Chevy’s Mighty Minicar Holds Appeal for Wide Range of U.S. Buyers

CHICAGO – The Spark caught fire in August, helping contribute to a 25% rise in Chevrolet passenger-car sales following its introduction to the U.S. July 19.

"We were forecasting sales of 1,900 units in the first (full) month on the market, and only had Spark available in 18 markets across the U.S., but exceeded our expectations with sales of 2,600 units," says Mike Weidman, Chevy small-car marketing manager.

Weidman makes his remarks in an interview prior to a preview of the ’13 model subcompact for the Midwest Automotive Media Assn. here.

The Spark, built by General Motors’ South Korean subsidiary, gradually will be rolled out nationwide as the auto maker adjusts supply with demand in the U.S. However, he warns Chevy isn't going to be swayed into a knee-jerk reaction and quickly beef up inventory.

"By the time everyone in every market will be able to see a Spark, it will either be the end of this year or early next," Weidman says.

Even with sales exceeding expectations, he vows Chevy is going to "proceed cautiously" in making plans to adjust inventory levels.

"What's going to be the eventual demand level? We're unsure because there's a lot of competition in the mini segment and a lot more coming,” Weidman says. “We're going to explore the amount of demand, and once we feel it has reached a steady level, we'll adjust and align production and shipments accordingly.”

GM will not rapidly build inventory during the first few months of ramp-up, he adds.

“We want to measure what the acceptance level is first, as we open up availability to all markets. However, since the car is built in South Korea and we can't get supplies as quickly and turn inventory on a dime as if it was built in the U.S., we'll go with a little more output initially."

Overbuilding also risks resorting costly incentives to sell excess inventory, Weidman says.

The Spark starts at $12,995, a price point that he admits "doesn't leave a lot of latitude to begin with for incentives," though he insists none should be needed.

"When it comes to incentives, we use discipline and restraint. When you price a car correctly from the start and have the correct inventory levels to begin with, you don't have to rely on incentives. We haven't had to put any cash on the hood of (the) Cruze, for example."

Weidman declines to provide an annual sales forecast for the Spark. But he says based on early returns the No.1 market in the U.S. for the car’s with fuel economy of 32-38 mpg (7.3-6.2 L/100 km) is here in Chicagoland.

"Chicago accounted for 30% more sales in August than either of the next top markets – New York and Los Angeles," he says, while conceding demand here may have been influenced by the high gas prices that exceed those in all other major metropolitan markets in the country.

Weidman says it's too early to determine sales patterns, but says that when it comes to small cars most buyers typically are younger or empty-nesters who are downsizing.

U.S. Spark buyers so far range in age from 19 to 83 and have traded in a variety of brands, including luxury models such as a BMW convertible, he says. But based on the low starting price, many units have been purchased by entry-level, first-time buyers without a trade, while 30% were bought by consumers moving up from a used car.

Weidman admits the Spark, as with other small cars, attracts more buyers when gas prices spike. But he doesn't expect dramatic sales shifts each time pump prices rise, "because I think people have become more accustomed to higher prices, and as a result demand (for small high-mileage cars) has stabilized.”

Weidman won’t discuss the upcoming electric version of the Spark, except to say it will be out in 2013.

As for other powertrain options, Chevy sells diesel-powered Sonic and Cruze models in Europe and next year will offer the diesel Cruze in the U.S. as a ’14 model. Weidman says the auto maker will use the diesel Cruze to measure consumer acceptance of oil-burners in small cars and whether to offer a diesel mill in the Sonic and/or Spark in the future.