The Chevrolet Orlando You Will Never See…

…unless you go to Europe!

Chevrolet Orlando show car: Not U.S. bound

Chevrolet contributes at least 70 percent of U.S. sales for General Motors. That isn’t likely to change unless buyers suddenly get a hankering for Buick and GMC or if Cadillac sales explode.

But that isn’t a bad thing either — when I rubbed shoulders with Chevrolet brass in Washington, D.C. last month as part of the Chevrolet Cruze national PR roll out, I learned that Chevrolet’s big slice of the pie is just fine with GM management. Why knock what works? And, Chevrolet is by far the strongest weapon in the GM arsenal, on sale in more than 130 markets worldwide.

Product Line

Top to bottom Chevrolet’s product line is new, significantly updated or soon to get refreshed. There are a few products such as the full-size Chevrolet Impala which could use an update sooner rather than later, but that hasn’t hurt Chevy.

The Cruze will soon replace the Cobalt and a smaller vehicle will slot beneath it in the near term. The Camaro is a wonderful halo model and strong coupe, Chevy trucks continue to sell well and crossovers such as the Traverse and Equinox are stylish, roomy and fuel efficient.

One crossover that will NOT be sold in the United States is the Chevrolet Orlando. Based on the platform underpinning the Cruze, the Orlando was supposed to be sold in the U.S., but GM later decided against it. Slightly smaller than the Equinox, but offering 7-passenger seating, the Orlando would likely compete with the Equinox for customers. And that is a big no-no for Chevrolet.

Orlando Absence

When I asked Chevrolet management about the Orlando (in this case Chuck Russell, who is in charge of GM’s small car operation), it was explained to me that GM doesn’t believe that every vehicle it builds needs to be sold all over the world.

The Orlando fits nicely with Chevrolet Europe’s product plans and will debut at the 2010 Paris Motor Show (Mondial de l’Automobile 2010) in October (press days are on September 30 and October 1). But there isn’t a need for the vehicle in the United States, thus its absence.

Chevrolet Europe has seen its sales slip this year over last, mostly due to the end of government-backed “cash for clunkers” type programs. With the Orlando’s introduction in early 2011, Chevrolet will have a model that should compete well across Europe. Powered by a 1.8-liter gas or 2.0-liter diesel engine, the Orlando will be one of four new Chevrolet models to make their Paris debut this year according to Automotive News.

Photo: General Motors Company

GM IPO Underscores Company’s Resolve

Quick! What unflattering label haunting General Motors is the company trying to lose? That would be Government Motors, a term coined by some following the Obama Administration-led bankruptcy filing on June 1, 2009.

Though GM quickly emerged from bankruptcy mere weeks later, their survival came at the expense of American and Canadian taxpayers whose governments poured more than $50 billion into the automaker in order to save it. Those monies plus a loan that has already been paid off by GM comprised a historic bail out of what still is one of the largest companies in the world.

Ever since restructuring, GM has been on a mad dash to remake itself and, apparently, is doing a good job of it. Cadillac, Buick, GMC and Chevrolet are the four remaining US brands with Saab sold and Hummer, Pontiac and Saturn retired. Of course, shareholders of the old GM have been left with worthless stock, seeing their once lofty investments turn to dust.

GM finds itself in a very uncomfortable position, thus its plan for an Initial Public Offering (IPO) of stock in order to raise $12-16 billion. On the one hand, the company is grateful that President Obama stepped in to save it. On the other hand, Obama’s poll ratings have tanked and this election cycle promises a power shift to the right.

Put off the IPO until next year and an emboldened Congress could put GM in an uncomfortable spotlight. GM is desperate to sell its cars and lose its government dependency label.  Though the IPO won’t erase that label entirely, it should help GM demonstrate that it is a private corporation and an important contributor to American (and Canadian) manufacturing.

GM also needs to get this stock offering going sooner rather than later as the economy threatens to retreat once again into a recession. The official unemployment figure is 9.5 percent, but that number does not include people who have stopped looking for work or others forced to work part-time until something better comes along.

GM also knows that the current 11 million annual U.S. car sales are a far cry from the 16-17 million units pushed in recent years, which means that the automaker must find a way to stay profitable with less. The automaker has proven that it is viable even during challenging times, an important edge GM does not want to lose.

GM stock, anyone?

Related Reading

Fortune: GM’s IPO: High Hopes and Deep Fears

The Wall Street Journal: Successful GM IPO Won’t Be Enough To Rev Up Entire Market

Rear Drive Big Caddy? Bring It On!

Whenever you hear buzz about this model change or that new engine or transmission, it is easy to dismiss such talk out of hand as rumors. After all, so many concept models never head to production and the plans touted by auto executives often gets curtailed or modified by top management.

Cadillac Replacement

Rumors that Cadillac would get a new model to replace both the STS and DTS have been dancing around for ages. Cadillac is in need of some serious new product although I must say that both its SRX crossover and CTS line are doing quite well, the former a surprise sale success while the latter continues to demonstrate that it is up to the challenge to take on Europe’s finest brands.

Left Lane News reported today that Cadillac is reconsidering what it has in mind for its next generation full size model, stating that Car & Driver believes that it will be a rear wheel drive model. Not just any RWD sedan mind you, but one that would carry the CTS battle up to larger models, perhaps offering a challenge to the BMW 7-Series and Mercedes S Class.

Hyundai Happenings

Here is a big reason why I believe that this report has merit: later this year the Hyundai Equus will roll out, a big sedan designed to take on the largest German sedans including the Audi A8 and the previously mentioned Mercedes and BMW models. Hyundai is effectively exposing Cadillac weakness because the DTS is aged and not competitive. Cadillac still needs to have a viable livery vehicle option and a car that can poach sales from competitors.

I also like the idea that a stretched version of the CTS Sigma platform would underpin the new big Cadillac. GM needs to contain costs and the CTS is a proven model. At least for the first generation DTS replacement such an arrangement might work out, before other options are considered.

In any case, moving Cadillac forward means looking behind the SRX and CTS, offering replacements for aged models including the STS, DTS and the Escalade. Yes, a hybrid model option would also help, especially as much higher fuel economy numbers begin to weigh in.