of three North American truck assembly plants and plans to launch the Cruze on an all-new compact car platform.
“It seems like every day there is news that comes out that may get consumers to think twice about their car and truck purchases,” Peper says in the wake of the bankruptcy filing by investment banker Lehman Bros. Holdings Inc. and the forced sale of broker Merrill Lynch & Co. to Bank of America. “We just gotta continue to present the products we have, which are great values in the marketplace, and continue to try and sell them.”
The 5-passenger Cruze will replace the Chevy Cobalt in dealer showrooms as an ’11 model shortly after U.S. production ramps up at GM’s Lordstown, OH, assembly plant in mid-2010. GM says Cruze will bring bold styling, a roomy interior thanks to a long wheelbase, and class-leading fuel economy via a sophisticated powertrain to the compact car segment.
Even Peper admits he would prefer a timelier launch in the U.S., given the consumer shift and Cruze’s promise to redefine its segment, but he says the 4-year-old Cobalt has performed well this year and a newly added third shift at Lordstown will put 70,000 extra units on the market next year.
“We’re doing great with (the) current Cobalt,” he says. “Sales are up. We’re doing extremely well with Cobalt.”
GM dealers have delivered 145,941 Cobalts through August, up 9.6% vs. like-2007, according to Ward’s data.
Peper also defends Cruze’s timetable by citing a sales surge for Chevy in Europe, where deliveries for the brand grew 23% over the first six months of the year.
“It makes sense to capitalize on that momentum,” he says.
Peper would not disclose where the European-market Cruze will be assembled. The car’s platform was designed primarily by GM Daewoo Auto & Technology Co. in Asia.
GM expects to sell the car in more than 100 countries.
Peper says the new compact-car platform that will shoulder the Cruze could spur additional Chevy models, such as the 7-passenger Chevy Orlando multipurpose concept car GM plans to unveil in Paris. But he withholds further comment.
“There are other models I’m not going to discuss today that are in the lineup for us….different derivatives,” he says.
Expect the Cruze to reflect the regions where it is sold. In addition to the usual powertrain variations – Europe, for instance, will receive a 150-hp, 2.0L turbocharged diesel mill and the U.S. will not – safety and content features will differ.
“That’s the beauty of doing an architecture globally,” says Chuck Russell, vehicle-line director-North American compact cars. “You can take the base and make changes up front as needed to make it reflect what you need in various markets. It gives you development synergies and reduces cost.”
“And the fact is, we don’t have global requirements for how people perceive compact cars,” he adds. “A compact car in the U.S. is perceived differently than a compact car in Europe and Asia, just in terms of what people are willing to pay. You have to make adjustments or you won’t win.”
For example, Peper suggests it unlikely GM would offer a coupe variant of the Cruze in the U.S., which it does presently with the Cobalt. “The (compact) segment is moving well toward 4 doors now,” he says.
Peper additionally hints at a firm sales month after the industry has struggled this year under the weight of a weak economy and high gas prices.
“We’re starting off pretty solid this month,” he says, confirming GM will eliminate the “Employee Pricing for Everyone” sales incentive it rode in August to its best sales performance of the year. Peper also downplays the prospect that Wall Street’s doom and gloom might erode September sales.