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.


More from Money Now

Tags: Autos
346Comments
Nov 27, 2012 5:54PM
avatar
Chevy has got to stop imitating there foreign competitors and go back to being chevy again, bring back the chevelle SS, nova ,bel air and make them look like the models of the past, with chrome bumpers.and moldings. just bring back the old classic look that we loved in the past. the impala, maliibu, and camaro is just the start, AND MAKE THE CORVETTE LOOK LIKE IT USED TO LOOK AGAIN!!!!
avatar
I had a Camry.  It was a piece of crap.  Serpentine belt broke, Water pump went and passenger side window would go down after 5 years. It also slid all over the road in the winter.  I live in Cleveland.  I now own a Chevy Malibu(2 Years ) and havnt had a problem with it.  The Japs must have been drinking Saki that day!!!!!!!!
Nov 27, 2012 5:48PM
avatar
Ever been to a Chevy dealership?  Was looking for a vehicle for my son. Went to Huyndaii, Kia, Chevy, Toyota, Nissan.  The ONLY dealership that seemed to have  been left in the 70's (any see the movies "Used Cars"?) was the Chevy dealership. A complete disgrace. I'm sure not all Chevy dealerships are that way, but wow....Another issue that Chevy has against Hyndai/Kia is the warrenty. The lower priced entry level vehicle market is very competative. Both Kia/Hyundai offer 5 YEAR bumper to bumper warrenties. The quality of the vehicles are very good, but they back them up. For someone who is buying a vehicle and wants to keep it w/o worry of major repair expenses, both are better financial risks than Chevy (or even Nissan / Toyota) due to the 5 year warrenty vs. a 3 year warrenty. If GM/Ford/Chrysler really want to get the attention of the American car buyer, back up the words with a 5-year warrenty.
Nov 27, 2012 5:46PM
avatar

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.

Nov 27, 2012 5:40PM
avatar
I personally own a 09 Sierra, I drove a ford before that for 20 years. Hands down, the GMC truck beats the ford in ride, comfort, power and gas mileage. I'll never buy another Ford truck.
Nov 27, 2012 5:40PM
avatar
I'm 22 years old and just graduated college in May, I had an 03 Dodge Neon and need a new car. Most of my friends seemed to go out and buy Scion TC's. After looking at them/riding around in them with a few of my friends I realized that I didnt like the cars much at all. I wanted something different that did better on gas then the TC's. Up comes the Chevy Sonic, which i first saw online and loved it as soon as I looked at it, as soon as i test drove it i was hooked. The next week i went to the dealer and picked up a new Sonic with the 1.4L Turbo and  I cant stop driving it! Got all the tech i need sat radio, blue tooth, ipod hookup, oh and the 40+ mpg does not hurt!
Nov 27, 2012 5:38PM
avatar
If I had to venture a guess. I would guess that you probably couldn't find an American car with out foreign parts since prob the mid 1980's
Nov 27, 2012 5:36PM
avatar
The biggest contributor to Chevy's sales decline is 20 years of fugly styling.  Harley Earl in the 50s and Bill Mitchell in the 60s designed some of the most beautiful Chevrolets ever.  It's hard to get excited about much of anything out of the Chevrolet styling department since 1970, except perhaps the C4 Corvettes.

There's just too much good competition out there.  Chevy need to step it up a notch or two.
Nov 27, 2012 5:32PM
avatar
Hope you go down Chevrolet.  You shut us down because you thought we weren't big enough.  Why aren't all your BIG dealers selling?  We were current with all our bills to you and regular vendors and you still shut us down along with all the other small dealers who could give the everyday people the better price.   Just because we were small.  Good for you.
Nov 27, 2012 5:32PM
avatar
GM was bought out by the Government.  I for one will never buy another GM of any type again. 
Nov 27, 2012 5:27PM
avatar
GM is still bloated with the Union having control and that will eventually be the cause of its demise.
Nov 27, 2012 5:27PM
avatar
I buy a new Silverado every ywo years and come out well trading up...try and do that with any other truck...and as far as maintance only oil and lube ...and thats no lie. Chevy trucks rock
Nov 27, 2012 5:23PM
avatar
Don't forget GM produces about 70% of their vehicles overseas.   According to Cars.com the top 2 selling "American" made cars are the Camery and Accord.  Of the top 10, 3 are Toyotas and 2 are Hondas.  Back in 2006 when I purchased a Ridgeline, I was mildly amused that it had over 80% American made parts compared to something like 70% for a Chevy Avalanche.
Nov 27, 2012 5:17PM
avatar
America is still love with muscle and retro designs. Look at the Camaro how well it's doing. The Monte Carlo of the 80's ('84-'87) which was a favorite at NASCAR and on the streets with it's 5 litre HO V8. They need to recapture what was tried and true to America. All of the imports from Japan, etc. all look alike in some form or fashion and GM followed suit. NO! Totally wrong to imitate. The electric car is out until you can manufacture it at a cost more affordable to the average driver. That ain't happening yet. GM is pricing themselves out of a market also thanks to the unions. This will always bite them in the **** and pocket book every time. The more demands and the more they give in, the more their vehicles will cost America. The imports don't have that burden to bear. The bailout preserved the unions and their take of monies. If they would of filed for Chapter 11, reorganization, you would of seen a leaner GM. You relected Obama to stay in bed with all unions and this is one of the big ones he must keep happy. They got him elected and he has to return the favor every day.  
Nov 27, 2012 5:15PM
avatar
What you mean OBLAMA wasn't the Savior (with ur money) after all??? Don't tell Jaime Foxx!
Nov 27, 2012 5:14PM
avatar

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.

Nov 27, 2012 5:14PM
avatar

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 !!

Nov 27, 2012 5:12PM
avatar
All my friends who insist on buying Chevy and Chrysler vehicles are the same ones always complaining their car is in the shop, or going back for warranty claim after warranty claim.  Hahaha.  Toyotas and Hondas last FOREVER, and you're not supporting union thuggery with their purchase!
Nov 27, 2012 5:11PM
avatar

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.

Nov 27, 2012 5:07PM
avatar

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.

 

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT BILL FLECKENSTEIN

Image: Bill Fleckenstein, MSN money

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.

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by:

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The headlines generally favored Tuesday being another good day for the stock market.  Instead, it was just a mixed day with modest point changes on either side of the unchanged mark for the major indices.

For the most part, the stock market was a sideshow.  The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex.

Dollar strength was at the heart of the weakness in ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.

RECENT POSTS

VIDEO ON MSN MONEY

MSN MONEY'S

MSN Mobile: Go to msn.com in your phone's browser.