GM Scrambling to Meet Equinox Demand

Despite rising demand for the Chevrolet Equinox cross/utility vehicle, General Motors Co. is unable to accelerate its plans to increase production.

“If we could, we would – believe me,” Steve Carlisle, vice president-product planning says today during a sales briefing for analysts and journalists.

Deliveries of GM cars slipped 9.2% in June, compared with like-2009, according to Ward’s data. But light-truck sales soared 30.9%, largely because of a 25.2% jump by GM’s volume flagship, the Chevy Silverado fullsize pickup.

Increased pickup demand is a reflection of an economic turnaround, says Don Johnson, vice president-U.S. sales operations.

“As companies continue to invest in their businesses, we expect this segment to continue to recover,” Johnson says in a statement. “We think the release of some pent-up demand in the pickup market is an indication that a fundamental part of the U.S. economy is gradually strengthening.”

Also GM is scrambling to meet demand for its popular Equinox, which saw June sales shoot up 179.7%, compared with like-2009, according to Ward’s data. The auto maker is spending more than $90 million on a multi-phase initiative to boost production of the CUV and its platform-mate, the GMC Terrain.

The first phase involves line retooling and a body-shop upgrade at GM’s assembly plant in Ingersoll, ON, Canada. Output is expected to increase from 795 vehicles per day to 996 by Aug. 2.

Those improvements “are going on now,” Carlisle says, confirming next month’s target for increased output.

Average transaction price for ’10 Chevy Equinox $4,800 higher than ’09 model.

GM also plans to squeeze an additional 300 bodies per day from Ingersoll and ship them to the auto maker’s plant in Oshawa, ON, about an hour away, for final assembly. Oshawa output is set to begin in the fall.

The Equinox story also underlines a $2,000 increase in GM’s overall average transaction prices. The redesigned-for-’10 CUV is selling for about $26,500, which is $4,800 higher than the ’09 Equinox and up to $3,900 more than competitive models, says Chevrolet General Manager Jim Campbell.

The Equinox’s styling, content and perceived value is “really resonating” with consumers, Campbell says during today’s briefing.

Notably, Equinox buyers are opting for a 4-cyl. engine more than 80% of the time, he adds.

The take-rate on the Terrain is 60:40 in favor of the 6-cyl. engine choice.

On the downside, the Chevrolet Camaro muscle coupe saw deliveries sales slip 19.1% in June, compared with like-2009.

Overall, GM’s sales jumped 11.9% last month, even though the auto maker’s portfolio boasted three additional brands in June 2009.

Retail sales rose 11%, the auto maker says, while fleet deliveries totaled 30.5%, down from prior-month’s 37%.

Sales to rental-car companies totaled 21%, down from May’s 27% tally.

In other GM news today, GM Chairman and CEO Ed Whitacre announces the auto maker will add Texas, New York, New Jersey and Connecticut as launch markets for the ’11 Chevrolet Volt extended-range electric vehicle.

The four states join California, Michigan and Washington D.C. as initial markets for the car, which represents arguably the most important new vehicle in the company’s history. It will come out of GM’s Hamtramck, MI, assembly plant in November.

Whitacre tells the Austin, TX, Chamber of Commerce early today the addition of the four states is due to intense consumer interest for the Volt, and is proof the high-tech car can handle both the Texas heat and a New York winter. He also says it demonstrates how the Volt can do double duty as a commuter vehicle and long-range driver.

The Volt’s unique lithium-ion battery-backed propulsion system takes the car up to 40 miles (64 km) on battery power alone. After the juice is drained, an internal-combustion engine serves as a generator to extend its range another 300 miles (483 km).

Whitacre also says Chevrolet will add four Texas electric utilities and five Northeast power providers to a U.S. Department of Energy demonstration program studying battery-charging-station use. The utilities will use Volts to examine the charging station installation process and vehicle charging and provide feedback.

Also as part of the initial launch, a Volt will be driven from Austin, TX, to New York, a distance of 1,776 miles (2,858 km), to further demonstrate the car’s capabilities. GM will keep enthusiasts posted on its progress along the way, using social-media outlets such as Facebook and Twitter.

[email protected]