Can GM revive Chevrolet?

A once-great American icon is losing market share. Can GM make Chevy attractive again?

By Bruce Kennedy Nov 27, 2012 10:35AM

A young man admiring a new car -- i love images/Cultura/Getty ImagesDecades ago, Chevrolet used to brag that it was as American as baseball, hot dogs and apple pie. But these days, America is moving on.


General Motors (GM) has seen slumping sales of its all-important Chevrolet line. The brand is reportedly losing market share to Chrysler, Toyota (TM), Jeep and Volkswagen (VLKAY). Chevrolet only had 13.2% of U.S. auto sales in the first half of this year -- down from 14.3% a year earlier.


Chevrolet has been a drag on GM in the two years since the automaker emerged from bankruptcy and returned to the markets. Still, GM's October U.S. sales were the highest they've been since 2007, with deliveries up 5% from to a year earlier and sales to retail customers up 7%.


GM can't afford to lose Chevy. So in this evolve-or-perish market, it's choosing to evolve by reinventing its brands.


The company will replace 70% of its U.S. nameplates with redesigned or all-new vehicles over this year and 2013. And the Chevrolet is the focus of many of those changes.


"They really started by revamping their entire product portfolio from top to bottom," says Alec Gutierrez, senior market analyst at Kelley Blue Book. And he points as examples to the redesigned Chevrolet Malibu, the new Impala scheduled for 2014 and the rebirth of the Camaro muscle car.

 

At the same time, Chevrolet and other U.S. automakers are aware that American consumers are buying smaller cars and paying attention to innovations like all-electric cars and compact SUVs. Despite its sales slump, Chevrolet is still GM's top-selling brand, and is taking the lead in innovation and change.

 

"A lot of people were curious as to why (GM) launched the Volt, a $40,000 premium electric vehicle, under the Chevrolet moniker and not, say, under Cadillac or even under Buick," Gutierrez says. "But I think it just proves GM's commitment to the Chevrolet brand as… a green-friendly company, on the cutting edge of technology. I think they're really trying to redefine what that brand means to consumers."


Gutierrez believes Chevrolet vehicles are currently on a par with its competitors, domestic and foreign, when it comes to quality and options. The big challenge for Chevy and its rivals, he says, is the rise of what were formerly second-tier companies in the U.S. like Hyundai (HYMLF), KIA, Volkswagen, Subaru and Mazda (MZDAF).


"The level of parity in the industry is so strong that you're going to see, in these high-volume segments, the market share becoming more and more diluted across all brands, versus someone like a Chevrolet or even a Toyota really dominating any given segment," he says. "I think segment share is going to be more evenly distributed among the major players as everyone kind of comes up to the same competitive benchmark. "

 

Chevrolet will soon get a new addition to its lineup in the Spark, an all-electric mini-car that will go on sale this summer in California and Oregon. The five-door hatchback is only about 145 inches long, the Associated Press reports. By comparison, Toyota's new Prius C is about 157 inches long.


Will Americans flock once again to a completely redesigned Chevrolet? The company is overhauling 13 Chevrolet vehicles in the next year. It's a risky move, but one that could make Chevy hot again.


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Tags: Autos
347Comments
Nov 27, 2012 5:07PM
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Sorry to say, Chevrolet's cars are ugly (except for the Camaro).  If they hope to save the Chevy line they had better start by making better built and better looking cars.

 

Nov 27, 2012 5:03PM
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I thought the government takeover of GM fixed Chevrolet.  What? You mean the government cannot run a business!!!!! This does not bode well for Obamacare.
Nov 27, 2012 4:58PM
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With all the computers necessary to make a car run today I'm just wondering when will Apple finally launch a vehicle? The iCar maybe?
 
Nov 27, 2012 4:57PM
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This is pure ignorance!  You'd rather buy a car from a foreign automaker than buy a domestic vehicle which has labor ties all through its supply lines.  Toyotas are assembled in the USA, not manufactured.  There is a difference.


USA Loyal
Nov 27, 2012 4:56PM
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1st there are no 2 door Avalon, second toyotas are built in america with the highest % of american parts of an auto company, the avalon is the single most american made car sold. 2nd the "bailout" saved not only gm. but the hundreds of companies and millions of jobs needed to produce and deliver and service there goods, this saved america and your dollars from a full depression, also gm is far ahead of schedule for repayment. the far right has a habit of listening to what they want to hear, facts are secondary. Now you can start your ignorant reply's.
Nov 27, 2012 4:51PM
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Haha, can GM revive GM....probably not.
Nov 27, 2012 4:49PM
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Chevy has been junk for 40 years.  They lost my business in 1982.  I might have reconsidered until Obama touched it.  It's like your wife sleeping with another man.  Obama put the kiss of death on the brand.
Nov 27, 2012 4:41PM
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AS long as Ben keeps printing the bucks, GM & Chevrolet will not be allowed to go under (too big to fail).
Nov 27, 2012 4:39PM
Nov 27, 2012 4:35PM
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GM should have gone bankrupt without the bailout (like thousands of small companies in the construction industry did after the bubble burst) and liquidated their remaining assets.  Just like how somebody will buy the rights to make Twinkies, somebody would buy the rights to build Silverado's, Tahoe's and Corvettes; the only vehicles GM should be producing.  

Nov 27, 2012 2:58PM
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If you look Chevrolet is still missing a few key niche vehicles to have a full lineup that will help its sales out.  How many 2 door cars does Chevrolet have?  2.  Camaro and Corvette.  Cruze is 4 door only.  Corolla and Civic are available in 2 door trims.  You can get the Avalon in 2 door.  No 2 door malibus or Impalas. 

 

What is hurting Chevrolet is that GM has cut down on their rental sales where as Crapsler and Toyota have increased theirs.  Crapsler has over 35% of its sales to rental companies. GM is under 20% and the biggest one is the Impala.  When the 2014 Impala comes out GM wont have a single Chevy that has 15% rental sales.   

Nov 27, 2012 2:54PM
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The Chevrolet Equinox is Fantastic !!  Looks like a mini-Tahoe !!   32mpg !!!$$$$$$$$$$$$$$$$$$$$$$$
Nov 27, 2012 2:32PM
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GM is finished and we paid fot it. Thanks Obama

 

 

Nov 27, 2012 1:35PM
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I agree with rtgsc----I bought a new Ford--since they did not take a bail out from Obummer!!!
Nov 27, 2012 1:03PM
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I will NEVER buy a Government Motors car.  They owe the taxpayers billions!!!  Love my American non-union built Toyota that will outlast any GM!!!
Nov 27, 2012 12:16PM
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throw more money at the problem, it will fix it, i promise 
Nov 27, 2012 12:08PM
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The 2013 Chevy Impala is hot.They`ll be winners again.The Volt is a disaster however.
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