Co. heads to the Los Angeles Auto Show this week, the company’s first national event since emerging from Chapter 11, with hopes of proving to skeptical Californians it has changed its ways.
GM, which faced a firestorm of criticism over the last 18 months for a taxpayer-funded bankruptcy due largely because its truck-heavy product portfolio fell out of favor during a period of whipsawing fuel prices and severe economic recession, will show four cars at the show.
Although GM faces image repair on the national level, it is particularly sensitive to its perception in California. The state represents the nation’s largest new-vehicle market, and the auto maker has struggled there, with a market share almost half of that nationally.
The new GM sees the Los Angeles show as its first step in a second chance at the market.
“They are going to want to make the splash, especially in California, that they are back with a full portfolio of products,” says Joe Phillippi, principal of Auto Trends Consulting Inc. in Short Hills, NJ. “And showing something from all four brands also is very important.”
For GM, the 2009 auto show contrasts greatly with year-ago, when executives from each of the Detroit Three were in Washington pleading for government support and the auto maker basically skipped Los Angeles’ media days.
But this year, GM comes loaded with product. Further underscoring its new focus on the event, President and CEO Fritz Henderson will open the show with a keynote address.
“We are emphasizing both the importance of the West Coast to our business and the products we have coming,” says GM spokesman Patrick Morrissey.
The all-new Chevrolet Cruze compact car and a production-intent Chevy Volt extended-range electric vehicle headline GM’s introductions at the show, which starts with media days Dec. 2 and opens to the public Dec. 4.
The all-new Buick Regal sport sedan also bows with an eye on making inroads for GM on the West Coast, as does the highly anticipated Cadillac CTS Coupe.
All four products arrive at dealers nationally next year, beginning with the Regal and CTS coupe, followed in the third and fourth quarters by the Cruze and Volt.
GMC goes to the show without a product introduction, although the truck-exclusive brand prominently will display the new-for-’10 GMC Terrain. Plenty of signage will tout the cross/utility vehicle’s segment-leading highway fuel economy to consumers. The Terrain is arriving now at dealers but in limited numbers.
“Awfully good (product),” Jim Hossack, senior consultant at Tustin, CA-based AutoPacific Inc., says of GM’s lineup for Los Angeles.
“I can’t believe what a change Bob Lutz has made, whether by himself or through empowering others, but the products are so much better,” Hossack says of GM’s vice chairman hired back in 2001.
GM primed the pump last month by unveiling the Regal to a handful of journalists, Buick enthusiasts and potential buyers during a glitzy brand event at The Palladium in Hollywood.
The Regal launch represents Buick’s most aggressive push, as well the brand’s most promising bid, to appeal to West Coast consumers tending to favor imported products.
A twin of the auto maker’s Opel Insignia launched in Europe last year, the Regal’s design features the international flair of its key competitors and a powertrain lineup consisting solely of two 4-cyl. engines. It receives a base 2.4L 4-cyl. or an optional 2.0L turbocharged 4-cyl. mill.
Where the Regal punches with design and performance, the Volt and Cruze counter with fuel economy.
The Volt bows in its latest production-intention skin at the show, which will feature “green” ride-and-drives for both the media and the general public and annually serves as the site of a “green car of the year” award. The Volt is not up for the award, as it launches in late 2010 as an ’11 model.
And although the Volt’s 40-mile (64-km) range exclusively under electric-power only has been widely publicized by GM, the auto maker will host a number of educational events both for the media and the general public in conjunction with the show.
GM also will use the show as a venue to announce on Wednesday the winning name for a unique Volt color. The three finalists include Chargetruse, Recharge Silver and Voltaic Platinum. In addition, Chevrolet will announce the initial retail markets where the Volt will be sold and expectations are California will figure prominently in the plan.
The general public also will get its first look at the U.S.-spec Chevy Cruze, which replaces the Cobalt as an ’11 model. GM has touted the Cruze, already on sale in international markets, as the auto maker’s most refined and potentially profitable small car ever.
GM announced this week the Cruze will achieve an estimated highway fuel economy of 40 mpg (6.0 L/100 km) with its optional 1.4L turbocharged 4-cyl. engine. A 1.8L 4-cyl is available as the base engine.
The production version of the ’11 Cadillac CTS Coupe, which impressed critics at the North American International Auto Show in Detroit last year as a concept, will be revealed.
The 2+2 coupe looks almost identical to its concept version and at launch will come equipped with one engine – GM’s award-winning 3.6L V-6 with gasoline direct-injection technology.
Hossack says the show’s product lineup makes perfect sense for California. But given GM’s dealer reductions, he worries what might happen after the auto maker packs its tents for the Detroit show in January.
“GM definitely has had a hard time with sales in Southern California,” he says. “In this business, you need good public relations; you need good marketing; you need good products; and you have to be at all the auto shows.
“But you also have to have dealers, and I’m worried about their separation plan, especially here in Orange County,” adds Hossack, who says three major Chevrolet dealers have closed or are winding down within a few miles of his office.
Over the next four years, GM plans to reduce its entire dealer body by some 1,546 stores to 4,700 locations from 6,246 at the close of 2008, according to a viability plan submitted to Congress Feb. 17.
The auto maker has backed off on a few closings, and some are related to plans to shutter the Pontiac and Saturn brands. But the scope of the reduction remains under scrutiny in Washington.
GM spokeswoman Ryndee Carney says GM is not releasing the identity of dealers with which it intends to terminate franchise agreements nor the number of those winding down in individual states. GM also will not comment on the reduction in California dealers relative to other states, she says.
The auto maker has said the goal is to improve the throughput and profitability of those dealers it retains.
“I guess we just have to trust that the right ones are going away,” Hossack says.