Can GM revive Chevrolet?
A once-great American icon is losing market share. Can GM make Chevy attractive again?
Decades 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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After trying to deal with their customer service for 2 weeks I can attest to the fact they will be dead. They just dont understand that bad customer service=no customers. I have bought chevy's my whole life but will never do so again. I have had 5 actuators fail on my 2008 Tahoe and they refuse to pay for the replacement. A simple google search shows thousands of complaints but they pretend like they do not know their is an issue.
Compare a 2013 Malibu to a 2013 Toyota Camry and you will
see why Chevy holds a higher footing in quality then Toyota.
Go to the dealer and stop listening to the status quo.
A long time Chevy fan , It was time to trade my low mileage 95 Tahoe. The new Tahoe is a Dated vehicle with no engine options, The third seat cannot fold into the floor but has to be removed if you want the room .Clumsey and awkward very unstable , Very mushy . There is no deletion for the third seat . Finally bought a new grand cherokee with air suspension, 6 speed auto with a host of goodies that included a 5.7 hemi. It runs like a bear. My GM days are over I am extremely satisfied !!
Back in the day Chevrolet was considered the working mans car. What I have seen as time passed a large portion the Chevrolet dealer body went from high volume, low priced, to High end, High Profit cars. They seemed to want to sell one for a big profit rather than 10 for the same amount of profit.
I know Chevrolet/Gm got beat hands down in the entry level market primarily because of their dealer body.
Try finding a basic Chevrolet on a dealer’s lot. GM provides them but dealers won’t stock them. They would rather sell loaded to the hilt models like Cadillac Dealers.
Just like three years ago I wanted a New Avalanche, all the ones I could find in a 200 mile radius were all fully loaded. I could have gotten a Cadillac Escalade EXT for the same as they wanted for those Avalanches.
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ABOUT BILL FLECKENSTEIN
This column is a synopsis of Bill Fleckenstein's daily column on his website, FleckensteinCapital.com, which he's been writing on the Internet since 1996. Click here to find Fleckenstein's most recent articles.
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