General Motors solved one problem this week by reaching a deal with the United Automobile Workers. Now it hopes its new Chevrolet Malibu will help solve another: winning sales and market share back from its Japanese rivals.
A new Malibu is intended to end Asian supremacy in midpriced sedans.
For years, family sedans have been a lower priority for General Motors and the other Detroit automakers. They focused instead on big trucks and sport utility vehicles, which earned tidy profits, while letting Toyota and Honda dominate the less lucrative market for cars.
But the best days for the big vehicles have passed, and G.M. is eager to break the Asian stranglehold on midsize sedans by offering a redesigned Malibu. The car is set to go on sale Nov. 2, and the automaker views it as its most important vehicle in years.
G.M. is spending $100 million to introduce the new Bu, as executives call it, significantly more than the costs for any other car in recent memory. It has to invest heavily, experts say, to make a dent in the market led by the Toyota Camry, the country’s best-selling car for the last seven years, and the Honda Accord.
“It’s tough to get the broad American public to reconsider an American car in that price class,” G.M.’s vice chairman, Robert A. Lutz, said at an industry conference in northern Michigan last month. “The Camry and the Accord have established, and justifiably so, such strong brand value, which means that you’ve got to have a really outstanding car.”
While the Malibu may be improved, so is its competition. This month, Honda began selling a redesigned Accord sedan that is bigger, more powerful and more luxurious than previous versions. The Camry and the Nissan Altima were also overhauled last year.
Honda executives, for their part, say they are not worried about the revamped Malibu. Gary Robinson, senior product planner for the Accord, called it “pretty secondary to what we consider our primary competition.”
Chevrolet dealers, who have had difficulty in the past pushing Malibus off their lots without incentives, say they are excited about the 2008 version, even though few have actually seen one.
With S.U.V.’s no longer pulling as many consumers into their showrooms, dealers have been clamoring for a car that they can steadily sell in large numbers.
“It’s that one segment that’s going to decide how successful you are,” said Travis Jackson, sales manager at the Chevrolet of Naperville dealership in suburban Chicago.
There is plenty of room for growth. Last year, G.M. sold 138,110 of the previous version, but about 40 percent of those went to rental companies. In comparison, Toyota sold 417,104 Camrys, and Honda sold 348,843 Accords. Only about 5 to 10 percent of those sales were to fleet purchasers.
G.M.’s quest for a Camry-Accord fighter has been a long battle. Malibu’s sister car, the Impala, sold nearly 290,000 last year. Unlike their Japanese counterparts, G.M. executives want to sell more than one midprice family sedan.
G.M. will not reveal its production or sales goals for the Malibu, but anything close to the current model’s numbers would be deemed a failure. At one point in the development process, G.M. even considered dropping the Malibu name in favor of something new that might avoid any negative connotation for consumers.
Malibu started out in 1964 as the name for Chevrolet’s top-level midsize car, a version of the Chevelle. It quickly became a hit, selling millions before being discontinued in 1983. G.M. resurrected the Malibu in 1997, but the car has never seriously challenged the Accord and the Camry, which have been at the top of their segment since then.
“The Malibu name might be stale,” said James Edwards, general manager of Heritage Auto Plaza, a Chevrolet and Chrysler dealership in Alexandria, Va. “If you put a Honda Accord out, you know you’re going to sell it. But a Malibu, you really don’t how it’s going to do.”
Chevrolet’s general manager, Ed Peper, insists that the new Malibu “will speak for itself” and will not be hurt by its name, which he says is one of General Motors’ best-known trademarks.
“There is absolutely nothing wrong with the name,” Mr. Peper said. “We’re going to deliver the finest Malibu that we’ve ever delivered.”
G.M. acknowledges that its position as an underdog in the sedan segment means the Malibu cannot be simply as good as competing models — it has to be better. “We built this vehicle to be the best midsize car in the marketplace, period,” Mr. Peper said. “We’re going to deliver more to consumers in this package than any other midsize car.”
The company has spent months aggressively promoting the car. It released a photo of its two-toned interior late last year, even before it put the 2008 model on display.
The new Malibu, with a low stance and gently curved roof, is sportier than its predecessor. There was even a Web site created to sing the praises of the 2008 version.
G.M. has not allowed critics who have driven the Malibu to publish their thoughts yet, but the car received mostly positive coverage at the Detroit auto show last winter.
“The nice surprise here is the car’s striking styling — something we haven’t seen in a Malibu since, er, the ’64 original,” wrote Howard Walker in Car and Driver.
Another auto writer, Rich Ceppos, said the new Malibu “promises to be everything that the previous model was not: stylishly dressed inside and out and as roomy and smooth-driving as the class-leading Honda Accord and Toyota Camry.”
“Exterior fit and finish, quality of interior materials and driving refinement all take a big stride forward,” he said.
G.M.’s goal, Mr. Peper said, was to make the Malibu look as if it cost double the $19,995 starting price. (That is about $2,000 more than the 2007 model.) A gas-electric hybrid Malibu will start at $22,790.
Mr. Peper said G.M., which lost its long-held place as the world’s largest automaker to Toyota this year, is not intimidated by its position as an underdog in the sedan market.
“We relish that position; we look forward to competing with them,” Mr. Peper said. “They will know by the product that we are going to put in the marketplace that they’re going to have some competition.”
Source: New York Times, 9/27/07
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