By on April 5, 2007

too-little-too-late.jpgIt’s déjà vu all over again. GM’s sales sink, the PR flacks weave a tangled web and the product guys dangle shiny objects in front of the easily distracted press to prevent them from focusing on the company’s ongoing, unstoppable rot. It’s got to the point where Buickman, the original tin foil hat guy, can’t be bothered to pen his usual protracted rant. All we get is three sentences, the first of which proclaims “Need anything more be said?” Well, yes actually. It’s time, once again, to talk about small cars.

It’s no revelation that GM is, was and will be ill-prepared for rising gas prices and increasing demand for smaller, high mileage vehicles. Back when they launched their “new” GMT900 based SUV’s, ttac.com (and everyone else) pointed out that The General had arrived late to the high mileage ball dressed in an oversized clown suit.

That was over a year ago. By now, GM should be at least two years into a small car project (or five), getting ready to stun the market with a Fit-killer, a Versa adversary and a Yaris crusher. And?

And now Chevrolet is running an on-line competition where consumers can choose between three foreign-made mutant micro-cars: the Beat, Trax and Groove. You know, hypothetically. ‘Cause they’re concept cars.

For the next two years, consumers looking for GM’s mark of excellence on a high mileage vehicle are still left with a choice of fuel-gargling SUV’s and pickups, marginally less thirsty crossovers, a wide selection of anemic rental grade sedans, a couple of ergonomically challenged toys (a.k.a. roadsters) and a small range of joyless (if frugal) penalty boxes.

Remind me again: who’s surprised that GM’s March sales are off seven percent from last year, while Toyota’s climbed 11.7 percent, Honda grew by 11.3 percent and Nissan increased 7.8 percent? Well, no one really– save those misguided souls who think the inherently unprofitable (and anemic) Opel Astra will take the US market by storm.

Nope. The miscalculations of the past continue to haunt GM, arguably the least agile automaker on the face of planet earth.

This is the point where I usually trot out one of GM Car Czar Maximum Bob’s inane auto show pronouncements, illustrating the fact that GM is so far behind the curve they’d almost be better off waiting until motoring trends come full circle. Something like, "The real question is will we build these types of vehicles in the U.S.? Historically, these types of cars haven't done well here. But clearly, things are changing."

Normally, I’d segue into a statement about GM’s inability to catch up with the transplants’ constant evolution with timely, segment leading products. But I've discovered a far better example of The General's general cluelessness and temporal distortions, courtesy of GM’s vice president of global design.

"I think American, and [I think] big," pronounced Ed Welburn at this year's New York Auto Show. ”Big has been very much a part of America. The highways are wide, the parking lots are quite large, but the interest level is there for a smaller car…

“I think it is time, especially as people are looking for a unique offering, to be a very creative, or to at least look at a very creative offering in the small car category."

Ed is certainly a corporate survivor, but who knew he spent the last five years as a survivor on a desert island, away from the U.S. automotive marketplace? GM's going to “look" at the "possibility" of building a creative small car? As John McEnroe would say, YOU CANNOT BE SERIOUS!

He is. They are. Incredibly, a full year into an unstoppable downsizing trend amongst American car buyers, GM’s still “thinking” about the whole small car thing– while the transplants are busy gorging themselves on The General’s lunch.

Given the now familiar litany of lost sales and declining market share, this parlous state of affairs leaves GM PR flacks without a coherent story to tell. In other words, there’s spin to be spun.

“In March, we saw continued strength and stability in our retail business led by gains in mid-cars, crossovers, economy cars and luxury SUVs," said Mark LaNeve, vice president, GM North American Sales, Service and Marketing.

"The Chevrolet Silverado, GMC Sierra, Acadia and Saturn Outlook are exceeding our expectations and confirm that when you offer the best product, value, segment-leading fuel economy and the best warranty coverage in the industry, customers respond."

While we’re happy GM’s exceeding their own “expectations” (a meaningless measure if ever there was one), and we’ll defer to Frank Williams' monthly “By the Numbers” editorial to provide the obvious truth behind the hype (a few bright stars do not a universe make), suffice it to say LaNeve’s recipe is spot on. In fact, The General’s competition is using it right now to kick GM’s ass.

When will they ever learn? Never. They will never learn.  

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67 Comments on “General Motors Death Watch 115: Small is… hang on… thinking…...”


  • avatar
    shaker

    If the General doesn’t get in the groove, buyers will make trax for the updated Honda Fit; then, they’ll really be beat. (sorry)
    The only way this idea could possibly work is with a universal platform (just develop the body/interior in a year), wihch is still a gleam in GM’s eye…

  • avatar
    GS650G

    I’m in the market right now for a car and nothing they make appeals to me. I needa commuter beater car for around 15k and there is nothing they could do to convince me to spend it on a chevy or anything else.
    Ford has a few ideas but bad experiences have left a sour taste for their cars. DCX cars are just too ugly and I think M-B will jettison them this year, not a good thing for their customers.

    Hyundai, Kia and Suzuki offer real long warranties on their cheap cars, while not world class sedans and hatchbacks, at least someone will fix it while you pay it off.

  • avatar
    troonbop

    there is something unique, catchy, about the econo offerings from the transplants. I have no idea how they do it, but 2.5 offerings just seem cheap.

  • avatar
    Tavert

    How ironic that Beat was the name of a Japan-market Honda kei-car in the 90s. Those were some of the coolest tiny 2-seaters I’ve ever seen, like a 3/4-scale MR2. The Japanese have been making good, mainstream small cars for decades, they’re used to it. It’s not GM’s fault that the American people were so slow to downsize, but they certainly are getting hurt in the process.

  • avatar
    SherbornSean

    I went to GM’s web site to vote for the Beat, but Sanjaya won there too.

  • avatar
    Sid Vicious

    Has anyone at GM priced a VW TDI, new or used, recently. You would swear they’re made of gold. And diesel is basically $3/gallon in SE Michigan. And Michigan is talking about raising fuel taxes by a dime or so to fix their roads which are now outclassed by Mexico’s.

    So even though econo-boxes may never sell in GMT900 volumes, they’re obviously worth it if executed properly. Detroit just can’t think in volumes of less than 100,000. And they just can’t think small.

    How can the people on this site have the vision to see the potential of a fun to drive, high quality, 45 MPG turbo-diesel car/small SUV while at the same time GM’s legions of MBA’s are so absolutely clueless.

    They will never, never, never learn.

  • avatar
    cheezeweggie

    How can you be so critical ? GM is on their way to fuel economy nirvana. Heck, who else could replace their delco alternator with an electric motor and called it a hybrid ?

  • avatar
    Glenn A.

    GM tried. In fact, as the joke goes “GM was VERY trying.”

    VEGA. This was engineered at the pinnacle of GM’s success. My God, I could stop my comments right there, couldn’t I? But I can’t resist…

    So what kind of wondrously craptastic heap do you suppose they could afford to engineer now after they’ve sold of virtually all of the family silver?

    I suppose they could just do what they’ve done since the late 1950’s for these “nuisance” small cars (except for the infamous Corvair, Vega, and Citation experiments of course).

    1958 – Oldsmobile dealers got Vauxhalls for a couple of years, to (try to) sell for forestall the Volkswagen phenomenon, and Buick dealers got Opels, which at least lasted for a couple of decades of minor “success”.

    1971 – Isuzu started providing the “LUV” pickups for Chevrolet. They looked like a Studebaker pickup that’d gone through a hot-wash twice.

    Later, Suzuki and even Toyota (through NUMMI) were (are – NUMMI) also tapped for some small cars. Pontiac Vibe, anyone?

    Now, flavor of the decade is GMDaewoo. Maybe GM could just start selling South Korean built “Chevrolet” Tacuma (Rezzo/Vivant), Spark (Matiz), Optra (Lacetti/Nubira)and Epica (Tosca) as they are in much of the rest of the world.

    See for yourselves

    http://www.globalautoindex.com/maker.plt?no=2295&g=Daewoo%20(GM)

    Of course, GM might have the public crying foul when and if they see the cheaper Chinese Chery built QQ badged as a Dodge down the street, looking nearly identical to the Chevrolet Spark. But don’t worry, the Chinese courts held that there was no theft involved by Chery…

    Let’s face it, GM’s heart is not and never has been in small cars, for the United States. It may well prove to be the final straw that breaks the giant’s back.

    Whether we (the US) go to war against Iran is probably critical to the potential survival of not only GM but also Ford and Chrysler, because if the Straits of Hormuz get cut-off even for a short while, we all know what will happen to gasoline prices in the US (and worldwide), to the worldwide economy and to large profitable SUV and truck sales in North America….

  • avatar
    BostonTeaParty

    The cars look great, the future is small vehicles, they may be late but at least the generals bringing a bottle to the party. Wheres the problem? 

  • avatar
    philbailey

    America makes a pretty good grandfather clock, but please, don’t ask them to build a swiss watch.

    In the meantime, the Cobalt reliability is proving to be no better then the Cavalier and the Korean knock-offs are just awful.

    Vauxhall and Opel have all the expertise, but because it isn’t Detroit expertise it just gets ignored.

  • avatar
    SherbornSean

    Two interesting sets of figures came out this week. The Union of Concerned Scientists published their Green Rankings of major auto manufacturers:
    1. Honda
    2. Toyota
    3. Hyundai
    4. Nissan
    5. VW
    6. Ford
    7. GM
    8. DCX

    And, March US sales data came out:
    Honda: +7.3%
    Toyota: +7.7%
    Hyundai: -1.0%
    Nissan: +3.9%
    VW: -0.0%
    Ford: -12.2%
    GM: -7.7%
    DCX: -8.0%

    What an interesting coincidence – the greenest carmakers are also the ones gaining sales. So maybe destroying the environment isn’t so great for big corporations after all.

  • avatar
    Sid Vicious

    More fuel efficient vehicles are coming one way or another. Detroit has always said “We only build what the customer demands.” When gas is $4 or $5 gallon the customer is going to want 45 MPG. So legislate it or let the market and geopolitical events drive it. It doesn’t matter.

    Maybe most here are too young to remember the 70’s. The content on cars was absolutely spartan compared to today. Yes – most people got by without A/C. So if future legislation “unfairly targets” Detroit automakers by adding $4K variable cost to each vehicle, then we can take out power everything, A/C, about 150 of the 350 HP, and on and on. So – this automotive engineer is saying that we can take out $4K cost from the average vehicle and still have it be safer and more efficient than today. For Pete’s sake, Ford is school girl giggly over the refridgerator that will be available on the Flex. Who the hell needs that? What happened to the 6 pack Styrofoam cooler for the roadtrip?

    In short – the future is efficiency and it doesn’t need to price anybody out of the market who currenlty buys new cars. Those with the money can still have their effin’ toys if they want them.

    Enough whining. Shut up and do it. Or die.

  • avatar
    geeber

    Sid Vicious: Yes – most people got by without A/C. So if future legislation “unfairly targets” Detroit automakers by adding $4K variable cost to each vehicle, then we can take out power everything, A/C, about 150 of the 350 HP, and on and on. So – this automotive engineer is saying that we can take out $4K cost from the average vehicle and still have it be safer and more efficient than today.

    Throughout most of our history, we also got by without indoor plumbing, or central heating, in our homes.

    I have no intention of giving up either one.

    Same with air conditioning and power “everything” in my vehicle.

    I learned to drive in the late 1970s on vehicles without air conditioning. I have no desire to repeat the experience. And I’m not going to limit the ability to afford these “toys” (actually, I consider them to be necessities) to those “with money.”

  • avatar
    jerry weber

    Bob, you always are right on about sales stats, but how do they say, figures don’t lie but liars figure. If I read for one more month that all of this sales downturn is because of reduced fleet sales I’ll throw up. It’s this simple fleet sales or no fleet sales if gm had to run all of those blizzards of models and divisions with less sales this year than last, how can this be profitable? When there one time pickups from extraordinary income are finally gone, will the cash drain stop? Even here there are hiccups, they sold gmac with all that sub-prime mortgage paper on which they booked substantial profits in the last couple of years. Now they have to give back 1 billion to cerebus they new partner in gmac because of losses there. Delorenzo said this week gm finally has product but no distribution. I submit they have too much product and distribution for a company going down in sales.

  • avatar
    jthorner

    “arguably the least agile automaker on the face of planet earth.” No way, Ford has to take that crown. Ford is so busy doing nothing right now it is weird. Panther replacement plans, duh, we don’t know. Cheap small car competitor for the US, duh, we don’t know. Updated compact truck … do we still make those? GM is making all minds of mistakes, but at least there is the illusion of trying.

    GM’s biggest strategic problem remains the too many brands, too many models, too many dealers issue. I don’t think even the GM top brass can keep all of the active models in their heads. How is the consumer supposed to sort it out.

    GM should just contract out the design and building of a small car to one of it’s Chinese partners and call it a day. In fact, to survive, GM is going to have to replace it’s lineup with imports one at a time starting at the smallest, cheapest end of the scale and working their way up the product line. GM also needs to ditch the Buick and Pontiac brands right now. They don’t add anything to the party which Chevrolet, Saturn and Cadillac can’t easily cover. Even the argument for Saturn moving forward is questionable. GMC should only stick around if they are going to once again get serious about larger than 1 ton trucks.

  • avatar

    geeber:

    Sid Vicious has a point – there are some of us out there who don’t necessarily need air conditioning, power windows, in-car coolers, etc., etc., etc. for our daily transportation.

    I normally commute by motorcycle. On the bad weather days when I take the S-10 to work instead, I open a window, not turn on the air conditioning. And I don’t mind turning a crank. Actually, my air conditioning has been used so seldom in the past six years (invariably the wife’s riding with me) that the compressor has virtually died – and I didn’t notice.

    My idea of a real commuter car? Give me back my then-girlfriend’s Geo Metro, three cylinder, five speed, add in front airbags and to hell with all the rest of the current coddling protect you from yourself stuff. That car was wonderful in traffic, did OK on the rare occasion we’d use it for 200 mile trips, and was wonderful in rush hour on Philadelphia’s Schuykill Expressway to the point that I actually enjoyed those rush hour commutes.

    Oh yeah, further apostasy: I consider a radio/sound system optional, too. Don’t need one on the Trident or the Springer, don’t need one in a car, either.

  • avatar
    boatschool

    Mark LeNeve was on Imus’ show this morning. When asked about Toyota he said ‘last month we sold as many cars as Toyota and a lot more trucks.”

    As I read the stats, in March Toyota sold 140,009 cars and GM sold 136,866. Toyota has been narrowing the gap in car sales vis a vis GM for quite some time. I have to believe that GM’s top marketing guy and every other GM senior exec and board member are acutely aware of the exact number of cars GM and Toyota sold.

    LaNeve’s gratuitous and erroneous statement is symptomatic of the denial, indeed arrogance, that got GM into the jackpot they’ve been trying to work their way out of for years.

    Concur with LaNeve’s statement that GM sold ‘a lot more trucks’ than Toyota last month. That said, the trend in trucks is very reminiscent of how cars started trending some years ago – Toyota up slightly on a smaller base, GM down noticeably on a larger base. Ugh…I think I sat through this movie before and know the ending.

  • avatar
    philipwitak

    we all love cars or we wouldn’t be reading, and posting to, ttac.

    but the handwriting is on the wall. and the pollution is in the air. and in the water. and all throughout the land. [and the next portion of the 2007 ipcc report on climate change is expected to be released this friday]

    current conditions – like many traditional attitudes automotive – are simply not sustainable. one way or another, everything is going to change and most probably much sooner than we imagine. but the impact of this change won’t only be limited to motor vehicles and it doesn’t have to mean the end of interesting and enjoyable forms of transport. these new vehicles, however and for the most part, will be quite different from the poor-milage, pollution-spewing, gargantuan-proportioned, high-horsepowered vehicles of today that so many drivers apparently prefer.

    like the old rush song states: “…changes aren’t permanent – but change is.” the wise among us will recognize the new reality confronting mankind, prepare accordingly, manage their own expectations successfully and adapt.

    the unwise will be condemned and forever frustrated that things didn’t/couldn’t remain unchanged.

  • avatar

    “Rich people don’t care about gas prices,” Bob Lutz.

    Uh, well, it seems that rich people can’t save a company as large as GM.
    If they’re only now taking a bead at making a good small car for the US, then they really should all be dropped down the memory hole and forgotten.

    Honda is zipping away on the very “simple” premise of having the most fuel efficient and green vehicle in every category. And they’re succeeding, aren’t they?
    What’s GM’s premise? The biggest car they can get away with selling in each category?

    The solution? GM has to leap a generation, and blaze the trail when it comes to the future of automotion. Will they do it?
    Not with the crew presently in charge.

  • avatar
    Robert Schwartz

    If I had a litter of puppies that ugly, I’d put ’em in a burlap bag and toss it into the pond.

  • avatar
    Zarba

    Great. 3 ugly boxes that won’t be production ready for 3 or 4 years, by which time Toyohondasson will be on their next-gen micros.

    GM staked their future on cheap gas. They lost.

  • avatar
    Paul Niedermeyer

    I read in one of the stories about these cars that a GM spokesperson clearly said none of these cars were coming to the US, because they weren’t being designed to meet US safety standards.

    So what is the point in showing them at the NY auto show, and having people vote on them?? The GM spokesperson also said that the vote wouldn’t affect GM’s decision as to which one they do build.

    Mindbogglingly stupid.

  • avatar
    Dave M.

    RF – not crazy about the reverse flow comments. Messes with my ADHD/dyslexic self.

  • avatar
    Paul Niedermeyer

    I found the quote. Detroit News: “Lutz noted that the (three) vehicles aren’t currently being designed to meet rigerous US safety requirements”.

    It would be difficult, if not essentially impossible/impractical to redesign these for US standards later. A truly empty gesture.

  • avatar
    Redbarchetta

    Here is a good read about why GM’s death is eminent. A little old but still relevent.

    http://www.coyoteblog.com/coyote_blog/2005/12/why_its_ok_if_g.html

  • avatar
    Megan Benoit

    I love it. “We’re cool! We’re hip! We’re relevant! We’re giving the people what they want! But… we’re not going to build these here and the ‘contest’ just makes the proles feel a little better.” And then when the ‘contest’ doesn’t take off, they can claim american’s aren’t interested in small cars (built by GM). Brilliant!!

  • avatar
    P.J. McCombs

    “I went to GM’s web site to vote for the Beat, but Sanjaya won there too.”

    Sean, I’m sending you the bill for my tea-soaked keyboard.

    The worst part about GM’s current “joyless penalty boxes” is that they’re not even that frugal: with automatic, the Aveo’s EPA mileage is 24/34 (!), while an automatic Corolla gets 32/41.

    As for these concept cars, I’m just hoping all the hype doesn’t culminate in a rebadged Daewoo Matiz…

  • avatar

    The next time GM makes a small car people really want (as opposed to one they just settle for), it’ll be the first time. As for these three updates of the classic Little Tikes Cozy Coupe, (a) I can’t tell them apart, and (b) I can’t figure out why I’d want to tell them apart.

    Thirty-seven years after the Vega, GM’s small car plan hasn’t changed: “Wish real hard, and maybe the small car market will go away.”

  • avatar
    Landcrusher

    Maybe instead of trying to figure out what people want, they should go the other way. Figure out what’s the best thing they can build. What can they do that is best in class, pushes the envelope, etc. Then, assuming they can succeed, bet the barn on it and arrange everything in the company to take advantage of that things success.

    If it works, great. If not, bankruptcy.

  • avatar

    BostonTeaParty said: “The cars look great, the future is small vehicles, they may be late but at least the generals bringing a bottle to the party. Wheres the problem?”

    Well, for one, they are vaporware, and for another, well here: GM March ’07 sales: -7.7%.

  • avatar
    NICKNICK

    Maybe we should have different crash standards for small cars. I don’t see how it can be be illegal to sell small cars such as this and be perfectly legal to sell 100+ hp motorcycles.

    I’m all for safety, so I think it would be OK to require safety testing and publishing of the results, but leave it up to the consumer to make choices based on that data. It should be OK to sell a deathtrap as long as the consumer is informed. That might be the only way we get 1500lb 80mpg commuter cars.

    After all, it’s still legal to buy old corvairs, jeeps, and pintos, right? Not to mention a five-star side impact rated Yamaha R6…

  • avatar

    Don’t start talking like that – the Honda GL1800 Gold Wing already has an airbag available. I’m dreading the day the safety Nazis make them mandatory for all bikes.

    Fortunately, my beloved 69 Bonneville cafe’ racer will run forever.

  • avatar
    oboylepr

    I have read all the GM DW’s with utter fascination. Togather they chronicle the demise (ongoing) of a once great company. I have always felt that there is hope for the General, that something would ‘click’ into place and they would turn the corner and start a real recovery. My faith in this is beginning to vaporize. Like many others, I am starting to think that they will crash and burn (in NA anyway) and I shudder to think of the hardship this will cause. One thing is certain, there is no fundamental change taking place within GM that would lead me to believe that any recovery is possible. A big question is; How will the final chapter play out? I know this is like asking a man who is being condemned to hang, “What kind of knot do you think they will use?”. I would be interested to hear what y’all think. My own thoughts are that the upcoming UAW contract negotiations will see both sides dig in, followed by a strike, followed by CH.11. What parts of GM or how much of GM will survive? Any thoughts?

  • avatar
    Redbarchetta

    Is it me or does that lime green one look like a shrunken Toyota Matrix. And the other two give me the feeling of a Honda Element broken up between the 2 of them with one of them having that ugly HHR face. I guess small cars are not allowed to be pretty.

  • avatar
    Redbarchetta

    Delphi strike, summer gas price hike, major cash burn until they can no longer make payroll, UAW strike, CH. 7. Liquidated, cut up and sold to the Japanese and Chinese.

  • avatar
    Joe Chiaramonte

    Landcrusher:

    “Maybe instead of trying to figure out what people want, they should go the other way. Figure out what’s the best thing they can build. What can they do that is best in class, pushes the envelope, etc. Then, assuming they can succeed, bet the barn on it and arrange everything in the company to take advantage of that things success.”

    They already did: the GMT900’s. Gas-guzzling trucks ARE what GM does best. Unfortunately, they bet the barn on oxen while the market wants gazelles.

    GM is so far behind, they’re like Paul McCartney sang, “I’m so far back, I’m in front of me!”

  • avatar
    blautens

    Great editorial – I was hoping you’d cover this debacle.

    Two of the cars didn’t even have mocked up interiors, just blacked out windows.

    And the audience at the show “chose” their favorite by throwing a like colored foam ball at the stage? I think that sentence doesn’t need comment.

    I’ll go ahead and order the green one. I can park it next to my Chevy Volt when they both get delivered in the year 20never.

    I can see GM is taking this small car “fad” very seriously.

    GM’s antics are far funnier than the Internet humor sites I read daily. I hope it never ends!

  • avatar
    jerseydevil

    It is interesting. I will be retiring my 95 golf this summer probably after a fine 200,000 mile performance. I am in a demographic that not everyone wants. I am 56, have what anyone could call lots of money, and excellent taste ( i like to think so anyway). Buick wants me to buy a car based on my middle management-ness. Lexus wants me to buy a car based on the snob in me (much as Mercedes and BMW). Saab wants me to be saab-ish, they ALL want me to buy within my demographic. Bless them all. As for me, I dont know what to do. Mustang, cool, bu you really need the V8, poor fuel economy. Any of the sedans? probably not. I can count on one hand the number of times anyone was in the back of my VW. I would buy a Pontiac/Saturn roadster (beautifull design, both)but it has no trunk space. No trucks/SUVs/Crossovers for me. Perhaps a Miata. Perhaps an Eos (i live in the city).

    Let the games begin!

  • avatar
    ejacobs

    I realize it is easy for me to say, but just start over already. Scrap everything. Or just be proud to be a decent truck manufacturer and forget about cars. I was once a Chevy nut. This is embarrassing. Scratch that: was embarrassing. Now it’s just comical.

  • avatar
    blautens

    ejacobs:
    April 5th, 2007 at 4:41 pm
    This is embarrassing. Scratch that: was embarrassing. Now it’s just comical.

    Exactly! I really can’t help but enjoy it now. I know I shouldn’t be laughing, but hey, you can only go so long before thinking “they know this is funny, right?”

    Give in to the humor…

  • avatar
    Jeffer

    If the General Motors story of the past 40 years was a fictional story, it would be dismissed as totally unbelievable.Here was a company that was top dog for half a century.They have had 40 years to beat the Japanese, and it hasn’t/won’t happen.
    When times were good they spent all the profits buying other companies, and burning the customer with sub-standard crap.I grew up loving Chevrolet- Impalas,Corvairs,Chevelles were in my dreams. My first Chevy was a Vega, we all know about them, but I believed Chevy had made an honest mistake and forgave them.A Chevette followed, which threw a rod at 18000km (car was idling when this happened)A Citation was next, tough motor but the tranny died at relatively low mileage.There is more, but long story short, I despise General Motors, these cars were crap because the only thing that mattered was ploughing the profits into aquisitions.Why not save a few dollars on the original Corvair by omitting a stabilizer bar? They learned nothing from that lesson, not even that if you kill the customers they won’t be buying any more cars from you.

  • avatar
    SherbornSean

    It’s a bit off topic, but I thought the concepts were quite attractive, esp. compared to the Versa, Yaris, or Aveo.

    They could touch a nerve with younger drivers, especially if Chevy had a separate sub-brand, like Scion. They could call it something youthful and vibrant that celebrates the earth, like, hmmmm, Geo, maybe?

  • avatar
    Geotpf

    The market for microcars (sub 1.5 liter engines, smaller than a Yaris or Fit or xA or Versa or Aveo) in the United States is just as micro as the cars. Maybe two thousand a month, total, for all makers. It’s a market segement not worth bothering with, especially since the profits in the segment are also micro. Take the Smart-please. It has a zero to sixty time of something like 22 seconds. It only seats two. It will cost more than an Aveo and about the same as a Yaris, which both seat five and are about twice as fast. It’s not going to sell. Now, if they start at no more than nine grand, seat at least four, and get at least 40 MPG combined highway/city (under the 2008 regulations), that’s different. But that’s not going to happen.

  • avatar
    NickR

    “I think it is time, especially as people are looking for a unique offering, to be a very creative, or to at least look at a very creative offering in the small car category.”

    ‘Ed’ must be short for ‘Nostradamus’

  • avatar
    NickR

    I couldn’t but notice the total number of votes for the three vehicles combined is 157,929. Not the most scientific measure of interest, but a pretty damn good indicator that these cars would find a market…IF they show up.

  • avatar
    rtz

    3 little cars to save a big company. Will I buy one of these wonder machines because it is cheaper then a new $9888 PT Cruiser? Will I buy it because it is the fastest car that money can buy? Will I buy it because it gets ~60 mpg?

    What is special about these cars? How does it ooh and ahh? Does it have heavy 20″ cast wheels(and 6″ drums/rotors?) and a Kazoo muffler and get 24mpg?

    50mpg VW diesels and hybrids and this car is euro 80hp. They’ve tried it a million times and these little gutless cars don’t sell. Geo Metro’s and Ford Festiva’s. Daewoo’s and KIA’s. Suzuki’s and Hyundai’s. How are those Aveo sales? I see these three little cars as redesigned/updated Aveo’s.

    Take these cars to some place big where the daily commute uses the interstate. Take it to Dallas, Houston, or Orlando. 0-60mph is important. Being able to run 70mph and have passing power is important.

    If I’m going to spend thousands I want value and/or fun for my money. These weak little cars are neither and nothing. Make two models of these little cars. One gets ~50+mpg. The other has a ~400+hp turbo four banger. Or go rear wheel drive and V8 with the requisite 400+hp. But don’t price it like a Vette!

    And while we are at it. Big Vette, Nustang, and Viper with ~500-600hp is played out and seems old. We’ve had that type of power for a while now. Who will be first to step up to 700-800hp? That’s the only place to go from here.

    Coolest Vette ever made? 1988 Callaway Sledgehammer. Twin turbo 350. 898hp/772tq. Ran the 1/4 in 10.6 and could cruise at 254mph. Totally impressive. Only things that aren’t is the price and the weight(and they never sold them).

    http://www.z06-corvette.com/super/sledgehammer.htm

  • avatar
    Steven Lang

    Wow RF I think we’re looking at this from two very different perspectives.

    GM actually has done very well with the Aveo. It managed to outsell the Accent, Rio and Echo for several years. However I don’t believe they will get this top position back unless they come out with an extremely stylish vehicle with widespread appeal… which is why they’re doing this ‘concept car’ introduction.

    You also have to take into account that GM, for now, has an enormous cost disadvantage. You can get away with the differential if you’re dealing in the midsized and higher segments, but it’s incredibly difficult to overcome this in the lower end markets. Having a foreign carmaker provide the offering is the ONLY viable alternative given the uncompetitive cost differential in the states. Every manufacturer with abnormally high legacy costs is doing the same exact thing (Daimler-Chrysler, VW, Ford, etc.)

    GM would be FAR better off devoting their energy to the minivan market where profits are still in abundance. If you think the age old, “If Japan can do it, why can’t we” attitude is going to work for a manufacturer with high debt and legacy costs, I would suggest you look at what happened to Nissan in the mid-90’s.

  • avatar
    Matt51

    The US car market, long dominated by GM, has historically been a total fraud. Americans even as long ago as the 1950’s and 1960’s desired simple, reliable, fuel efficient cars, that were affordable. GM has always worked to subvert this desire.

    Henry Ford knew what consumers needed even in the 1920’s, but GM was always trying to figure out how to get more cash out of the consumers pocket.

    Tail fins, annual model change/planned obsolescence, large V8 fuel guzzler/muscle cars -this is the history of GM.

    GM’s goal was always trying to find a way to get the consumer to buy an expensive, but profitable to them, large car. Today, GM wants to sell you a 30-50K car or truck, not a 15K Sentra, Corolla or Kia. GM should have developed competitive small cars after the first gas crisis in 1972. In 2007, they are 35 years late to realize what they should have been doing.

    Fast cars are a safety hazard. Considering America’s speed limits, road conditions, drunk dri vers, old men in Buicks, and so on, there is no reason to be selling 300hp or greater cars. The goverment will need to step in and regulate this. Yes, GM will cry, but everyone is getting tired of GM whining.

    If Americans bought Kia Elantras or Honda Civics, then used what they saved instead of buying a loaded 35K Silverado, they would have far more money left for homes, education, vacations, investments, retirement, recreation.

    Don’t let auto companies marketing steal your money. This is historically what GM in particular has done, but the Japanese are starting to feed at the same trough.

    The resulting fuel savings are also in the national interest.

  • avatar
    Terry Parkhurst

    I don’t know as I’d call Ed Welburn a corporate savior, given that the Chevrolet SSR, while an interesting update on the 1949′-54 Chevrolet and GMC pickup truck, was just a dud in terms of sales. (Admittedly, it might have been someone else who insisted on the cost of a retractable hardtop, someone wearing a “senior vice-president” in front of their name.)

    Is he right about Americans considering a small car? I think, only in the cities, and only in those cities where people are wearing the proverbial “hairshirts” in regards to the perceived effects of the internal combustion engine on the planet.

    There is a company called “Green Car” in Kirkland, Washington which imports Smart Cars. They have one, at this writing, not far from where a Dodge dealer has displayed a lime green Dodge Charger (with a Hemi), within the Northgate Mall in Seattle. Neither car, seems to draw much interest. (I stopped, but finding all the doors locked, walked away. How do they expect to lure people in, without allowing them to sit in the little bugger?)

    However, when I once saw a Smart Car from the same importer, parked across the street from a Whole Foods (called “Whole Paycheck” by those in the know) market, it was drawing interested people, like a ’57 Chevrolet convertible at Hot August Nights. Said market was in a neighborhood filled with other “holistic” shops so you can figure out the demographics of that neighborhood.

    In the next year or two, when Roger Penkse starts plopping Smart cars at select dealerships – don’t know how that will work with the upcoming sale of Chrysler – that will be the true test of how much “small” Americans can tolerate as a modifier in front of the word “car.”

  • avatar
    50merc

    GM doesn’t want to sell small cars for the same reason Henry the Deuce gave: “Small cars, small profits.” Indeed, as the high-cost producers with crushing overhead and legacy costs, the 2.5 can’t make any profit on small cars unless they get ’em from China. Even then, if customers buy small $15K cars instead of higher-priced vehicles, the 2.5 still get hurt. I think GM and Ford are just hoping to survive until they can shrink to a few domestic truck plants and obtain most of their cars from low-cost countries.

  • avatar
    wsn

    Well, nothing wrong with not willing to sell small cars.

    So, just start with midsize and give us a real Camry fighter. The profit margin of the Camry isn’t low.

  • avatar
    CasterOil

    But….but….. what about all the Big Oil and Big Carmaker self-interest groups conspiring to quash all of those 200 m.p.g inventions over the last 40 years.

    You know the ones, a backyard inventor has discovered, a “hedgehog” or something gives 200 m.p.g, and voila!

    Suddenly, it is bought out and shelved, because 200 m.p.g is NOT in the interests of Big Oil.

    Fast forward to today. I’m sure that these shelved 200 m.p.g inventions are going to appear on the 2008/9 range of cars (especially since the Supreme Court has deemed CO2 to be a “pollutant”), and all will be well.

    No need to downsize at all!

  • avatar
    wsn

    Just to add, the 11% increase for Honda is mainly due to increased sales in Accord and MDX/RDX. How do I know? I am a tiny stake holder in HMC.

    The problem with GM is not that they don’t have an attractive small car. They don’t have an attractive any car.

  • avatar
    Ptrott

    This constant bash ANYTHING made in the USA is getting unbearable. GM makes SEVERAL automobiles that are every bit as fuel efficient as what TOYOTA makes. The problem is that the american buying public has bought into the b.s. that if it says TOYOTA, NISSAN, or HONDA that it gets the BEST fuel economy of anything on the planet and of course it will NEVER break. B.S.! The truth is most every manufacture makes a good car. Quality is MUCH higher than it used to be and the nuances of driving charactistics that critics dispense the vast majority of drivers have no clue about. I have been in auto sales for a long time, foreign and domestic and they ALL have complaints and accolades from the consumer. Give the domestics a break, they arent perfect but not nearly as brain dead as you want people to believe.

  • avatar
    Axel

    wsn: So, just start with midsize and give us a real Camry fighter. The profit margin of the Camry isn’t low.

    The 2008 Malibu will do quite well. It won’t quite exceed the Camry, but the Malibu and Impala combined will smash the Camry in terms of raw sales. The Impala by itself doesn’t lag all that far behind. It’s bland, but it ain’t all that bad, and sales are way up from last year.

    I’m highly optimistic about the Malibu. I think the car is going to be a smash hit. Americans want to like American cars, and I think the combination of sexy styling, decent interior, DOHC engines, and 6-speed transmissions will do much to rectify the issues that your Camry and Accord buyers have with American sedans.

    Heck, if I were in the market for a new car, when autumn rolls around, I’d take a good, long look at a 4-cyl, 6-speed Malibu.

    Small cars? Sure, I’ll do them for thrift and fuel efficiency, but there’s no other need, and my 6’3″ (sorry, 190 cm) self gets all scrunched up in them. And no, I’m no lard-ass at 185 lbs (sorry, 84 Kg).

  • avatar
    wsn

    Replying to Ptrott:

    My 2 cents:

    1) It’s just not good enough to be better than cars in 1930. Just look at cars produced in 1950, they are certainly much better than the 1930 cars. Things would not have improved, had the consumers not asked for better products. 2007 cars will look like a joke compared to 2050 cars, that is, if we keep buying the car that’s 1% better than the competition.

    2) The reputation of a car model is established over many years. You can claim a certain GM model is as good or better than a comparable Toyota model. But that is only an empty claim. People want to see long term proof. Can you tell me what 1990/1995/2000 GM models are better than Civic/Accord? I can think of none, and I will not consider a GM car without seeing a solid 10-year track record behind it.

  • avatar
    Axel

    “Saturn Outlook [is] exceeding our expectations”

    The only reason the Outlook does so well is that no one is aware of the existence of the Ford Freestyle. That may change when the “Great Renaming” give the Freestyle new life as the “Taurus X.”

    I’m a Ford hater, but I still have to admit the Freestyle is perfectly suited to its purpose, for thousands less than that overly-extravagant Outlook.

  • avatar
    philipwitak

    re: Terry Parkhurst:
    April 5th, 2007 at 11:26 pm

    terry, check out the smartcar link provided. it offers all the salient information that is currently available. and it may not be too late to get in on their special reservation program whereby you pledge $99 on your credit card – which is fully refundable upon your request. this allows you to actually order the model you would prefer, with the options you prefer, and you’re under no obligation to conclude the sale. in the meantime, a publicity fleet of 40 or so cars will be touring the country this spring and those with reservations will be invited to special previews where they will have the opportunity to actually drive each model.

    i purchased my 97 boxster under a similar program from porsche ten years ago. the process was painless and am looking forward to doing it all over again with the smart car.

    http://www.smartusa.com/

  • avatar
    Aeroelastic

    Ok, here’s the solution GM: Pick one and make it. Yesterday. It really doesn’t matter which one. Just do something. (IMO, the green one is the least ugly).

    And here’s how you do it. Look up all the stats on small cars, pick the best numbers. Then beat them all by at least 10%. Preferably 50%.

    Off topic- On site design, I prefer to read first post at top of page, and work down. Or give us the option to sort comments either way.

  • avatar
    hansbos

    Why don’t they bring back the EV1?

  • avatar
    Areitu

    The reputation of a car model is established over many years. You can claim a certain GM model is as good or better than a comparable Toyota model. But that is only an empty claim. People want to see long term proof. Can you tell me what 1990/1995/2000 GM models are better than Civic/Accord? I can think of none, and I will not consider a GM car without seeing a solid 10-year track record behind it.

    You think they’d figure this out with the ‘vette and their pickup trucks!

    RF– Sincere apologies for the posting on my blog. If you happen to find more, comment on them and I’ll edit/remove them asap.

  • avatar
    NickR

    SEVERAL automobiles that are every bit as fuel efficient as what TOYOTA makes

    Maybe, but in the small car segment we are discussing here, here are the stats: (Urban/Highway) Aveo (26/38), Versa (30/37), Fit (32/41), Echo (34/43). That’s right, in the segment where mileage is king, on the city cycle the Aveo manages to get 6mpg less than the Fit and 8 fewer mpg than the Echo. That is pathetic.

    And looking at Consumer Reports, 84% of Fit owners would by another, 73% of Yaris owners….and the Aveo? 43%! The lowest of the 18 cars in it’s class. The bottom three is rounded out by the much maligned Ion at 49%, and the Cobalt at 52%. It is also worth noting these are the only 3 GM products.

    In short, the Aveo sells because of low prices and high incentives. That’s exactly what GM needs to get away from.

  • avatar

    “This constant bash ANYTHING made in the USA is getting unbearable.”

    A lot of us like Accords, Camrys, Civics and Corolla’s so there is nothing against cars made in the US.

  • avatar
    windswords

    NickR,

    Question. Are those mpg figures 2007 or the new (and smaller) 2008 numbers? If the AVeo’s numbers are the 2008 rating and the others are 2007 rated then I could see how the numbers would not look as good for the Aveo. I remember some were complaining about the mileage in the Dodge Avenger review but it was the new EPA rating. When done under the old way the Avengers mileage is right in the mix with all other cars in it’s class.

  • avatar
    windswords

    # CasterOil:
    April 6th, 2007 at 1:47 am

    But….but….. what about all the Big Oil and Big Carmaker self-interest groups conspiring to quash all of those 200 m.p.g inventions over the last 40 years.

    You know the ones, a backyard inventor has discovered, a “hedgehog” or something gives 200 m.p.g, and voila!

    Suddenly, it is bought out and shelved, because 200 m.p.g is NOT in the interests of Big Oil.

    Fast forward to today. I’m sure that these shelved 200 m.p.g inventions are going to appear on the 2008/9 range of cars (especially since the Supreme Court has deemed CO2 to be a “pollutant”), and all will be well.

    No need to downsize at all!

    ————–

    Ah, yes the “200 mpg carb”, that marvelous urban legend that pops up everytime there is spike in gas prices. As Philmore from the movie Cars says, “It’s a conspiracy man!”.

    Actually there was 200 mpg carb invented by a Roy Marks in 1902 and was given a US patent number 710,330 on September 30, 1902.

    You can find the particulars here:

    http://www.allpar.com/old/200-mpg-carburetor.html

    For those of you who don’t want to go to the link here is the gist of the story:

    “Well, the solution has been found. It is real. It was one of the popular technologies used when the automobile engine consisted as a large one or two cylinder engine that ran not much faster than 600rpm. [my emphasis] A fixed speed. Throttle control technology had not been discovered yet. Engine rpm was fixed by some form of governor applied to the sparking system (if any) or to holding a valve open when the rpm increased above a certain speed.

    Road speed was generally achieved by two forward gears of sorts. One gear used for a fixed low speed and the second gear for a fixed higher speed. Very rarely did the high speed exceed 15 mph.

    To build one for yourself is not difficult. Remove the lid off of your air cleaner. Remove the air filter, and fill the cavity with cotton cloth waste. Disconnect the fuel line from the carburetor and plumb it into the air cleaner using some form of a shut off valve similar to a toilet valve. When the fuel rises to a given level the fuel would be shut off. As air passes by the gasoline soaked rags, the fumes generated by evaporation would then be sucked into the engine and thus the engine would run. Sort of, with a drivability problem or two. The carburetor butterflies would sort of control the mixture into the engine but not really well. Also be aware when you shut the engine off there would be a fair amount of evaporation of the gasoline taking place. The fumes would be quite obvious. But that could be solved by using a system such as the boats use to vent the engine compartment before the engine starts to prevent explosions. In the winter, you could route the hot exhaust gasses up to the air cleaner to encourage the evaporation to take place, as long as you carried a fire extinguisher along, there should be no real concern.”

    Uh, the oil companies did not buy this patent.

    As for the Pogue carb invention of the 1930’s you can look that up here:

    http://www.snopes.com/autos/business/carburetor.asp

    He was never able to demonstrate one to any one reputable in the auto business. This page also touches on the another urban legend, the light bulb that never burns out.

  • avatar
    Lokkii

    What is Schizophrenia?

    Answer: GM’s approach to small cars.

    Head 1: There is no profit in small cars. We shouldn’t bother to make them – the money is in the big stuff.

    Head 2: Small cars are important because they bring people into the GM family, build brand loyality, and are popular during times of high gas prices.

    Head 3: Okay – then we will build small cars, but we will expend as few engineering and marketing resources as possible.

  • avatar
    NickR

    windswords: The method for deriving those figures is consistent across models. It is the mileage calculated using Canadian standards, converted to mpg.

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