Chevrolet Chief Confident of Gains in 2006

NEW YORK – Despite a disappointing first quarter, General Motors Corp.’s Chevrolet Div. expects volume gains this year, says General Manager Ed Peper.

Part of the reason for the first-quarter drop was a reduction in sales to automotive rental companies, he tells Ward’s.

“But we’re going to continue to chase government and fleet customers,” he says. “Regular fleet business is good. We’d like to do less overall rental business and make it up in retail sales.”

Peper adds that the average profitability per vehicle goes up substantially with retail business.

Meanwhile, although first-quarter sales were lower than like-2005, Chevrolet’s inventory has plummeted.

“We’re almost 60,000 units below what we would have been in past years; there are very few Suburbans available,” he says, noting dealers have a strong order bank for the jumbo SUV. Soaring gasoline prices have not had a negative impact on Suburban sales, he says.

“We’ve also done well with the (all-new) Tahoe,” Peper says. “We will be up in Tahoe sales this year,” adding Tahoes sold in the first quarter have been well equipped. Navigation systems and rear-view cameras have been notably popular.

“We didn’t see a falloff in Tahoe sales because of high gasoline prices,” he says. “It’s not something that makes a final decision on sales of big SUVs.

Chevy Suburban seeing strong sales.

Other models that have low inventories include the Aveo small car and ’07 Avalanche pickup truck built on GM’s new GMT900 architecture for fullsize SUVs and pickups.

Peper says Chevrolet will focus on selling the Impala passenger car and Silverado and Colorado pickups.

“The Silverado (which will be replaced in the fall) continues to sell extremely well,” he says. The current Silverado will continue to be sold along with the all-new ’07 model.

He terms overall truck inventories “moderate.” Incentives on the fullsize Silverado range up to $2,000, “but we’re not going to be the incentives leader,” Peper says. “We’re going to invite our customers to look at our value story. It’s working for us.”

Peper promises Chevrolet marketing will be consistent and says he is counting on the Chevrolet website to help get his message out. Visitors are spending about 9-½ minutes when they click on the site, he notes.

“We’re excited about our new products,” Peper says.

Trucks will account for 65% of Chevrolet sales this year. However, he has high hopes for Chevy’s midsize car entries, the Malibu and Impala. He forecasts the Malibu will have higher retail sales this year.

“(The) Malibu will be in the lower-priced end of the segment, while (the) Impala will sell in the higher-priced level,” he says.

“We’re going to fight with Honda, Toyota and others in the last three quarters,” Peper says. “I think we’ll get some share back in the rest of the year.”

Asked whether Chevrolet can outsell the Ford brand again this year, Peper says, “We want to stay on top. That’s our goal.”