Pontiac Optimistic About Performance Image Despite Stricter CAFE

Special Coverage

New York Int’l Auto Show

SAN DIEGO, CA – General Motors Corp. is not giving up entirely on shifting some of its higher-volume products to rear-wheel drive, despite stricter fuel-economy laws that begin as early as 2010.

But Pontiac Market Director Craig Bierley admits a rethinking is in order as to what constitutes performance at GM’s “excitement division.”

Powerful Pontiac G8 arrives ahead of stricter fuel-economy regulations.

GM last year said it might abandon plans to switch its popular Chevrolet Impala midsize sedan from front-wheel drive to RWD, citing a new corporate average fuel economy standard of 35 mpg (6.7 L/100 km) for the U.S. fleet by 2020.

Also seemingly caught in the crosshairs was Pontiac, which GM executives hope to evolve into a stylish performance brand with a RWD backbone.

Indeed, GM product boss Bob Lutz once characterized his aspirations for the brand as “an affordable, American BMW.”

But as Lutz pointed out at January’s North American International Auto Show in Detroit, rear drive now may be unwise given inherently higher drivetrain friction that translates into poorer fuel economy.

But Bierley insists that’s not entirely the case.

“We’re not writing off rear-wheel drive at this point – heck, we’re just launching the G8,” he tells Ward’s during a preview here for Pontiac’s new flagship sedan designed, developed and manufactured by GM Holden Ltd. in Australia.

The ’08 model, built on GM’s global RWD Zeta architecture, began arriving from Oz earlier this month featuring a standard 3.6L V-6 or an optional 6.0L V-8 mill.

Pontiac will unveil today at the New York International Auto Show a top-of-the-range ’08 G8 GXP powered by a 6.2L V-8 that premiered earlier this year in the ’08 Chevy Corvette, as well as a yet-to-be-named ’10 G8 sport truck also packing a longitudinal V-8.

’09 Solstice to advance Pontiac’s performance image.

Pontiac’s ’09 Solstice also will be unwrapped at the show, today, which should further the brand’s performance image.

However some industry critics say that might not be enough.

While IRN Inc. industry analyst Erich Merkle likes the G8, especially its RWD drive proportions, he says the car lacks a truly American look that spells success for the Detroit Three in today’s market.

“The Ford Mustang is obviously American,” he says. “The Cadillac CTS is uniquely American. Consumers respond to that. They couldn’t articulate what it is if you asked them, but they see it on a subconscious level. Just look at the success of the Chrysler 300, another truly American design.”

Bierley is unsure whether CAFE has nixed future RWD programs at Pontiac but says GM is aware of the issues it presents, as well as the potential for gasoline prices to soon reach $4 a gallon.

“We certainly have an open eye to that and continue to evaluate our positioning: how we go forward and whether or not there is some opportunity to evolve Pontiac to be not just RWD performance but still be fun vehicles with an element of economy included.”

Bierley also says early evidence suggests a 50/50 mix between V-6 and V-8 engines on the G8, although the market appears to favor smaller-displacement vehicles.

GM, for instance, recently shelved plans for a new family of V-8s at Cadillac, citing significantly higher demand for its 3.6L direct-injection gasoline V-6 engine in the STS fullsize sedan over the available Northstar 4.6L V-8.

Ward’s data reinforces that trend. Last year in the U.S., V-8 engines accounted for 7.1% of all car installations by domestic auto makers, compared with 10.2% in 2006.

But Bierley says data from the G8 distribution process – dealers will order the G8 from a stock of “pattern orders” already in the U.S. rather than waiting for a specially ordered model from the factory – suggest pent-up demand for the V-8 powered GT version.

“Sounds like we made it up because it’s 50/50,” he says with a laugh. “But we expect the V-8 take rate to be higher initially and then settle down.”

The G8’s unique ordering process helps eliminate the chance customers could face an extended waiting period, a major complaint from buyers of the last-generation Pontiac GTO coupe that GM imported from Holden between 2004 and 2006.

“If there was one criticism we heard from the GTO, it was the length of time it took from when they ordered the car,” Bierley says, noting it took about 14 weeks to six months.

“We processed it. Sent the order to Australia. The car got built (and) sat until we got a boatload of them. They got put on the boat; prepped in the port; put on the train.

“Now we’re handling all that,” he says. “It could be as little as a couple of weeks. We’re making (the G8s) available, basically, as soon as they get put on the boat.”

Bierley also sees a brighter future for the G8 than its Aussie predecessor. For starters, he says, the G8 is a 4-door sedan, compared with the GTO coupe, which means it has broader appeal. “We’re fishing in a much bigger pond,” he says.

And while the GTO was a case of GM taking advantage of an existing vehicle (the Holden Monaro) to plug a hole in Pontiac’s portfolio, the G8 represents an example of the auto maker’s improved global product-development process.

By converging its engineering and design resources across the world, GM says it can gain economies of scale and save money, as well as shorten vehicle-development times, speed product redesigns and trim its worldwide architectures 50%.

“You will see more and more of this as we continue to develop programs that have a global footprint,” Bierley says. “(The G8) was contemplated early in the development process of the Zeta architecture, so it wasn’t an afterthought or an add-on product.”

Zeta also underpins the Holden Commodore in Australia, the Buick Park Avenue in China and the Chevy Lumina in the Middle East.

As for marketing Pontiac’s new flagship, Bierley says get ready for a full-court press, referring to an advertising blitz targeting the NCAA basketball tournament that begins this week and ranks as one of the division’s signature events.

“It aligns with a predominately male target 35-54 years old,” he says. “Spot-on. Couldn’t be better.”

An Internet promotion will accompany the G8’s television push, and Pontiac will have cars on display at the tournament’s regional, Sweet Sixteen and Final Four venues.

Bierley says Pontiac also is planning a “significant investment” in marketing targeted at the Beijing Summer Olympics, followed by the brand’s participation in NASCAR, the Grand-Am Rolex Series and NHRA drag racing. NCAA football will take G8 marketing through the fourth quarter.