Chevy Pits Cruze Against Corolla & Civic

How well does the Cruze stack up against the Corolla & Civic?

What is the most important Chevrolet product released over the past few years or soon to be introduced?

Some people may say the Camaro, as that vehicle put Chevrolet squarely back in the pony car game, pitting it against the Ford Mustang. Others might say the Equinox and Traverse as these two models have proven that GM can build crossovers which are at the top of their respective segments. The Malibu has shown Chevrolet’s midsize car prowess while the electrified Volt is likely to win honors as the most hyped product of our time.

Actually, none of these vehicles will likely have as much of an effect on the Chevrolet brand as its compact Cruze, set to be introduced within the next month. Replacing the bland Cobalt, the Cruze is everything a compact sedan should be and more: stylish, roomy, well appointed and highly fuel efficient. The latter two attributes have rarely been seen in a GM model of this size, but the 2011 Chevrolet Cruze is about to change that.

Cruze Confidence

GM is confident that the Cruze has what it takes and is urging its dealers to buy at least one car each from its top competitors — the Toyota Corolla and the Honda Civic. In July, when GM introduced the Cruze to the national press corps in Washington, D.C., we were able to drive the Cruze, Corolla and Civic back-to-back for comparison purposes.

My personal observation of all three has the Cruze on top, which is what GM hopes Chevrolet shoppers will also conclude.

Of course, there is always a risk that customers will choose a competing model especially when those vehicles are showcased front and center at a local Chevrolet dealership. However, that means you are confident that your product is better than the rest and not a mere equal. And, judging by its clean and well appointed interior, superior gas mileage and midsize car roominess, GM finally has a product it doesn’t have to make an apology for.

Cruze Importance

Cobalt sales have hovered around 200,000 annual units from 2005-2008 which is the floor Cruze sales should hit despite ongoing economic weakness. Ideally, Cruze sales will be much higher, perhaps approaching levels reached by the Cavalier during the 1980s when sales peaked well above 400,000 units annually.

Yes, stiffer competition and more of it will be a factor, but if Chevrolet can siphon some sales from Toyota and Honda while giving customers a reason not to purchase the upcoming Ford Focus, the current Hyundai Elantra or the Nissan Altima, then a middle ground number seems likely.

That net increase could put Chevrolet ahead of Ford and within striking range of Toyota, currently the best-selling automotive brand in the United States.

Photo Credit: General Motors Company

As Expected, August 2010 Auto Sales Sink

All throughout the month of August, reports that the month’s auto sales would plunge surfaced time and again. This reporting was wholly unnecessary or at least overdone as an obvious factor was kicking in: August 2009 was “Cash For Clunkers” time, therefore any comparison with last year would be skewed by that federal government rebate program.

But, comparing month over month figures is how the industry rises and falls even when the numbers are skewed. One of the first to issue their sales report was Volkswagen who cut to the chase in the title of their news release: year to date sales are up by 21 percent. On closer scrutiny, Volkswagen revealed that monthly sales fell by 7.9 percent over August 2009.

Monthly Losers

Nissan went straight to the point with their news: sales fell 27 percent for the month although year to date sales are still up by 14 percent. Honda sales fell by 30 percent, but the Japanese automaker says that it is still ahead of last year’s pace though that lead narrowed to just 1.5 percent.

Toyota sales dropped by 31 percent which means that the world’s largest automaker has fallen behind last year’s year-to-date pace by 6,000 units. Blame all the recalls and bad publicity with having a net drain on Toyota whose position as the world’s largest automaker is in jeopardy regardless. Volkswagen, perhaps even GM, may unseat Toyota this year.

Fab 3

How did 2009′s winners do in August? That would be Subaru, Hyundai and Kia, the only automakers who saw their sales rise in a very depressed market.

Subaru’s sales fell by 22 percent, but they’re still up by 20 percent for the year. Hyundai reported that its sales fell by 11 percent, yet the Korean automaker is still up by 17 percent for the year and on pace to establish yet another sales record. Kia, Hyundai’s cousin, registered a 20 percent decline for the month, but they’re still up by nearly 10 percent year to date.

Detroit 3

The Detroit 3 reported mixed sales results with Chrysler sales increasing by 7 percent for the month and are now up by 10 percent for the year. Chrysler’s rise wasn’t a surprise as it basically had to sit out of  last year’s incentive programs as it recovered from bankruptcy and sought to restart production.

GM sales fell by 11 percent for its four surviving brands though the largest domestic automaker is still up by 5.4 percent for the year. Ford sales also fell by 11 percent, but the automaker is still up 18 percent for the year.

The Rest

Daimler reported sales up by 7.4 percent for the month, though when breaking things out by brand Mercedes was up 10 percent while Smart fell by 72 percent. Mercedes is capitalizing on Lexus’ woes and may regain the top luxury marque spot from its Japanese nemesis this year.

The BMW Group fell by 1.6 percent but is up 5.6 percent for the year. Mazda fell by nearly 26 percent, but they’re up by 7 percent year to date. Other manufacturers were still tabulating their figures when Auto Trends went to press with this article.

The Meaning

What does August 2010′s sales mean? Not a whole lot. Cash for Clunkers was a hard month to go up against, so a significant drop was expected. Going forward, a stale economy may keep sales down for the rest of the year, underscoring that the battered American consumer will be careful when and if they buy a car this year.

Sources: Automaker News Releases

GM Loosens Opel Reins

Opel to be sold beyond Europe

General Motors is down to managing four brands in North America now that Pontiac, Saab, Saturn and Hummer have been sold or shut down.

Cadillac, GMC, Chevrolet and Buick comprise its North American brands, but the company also owns Holden (Australia), Daewoo (Korea), Vauxhall (UK) and Opel (Europe). Holden and Daewoo are sold beyond their local markets, but Opel is not. Vauxhall is Opel in the UK and other markets, selling the same models under a different brand.

Up until now, Opel has been sold only in Europe. Its cars, which have been reworked and sold in the United States as the Saturn Astra, Buick Regal and Chevrolet Cruze, are a good fit for other markets, but GM has kept tight reins on the brand. However, that is about to change.

Opel Initiative

According to Crain Communication’s Automobilwoche (Automobile Week), a sister publication to Automotive News, Opel will soon be sold in China. GM has been enjoying a booming success in China where its Buick brand is a national darling. Chevrolet is sold there too as are some Daewoo products.

Interestingly, Australia is another market where the Opel brand is slated to be sold. That’s Holden territory, but the products likely to be sold down under should be different. Indeed, although the Opel Astra inspired the Holden/Chevrolet Cruze, they are not the same cars. Conceivably, Opel could sell the Astra there too.

Other Markets

Opel will also be selling its cars in two unidentified South American market and one unnamed Asian market besides China. Likely, some of those models will compete against existing GM brands which could present a problem for GM if the Opel introduction isn’t carefully managed.

Following its 2009 bankruptcy filing and reorganization, the General Motors Company has been on a fast track to remaking itself.  In North America and elsewhere, capacity has been realigned to match demand, reducing model availability to their lowest levels in memory.

Opel China

Opel isn’t entirely knew to China as Automobilwoche reports that its cars have been on sale there since mid-2009, with 4,000 units sold. That’s chump change in the world’s largest consumer market, something GM will rectify when the import reins are loosened.

Expect GM to continue to look at new markets for Opel, but the United States and Canada won’t be considered. GM has learned its brand management lesson and is doing what it can to bolster its four surviving North American brands.