".....If I were GM I would concentrate on how to make exciting, unique vehicles in the $15K range, and sell to the many millions who want a new vehicle but can't afford the average $25K+. VW is selling a Jetta for around $15K. GM should be targetting that, and beating that vehicle soundly in performance, cost, and mpg."
They are with the Cruze and, one would expect, the Verano. That should cover the $15-25K club. While I've yet to see one, many people have complained that the Jetta for $15K has been cheapened. If this is true, then a $15K Cruze may not be a bad deal. However, that will depend on people actually sitting in them and poking and prodding them.
Each model off of a vehicle. 300K and 250K = 550K. I would not suggest taking a vehicle that sells 250K units and splitting it into different brands! You're increasing your costs.
Look pretty simple stuff. GM needs some vehicles like when Ford introduced the Mustang back in the 60's. They sold something like 400K Mustangs that year. Then they said okay let's give Mercury their version the Cougar, and we'll sell a few hundred thousand more per year.
If you think this strategy of taking so-so volume vehicles and making numerous brand-models out of it is good, then explain why that same strategy that GM had the last couple of decades failed? How do you explain that the same strategies that were proven to fail over years, are now suddenly going to make them $? You fail to acknowledge that many of the people who are sitting in their offices in front of the computer looking at their cost to make a vehicle don't have a real understanding of how that cost is calculated. I know. I work in a Mfg. facility, it isn't that big, and the managers and Mkt. people have no clue how inaccurate the costs on their system can be. They assume that if Part 1 costs $100, they can spinoff Part #2 and that will also cost $100. But it doesn't! Because in putting in the tooling and work to setup Part 2, they have added more than just linear costs. After setting up Part 2, Part 1 and 2 might cost $120 ea. But most internal accounting systems aren't setup to catch that and will simply display $101 when rerolled. What happens to the other costs? Well they're just spread in Overhead to all the other parts in that factory.
I've worked in Mfg. Eng. for years and do costing. I know how manufatcuring accounting works and I know how Msoftware systems like SAP and Oracle handle and calculate costs, and the few people who understand it.
And I'm telling you that the worst thing any manufacturing organization can do is to proliferate the number of parts and split its market into smaller and smaller shares for each product!! Now if you would like to tell me of your experience in manufacturing costing, please tell me, and we can share war-stories. GM understood this somewhat by dropping a couple of brands to minimize its models. It was not able to go further in dropping more brands, because it could not realign itself with its dealers, also because as I said they did not dissolve GM and start with a clean-sheet of paper.
GM needs to resist the inefficient demands of each brand to have a model in each possible sector of the consumer market, to sell 30K rebadged model X. GM or any other manufacturer does not make $, at least in moderate priced vehicles by selling in that sort of volume. GM gets away with that with the Corvette as the average price is probably around $65K, with a good margin.
GM's road to success is simple - and I should get a free car if they actually do this, as they'll save hundreds of millions (I can hope, no?)
- Consolodate all brands into one GM badge. - Offer one and only one trim level per vehicle brand. - Higher trims of the same platform are marketed as different brands.
ie - Chevy X/Buick X/Cadillac X This is kind of like what they did in the late 80s with the Pontiac/Olds/Buick/Cadillac sedans that were almost identical, but the idea is that instead of having a Verano CL, CX, CXL, etc - it's just *one* vehicle and the "trim levels" are "Chevrolet/Pontiac/Buick/Cadillas - or whatever they want to use since it's just a name at that point. But make each trim level like it was in the 50s and 60s - a huge difference between them.
Base trim of the same car is the Chevy, middle is Buick, top is Cadillac. Like the Acura TSX, offer essentially no real options other than sunroof/audio upgrade and nav. to keep production costs down.
This would make a car like the Cruze(now)/Verano(soon)/BTS(likely) need a total of 3 toolings instead of 9-10. That's an enormous savings in the long run.
That's not bad, since there's the reality of the different brand-dealer's that GM kept. Keep the manufacturing as simple as possible to keep costs low. Use the low costs to sell more vehicles which in turn reduces costs further.
GM shouldn't be trying to please every potential customer by making all sizes and shapes of vehicles with multiple types of styling. GM simply needs to convince 4M to 5M people here in the U.S. to buy 1 of their vehicles. That would give them 30% market-share. GM and many other manufacturers need to focus on what they want to be, rather then trying to be in all markets. It's like trying to wage war on 3 fronts. Pick a few things you want to do, and do them darn well!
"......GM needs some vehicles like when Ford introduced the Mustang back in the 60's. They sold something like 400K Mustangs that year. Then they said okay let's give Mercury their version the Cougar, and we'll sell a few hundred thousand more per year."
And what was the Mustang??? A rebodied Falcon/Comet. 400,000 units, while not impossible is getting tougher to come by as competition becomes stronger.
No matter how you look at it, the 2 crossover platforms are selling well in all variants. 550,000 units with gas at $3/gal is nothing to sneeze at.
A rebodied Falcon/Comet. 400,000 units, while not impossible is getting tougher to come by as competition becomes stronger.
Sure it's tough to come by! That's one of my points. But a bankrupt company should not be spending resources on bringing so many "me-too" vehicles to market. They should focus their resources on a limited number of vehicles, and make those vehicles much better at the same or lower cost than the competition.
I'll forgive Chevrolet for bringing the Cruze out as they did, as it is quite an improvement over the Cobalt. But is the Cruze going to be the dominant vehicle in it's market against the new Elantra, Civic, and Focus? If not, why would you spend $1B+ to develop a model that is going to capture 15% of the market (maybe counting fleet sales). That is how you lose $. That is HOW GM lost money and market-share. That is how GM followed the road to bankruptcy. To spend more $ designing new sheet metal, lights, dash and some interior upgrades to give Buick dealers their version to sell another 40,000 units is ridiculous. And what makes it worse is there will probably be several models within that 40,000 units that need different parts.
If you don't think it is bad business strategy, then what led to the decline of GM over the decades, where they became so weak that an economic downturn made them go bankrupt? You can't believe that everything was great at GM, until the Fall of 2008.
The Cruze appears to he a huge improvement over the Cobalt. From my perspective, GM has decades of undesirable small cars to overcome. That means there are thousands of buyers who won't even go to a Chevy dealer. All the advertising in the world won't change the fact they will march right over to their local Toyota, Honda, & Hyundai dealer.
For GM to make the Cruze a dominant player, they can't sit back now that the Cruze is on dealer lots. It's time to properly advertise it and be working on improvements to battle the competing vehicles coming on the market over the next 2 years.
That's where GM has failed in the past IMO. Bring out something new/redesigned and let it die on the vine over the next 6 years, often times make them worse by decontenting.
That's where Ford has really improved. Look at how many times the 500/Taurus was upgraded since 06. Same with the Fusion, Expedition (03 heavy refresh, 05 new v8, 07 heavy refresh) Edge, Mustang, F150 etc. They've all seen improvements (which they needed) to increase their competitiveness every few years.
I'm curious to see what GM does with the Regal going forward. I just watched Motorweek's review of it and they liked it other than the base Ecotec, they weren't fond of the 6sped auto either (something I've read often). A buzzy 9.4 0-60 time is pathetic in a something that's suppose to be sporty and somewhat premium. Add that the sluggishness isn't accompanied by stellar fuel economy and I ask myself, why? 19/30 is comparable to others in the class offering better performance.
Some may say, the 2.4 as a base engine is good enough. That maybe true, but when GM is trying to change it's image, you don't do it by being good enough. Surprise me, make me want to buy a Buick. There are to many good vehicles to buy to settle for a lack luster powertrain. The turbo model only makes it adequate IMO.
".....If not, why would you spend $1B+ to develop a model that is going to capture 15% of the market (maybe counting fleet sales)."
They didn't spend $1B to develop a model, they spent it on a PLATFORM. A platform (just like the Falcon/Comet/Mustang/Cougar) that can be used for different models. I can't imagine the tooling would be that much more for the Verano sheetmetal. One would assume that the Verano interior would "bolt up" in a Cruze even though it may look totally different.
The big difference is that 30 yrs ago, When you sat in a Lesabre and a Delta 88, you really knew it was the same car, same 307 V8 same dash (w/different guages) same seats (w/ different cloth).
Bottom line is if you sell 200,000 of the Cruze at an avg price of $21,000 and 60,000 Veranos at an avg $24,000 your profit margin is higher there.
I was looking at my Std Cat of American cars. In 1965 a base Impala V8 was $2676. A base Lesabre was $2968. The Jetstar 88 was $2862!!! The Catalina was $2809. All there were "B" bodied GMs. The base "B" body Caddy? A Calais. Price??? $5059!!!!
But in the 60's GM had 50% or nearly 50% of the market. That sort of strategy of making slightly different variations for different brands worked okay then. But as quality slid and competition grew, GM's market-share decreased. But they still tried to maintain all these brands/divisions and keep as many platforms.
You are being highly optimistic if you think Chevy is going to sell 200K Cruzes. I went and sat in one; it was fairly nice. But priced too high. Without much trouble I can justify going and buying a Scion tC which is more powerful, better equipped, lower cost, and probably will have a better trade-in value. I'd buy a Honda Civic sight unseen, at the same price. A fully loaded Cruze should be less than $20K if it wants to get much market share and be competitive.
I just went and built a Cruze 2LT similar to a $20K Scion tC with auto. The Cruze 2LT was $23.6K, and that is with a little 1.4L engine.
The Regal is simply a failure. 3700lbs and 180hp is the same as the original late 80s W-body Park Avenue Ultra. You've gone backwards 20 years, GM. 2011 sales through December were 12,326. For a new release, that's a disaster.
Compare that to the Ford Focus 1999 55,846 Between 160 and 280K a year thereafter. (first model year sales - 342,000)
The Regal won't hit 40K at this rate. Figure 7 year production cycle at 40K a year and about 2-3K profit per vehicle (their profit over manufacturing cost - mostly add-ons, leather, nav - not dealer profit margins), and you're looking at ~550-800 million. True, they will still make money, since it's a re-badged Opel Insignia, and re-badging takes a few dozen million as opposed to a billion for a new platform, but it does nothing to deal with their enormous market-share loss. ie - if you're not growing, you're dying in this business.
Now, it's not a BAD move for them to try to re-work existing platforms from abroad as it saves enormous amounts of money, but let's be clear on one thing. Americans share more in common taste-wise with Australians than Europeans when it comes to the outdoors and especially vehicles. You need to NOT bring in more non-diesel Opels and the like (the diesels are good, and represent the lion's share of the European Opel sales - even they hate the gasoline versions) and instead bring over some of the very decent Holden cars. A little re-badge and some DOT parts and you're set.
Take a page from Carl's Jr's playbook. In the middle of the health craze and worry about calories and so on, they said "forget all of that - we're making what tastes good". Their food is unabashedly high in everything bad and yet they are doing fantastic. In times of economic hardship, people want their comfort food. GM needs to make "comfort food vehicles". RWD, big, aggressive. So that even if they don't have the sheer volume of Honda or Toyota any more, they still make cars that make your heart move faster. The Mustang is a perfect example of this - it's incredibly non-green in every possible way and yet it sells in huge numbers year after year.
Regal: 3700lbs and 182HP. 111 cubic ft. passenger/trunk space. Cruse/Verano: 3100-3300lbs. 110 cubic ft passenger/trunk space.
Kind of a no-brainer which to buy. 400-600lbs lighter is an enormous difference, since the Ecotec Turbo isn't any better than a typical V6. Same power, same fuel economy. More expensive to own and repair. At 30K, I'm not impressed. Neither will the fleet and rental companies. That means direct customer sales only, and for that, just look at the figures for the Lucerne.
I was looking at my Std Cat of American cars. In 1965 a base Impala V8 was $2676. A base Lesabre was $2968. The Jetstar 88 was $2862!!! The Catalina was $2809. All there were "B" bodied GMs. The base "B" body Caddy? A Calais. Price??? $5059!!!!
if you adjust for inflation, each of those would be about 6.73x that today (or 2009, the most recent numbers I could find. So, by today's standards, that would be...
So at least they did maintain a bit of the traditional hierarchy in there, with a Pontiac being more expensive than a Chevy, then the Olds, then the Buick, and then the Caddy. But the B-O-P cars are really too close together in price. It worked back in the 1960's, when the cars had much stronger individual identities and were more unique (even if they were all B-bodies), but it wouldn't work today.
And, oddly, while the cars were priced properly in the hierarchy, there was actually an inverse relationship when it came to engines. A '65 Catalina had a 389 V-8, while the Jetstar had a 330, and the LeSabre just had a 300!
Pletko- That's pretty much how I see it. It appears the Regal is just another in a long line of new offerings from GM that the "kool aid" drinkers said will show how GM will beat the competition.
That wasn't the case for the likes of the G6, Aura, Solstice, Cobalt, GTO, G8 and now apparently the Regal.
As for the Regal, isn't it going to be manufactured stateside soon? So maybe that will improve the production costs to the point where it can be equipped properly.
I still haven't seen one on the road and I'm always out and about.
Well , GM spent $4 billion as per Wiki to develop the Cruze. Thank you Govt motors for using our tax money and paying the fat lazy GM executives and UAW workers ! :lemon:
They're thoroughly unremarkable looking, so you probably passed one and thought it was a Hyundai or something else. There's only a few hundred on the road in most states as I type this.
Moving production just adds to the cost. Shipping overseas in bulk is cheap. And, honestly, they should have merged Pontiac and Buick into one brand, since most of the Pontiac vehicles at the time sold better. Killing off an entire line to keep three vehicles nobody cared about was a truly stupid move. Doubly so since Buick is a niche market with massive competition from normal makers.
Compare an top trim Accord V6 to a LaCrosse. Styling aside, the vehicles have many of the same features. But if you compare a top trim Malibu or Impala, there's not a lot of difference, either. Buick is unfortunately useless at this point and also needs to either go or they need to use it as a place to put vehicles like the G8 back into their lineup. Think up a name for it and cars like it from Holden and bring it over.
Or, better yet, kill off Buick entirely and bring Holden over here. It's a well respected name in Europe and Australia and most of the rest of the world. This would free GM from its age-old dealership contracts (there aren't a lot of Buick only dealers to begin with) and allow for a new face and new models. And also a place for more aggressive models. Chevrolet would be entry level and rental stuff, performance and fun would be Holden, luxury would still be Cadillac.
Buick is there only for ONE reason - CHINA ! It sells well there and GM was worried that if Buick was closed - it would affect its image in China and sales would may be take a beating there.
B'cos in china ,people know that Buick exists in US and that contributes to its upscale image. Holden or Opel never existed in US + Europe is a totally different market than China/Asia . In China / Asia it is all about the image than about the actual functionality of the vehicle and the actual specs. :shades:
I thought that was true here in the U.S. and the reason that Chevrolet wasn't alone and that Buick and Cadillac existed. And why Ford had Lincoln, and Chrysler had Chrysler and not just Dodge. And every foreign company had to come out with their upscale brand.
If autos were only about functionality then they wouldn't need to put so much effort into making so many different colors and changing them each year, or all the other non-functional updates that are made. Anyone for an a side-order of chrome wheels?
I think given Asian culture and beliefs that GM had to keep Buick here. I believe they were headed in the right direction with the LaCrosse, a definitely upscale, product differentiated faux lux sedan. Perhaps add a sporty semi lux Riveria, a Holden derived RWD sedan and maybe a similar upscale compact or midsized CUV (except they had to keep GMC I guess to have enough vehicle volume for Buick dealers). What they are doing instead is veering away from the LaCrosse strategy and apparently moving to stupid vehicle proliferation from Chevy which is bound to move Buick more toward the unsuccessful Mercury model. Note to GM leadership - Roger Smith is dead...please repeat over and over again until you wake up.
For example . BMW has a upscale luxury image in US, whereas in Europe they are used as taxis and does not have that top tier status. Toyota is considered an upscale brand in Brazil whereas Ford or GM are not. Go figure ! :shades:
The image of Buick in China is that of a wealthy well settled American man who rides in a quiet sedan driven by a chauffeur. it basically indicates a successful man/woman in their careers and now have the luxury to be driven around. Different strokes for different blokes I guess ! And no one wants to buy from a brand that does not exist anymore in US. Hence , Buick was kept alive here. :P
My best friend's cousin has a blue 1967 Calais coupe. It is rather plain for a Caddy - crank windows and such. He calls it "the working man's Cadillac." A neighbor down the street back in the day had a 1969 Cadillac Calais coupe in gold with a black vinyl roof.
I sort-of find the Cadillac Calais models to be interesting. You have to squint to tell them from a deVille outside, inside they were still pretty nice (they got standard power windows in '71 or earlier). It was a good way to "step into" a Caddy.
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Watching Top Gear UK GM has the "GTO" they are gonna bring back as a Chevy, they also have a car they need to bring here, dont what its called, but its an El Camino, that would smoke Colorado sales!
they also have a car they need to bring here, dont what its called, but its an El Camino, that would smoke Colorado sales!
That's the Holden Ute, which is quite popular Down Under. GM briefly considered bringing it to the states badged as a Pontiac, but the decision to close down the Pontiac brand, along with the BK, shelved those plans.
Not sure there is a business case now that would allow GM to federalize the car for sale here, given that it would probably sell in very low numbers.
I believe GM is doing the right thing by focusing on the C segment (Cruze, Verano) and B segment (Sonic), plus the R&D into hybrids and plug ins (Volt), given that the price of gas is almost certainly going to increase ($4? $5? More?) in the next 3-5 years.
You buy a Buick Regal GS to continuously see the rear view of the Sonata 2.0T...particularly when you run out of gas as the Sonata continues on.......and then you will never catch up! :shades:
You buy a Enclave knowing there are 2 other models with different skins that make your purchase a typical GM buy of the ages...nothing special, just me, too. :P
".....Pletko- That's pretty much how I see it. It appears the Regal is just another in a long line of new offerings from GM that the "kool aid" drinkers said will show how GM will beat the competition."
No, given the dimensions, I would agree that keeping a base Lacrosse at $25,000 and a Verano based at $21,000 and doing away with the Regal would make sense. Both cars could come with the 220 hp 2.0 turbo standard, as well as a 6 sp. man.
while killing time waiting for my daughter to finish her piano lessons, i just drove through my local ford and buick dealer which are next to each other.
the ford dealer only had 7 or 8 fusions that i could see and 4 or 5 Tauruses. the buick dealer had at least 15 regals. they were parked every where. Not a bad looking car as this is the first time I've seen one in person. But it looks like they are piling up on the lot.
".....Thank you Govt motors for using our tax money and paying the fat lazy GM executives and UAW workers "
Too bad!!!
So far, GM has sold 270,000 Delta II vehicles worldwide, not including NA sales. Add another 28,000 NA Cruzes to that. Volt production (Delta II based) has been increased from 10,000 to 25,000 for the first year. And GM just signed a contract w/ SAIC to build $900 MILLION worth of cars and components HERE for EXPORT to CHINA (per Automotive News)
Considering the platform will be around for another 8 years, They'll make the $4 bil back in spades.
the buick dealer had at least 15 regals. they were parked every where
I still don't understand this car - its too close in price to the LaCrosse and I don't think most people turn to Buick when looking for a small sporty car? If Buick wants a sporty car they should bring out a new Riviera.
I just read that GM wants Buick to be a luxury division Lexus fighter, while Caddy takes on MB. I understand not wanting to be called near luxury and its potential implications, but both Ford and GM need to be careful on pricing vehicles too high and then having to rebate them which inevitably seems to hurt vehicle image and residuals.
The 1.4L run-of-the-mill (LT2?) Cruze that I sat in at the Chevy dealer had a sticker over $21K. So there's little chance that the base Buick Verano with a 2.0L turbo (as you suggested) would be at $21K.
IMO, GM is asking about $5K too much on each of its vehicles. To be competitive here in the U.S. where GM's image is tarnished from years of so-so vehicles, and of course the BK, GM should have its prices 5% to 10% less than the competition when comparably equipped.
GM can dream all it wants, but very few people shopping for a Lexus would consider a Buick. It's like someone deciding to shop at Brooks Bros. or Penney's. It doesn't happen often that someone is trying to decide between the two.
".....So there's little chance that the base Buick Verano with a 2.0L turbo (as you suggested) would be at $21K."
No, IIRC as it stands a base Verano will come with the 2.4 for around $21K. My point would be if you axed the Regal, repriced the base Lacrosse w/ a 2.0 turbo for $25K, then base the Verano w/ the turbo at $21K you could even scale back the 2.0 to 200 hp in the Verano, and leave it at 220 in the Lacrosse. The higher HP (276??) could be an option for the Verano (GS??) which would be fine because the 3.6 in the Lacrosse is now 281 hp, and you could easily up it to 300.
".....GM can dream all it wants, but very few people shopping for a Lexus would consider a Buick. "
Not true. The coin dealer I deal with traded in his ES for a Lacrosse CXS, and I've had a couple people driving an ES or Acura complement me on what a nice car my Lacrosse is. They may not buy one ( my FIL's friend LOVES my car, but opted for a loaded Crosstour instead), but people have sure sat up and noticed what a great car the Lacrosse is.
BTW, through Nov. the Lacrosse outsold the ES 56-43K, and Buick came w/in 11,000 cars (not trucks, 100K-89K) of Lexus, with half as many models.
the lacrosse certainly has been a success but overall it is quite a bit cheaper than a lexus es350. Don't they start over 35k. A lacrosse can be had for 10k less. So i would expect it to outsell it. plus chevy doesn't have a decent premium sedan to sell. So it is really the only option for someone looking for a nice fwd sedan from gm.
Thought it was a Vauxhal (is that how you spell it?) basically the same vehicles, one a sedan, the other you'd have to call it El camino, so if you can certify one, why not the other, even if they dont sell that many (I think they would, at first anyways) GM should be doing what it can to sell vehicles and make profits.
I saw a Cruze....no thanks. Chevy truck grill, nothing to set it apart from other sedans, "styling" on the Cruze alone would keep me out of the Chevy showroom.
GM already has quite a few vehicles with V-8 engines, and larger vehicles. Though GM products do typically get good mpg for the engine and vehicle size, the new CAFE mpg rules, is going to basically stop any proliferation of V-8's. yes they'll still be made, but they will become a smaller and smaller share of the market.
You are going to see more and more vehicles as they are redesigned offereing the 2.4L and smaller engines like the Cruze.
Every vehicle manufacturer will be bringing down their average engine size over the next decade.
The future is not 4,000Lb 190" long V-8 powered sedans, or anything else in that size, except PU's. You're going to see a lot more Sonics, than you're going to see G8's or GTO's. (The Sonic hatchback is a vehicle I actually could see myself looking into, if they keep it priced around the Fiesta or Mazda2).
The future is not 4,000Lb 190" long V-8 powered sedans, or anything else in that size, except PU's. You're going to see a lot more Sonics, than you're going to see G8's or GTO's. (The Sonic hatchback is a vehicle I actually could see myself looking into, if they keep it priced around the Fiesta or Mazda2).
They said the same thing about ten years ago during the health food craze about fast food. The two chains that went against the trend and said "so what - we'll make old-school burgers anyways" are the two that are doing the best now in the western U.S. (Carls Jr and In-and-Out)
GM needs to start making more crazy and inappropriate vehicles rather than conforming to the greater beige jellybean movement.
It's a good idea... if you're trying to sell cars to automotive journalists. Bob would have sold more cars to regular folks by getting a subscription to Consumer Reports and fixing all the black dots.
Fixing the black dots might have been harder than it seems, since identical vehicles like the Pontiac Torrent and Chevy Equinox had different numbers of black dots, and things like body hardware often show different results for the same car with four and six-cylinder engines--????? Sample error.
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They said the same thing about ten years ago during the health food craze about fast food.
But the fast-food industry didn't have the equivalent of CAFE did they? The difference is auto manufacturers have a federal regulation that they meet certain mpg ratings which are significantly increasing. The average mpg is increasing to 35 soon, and then 50mpg or so by the end of the decade? So you need to have a lot of fuel-sippers compared to gasoline V-8's. So you do the math and tell me how GM can sell vehicles with an average 50mpg if they're going to focus on larger V-8 engines.
If you check most rumors on the next-gen Corvette, you'll see even that isn't exempt from downsizing to a 6 cyl turbo.
The two chains that went against the trend and said "so what - we'll make old-school burgers anyways" are the two that are doing the best now in the western U.S. (Carls Jr and In-and-Out)
Interesting statement. I didn't think that any Carls' Jr. or Inn and Out outsold McD's anywhere anytime worldwide.
I agree they already have plenty of V8's. How about putting the 6 from the Camaro in there, thats 300HP and decent mileage?
Save the big V8 for the SS version, have a less powerful, smaller V8 as an option.
As for the Cruze and all Chevy cars, (except Camaro and Vette, for now anyways!) when they lose the Chevy truck grill, I might consider em. Even Ford learned this lesson........3 bar "Fusion" grill on everything? They are moving away from that.
Bob would have sold more cars to regular folks by getting a subscription to Consumer Reports and fixing all the black dots.
If Lutz is like most posters here Consumer Reports is the last place he would look for any kind of info regarding cars. Didn't they give Toyota years of free passes? That is, of course, before the massive recalls which cause them to switch gears.
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They are with the Cruze and, one would expect, the Verano. That should cover the $15-25K club. While I've yet to see one, many people have complained that the Jetta for $15K has been cheapened. If this is true, then a $15K Cruze may not be a bad deal. However, that will depend on people actually sitting in them and poking and prodding them.
Look pretty simple stuff. GM needs some vehicles like when Ford introduced the Mustang back in the 60's. They sold something like 400K Mustangs that year. Then they said okay let's give Mercury their version the Cougar, and we'll sell a few hundred thousand more per year.
If you think this strategy of taking so-so volume vehicles and making numerous brand-models out of it is good, then explain why that same strategy that GM had the last couple of decades failed? How do you explain that the same strategies that were proven to fail over years, are now suddenly going to make them $? You fail to acknowledge that many of the people who are sitting in their offices in front of the computer looking at their cost to make a vehicle don't have a real understanding of how that cost is calculated. I know. I work in a Mfg. facility, it isn't that big, and the managers and Mkt. people have no clue how inaccurate the costs on their system can be. They assume that if Part 1 costs $100, they can spinoff Part #2 and that will also cost $100. But it doesn't! Because in putting in the tooling and work to setup Part 2, they have added more than just linear costs. After setting up Part 2, Part 1 and 2 might cost $120 ea. But most internal accounting systems aren't setup to catch that and will simply display $101 when rerolled. What happens to the other costs? Well they're just spread in Overhead to all the other parts in that factory.
I've worked in Mfg. Eng. for years and do costing. I know how manufatcuring accounting works and I know how Msoftware systems like SAP and Oracle handle and calculate costs, and the few people who understand it.
And I'm telling you that the worst thing any manufacturing organization can do is to proliferate the number of parts and split its market into smaller and smaller shares for each product!! Now if you would like to tell me of your experience in manufacturing costing, please tell me, and we can share war-stories. GM understood this somewhat by dropping a couple of brands to minimize its models. It was not able to go further in dropping more brands, because it could not realign itself with its dealers, also because as I said they did not dissolve GM and start with a clean-sheet of paper.
GM needs to resist the inefficient demands of each brand to have a model in each possible sector of the consumer market, to sell 30K rebadged model X. GM or any other manufacturer does not make $, at least in moderate priced vehicles by selling in that sort of volume. GM gets away with that with the Corvette as the average price is probably around $65K, with a good margin.
Still waiting before I even think about looking at a GM product as a transportation option.
So, make 1 clone or 3, it all sounds like the same failed plan to me.
Just not that impressive and the price is no where near optimum for any sizable gains in the US market.
China? OK. But we're not there. Perhaps soon GM won't be here!
Regards,
OW
GM's road to success is simple - and I should get a free car if they actually do this, as they'll save hundreds of millions
- Consolodate all brands into one GM badge.
- Offer one and only one trim level per vehicle brand.
- Higher trims of the same platform are marketed as different brands.
ie - Chevy X/Buick X/Cadillac X
This is kind of like what they did in the late 80s with the Pontiac/Olds/Buick/Cadillac sedans that were almost identical, but the idea is that instead of having a Verano CL, CX, CXL, etc - it's just *one* vehicle and the "trim levels" are "Chevrolet/Pontiac/Buick/Cadillas - or whatever they want to use since it's just a name at that point. But make each trim level like it was in the 50s and 60s - a huge difference between them.
Base trim of the same car is the Chevy, middle is Buick, top is Cadillac. Like the Acura TSX, offer essentially no real options other than sunroof/audio upgrade and nav. to keep production costs down.
This would make a car like the Cruze(now)/Verano(soon)/BTS(likely) need a total of 3 toolings instead of 9-10. That's an enormous savings in the long run.
Keep the manufacturing as simple as possible to keep costs low. Use the low costs to sell more vehicles which in turn reduces costs further.
GM shouldn't be trying to please every potential customer by making all sizes and shapes of vehicles with multiple types of styling. GM simply needs to convince 4M to 5M people here in the U.S. to buy 1 of their vehicles. That would give them 30% market-share. GM and many other manufacturers need to focus on what they want to be, rather then trying to be in all markets. It's like trying to wage war on 3 fronts. Pick a few things you want to do, and do them darn well!
And what was the Mustang??? A rebodied Falcon/Comet. 400,000 units, while not impossible is getting tougher to come by as competition becomes stronger.
No matter how you look at it, the 2 crossover platforms are selling well in all variants. 550,000 units with gas at $3/gal is nothing to sneeze at.
Sure it's tough to come by! That's one of my points. But a bankrupt company should not be spending resources on bringing so many "me-too" vehicles to market. They should focus their resources on a limited number of vehicles, and make those vehicles much better at the same or lower cost than the competition.
I'll forgive Chevrolet for bringing the Cruze out as they did, as it is quite an improvement over the Cobalt. But is the Cruze going to be the dominant vehicle in it's market against the new Elantra, Civic, and Focus? If not, why would you spend $1B+ to develop a model that is going to capture 15% of the market (maybe counting fleet sales). That is how you lose $. That is HOW GM lost money and market-share. That is how GM followed the road to bankruptcy. To spend more $ designing new sheet metal, lights, dash and some interior upgrades to give Buick dealers their version to sell another 40,000 units is ridiculous. And what makes it worse is there will probably be several models within that 40,000 units that need different parts.
If you don't think it is bad business strategy, then what led to the decline of GM over the decades, where they became so weak that an economic downturn made them go bankrupt? You can't believe that everything was great at GM, until the Fall of 2008.
For GM to make the Cruze a dominant player, they can't sit back now that the Cruze is on dealer lots. It's time to properly advertise it and be working on improvements to battle the competing vehicles coming on the market over the next 2 years.
That's where GM has failed in the past IMO. Bring out something new/redesigned and let it die on the vine over the next 6 years, often times make them worse by decontenting.
That's where Ford has really improved. Look at how many times the 500/Taurus was upgraded since 06. Same with the Fusion, Expedition (03 heavy refresh, 05 new v8, 07 heavy refresh) Edge, Mustang, F150 etc. They've all seen improvements (which they needed) to increase their competitiveness every few years.
I'm curious to see what GM does with the Regal going forward. I just watched Motorweek's review of it and they liked it other than the base Ecotec, they weren't fond of the 6sped auto either (something I've read often). A buzzy 9.4 0-60 time is pathetic in a something that's suppose to be sporty and somewhat premium. Add that the sluggishness isn't accompanied by stellar fuel economy and I ask myself, why? 19/30 is comparable to others in the class offering better performance.
Some may say, the 2.4 as a base engine is good enough. That maybe true, but when GM is trying to change it's image, you don't do it by being good enough. Surprise me, make me want to buy a Buick. There are to many good vehicles to buy to settle for a lack luster powertrain. The turbo model only makes it adequate IMO.
Yup, my mom bought one of those!
They didn't spend $1B to develop a model, they spent it on a PLATFORM. A platform (just like the Falcon/Comet/Mustang/Cougar) that can be used for different models. I can't imagine the tooling would be that much more for the Verano sheetmetal. One would assume that the Verano interior would "bolt up" in a Cruze even though it may look totally different.
The big difference is that 30 yrs ago, When you sat in a Lesabre and a Delta 88, you really knew it was the same car, same 307 V8 same dash (w/different guages) same seats (w/ different cloth).
Bottom line is if you sell 200,000 of the Cruze at an avg price of $21,000 and 60,000 Veranos at an avg $24,000 your profit margin is higher there.
I was looking at my Std Cat of American cars. In 1965 a base Impala V8 was $2676. A base Lesabre was $2968. The Jetstar 88 was $2862!!! The Catalina was $2809. All there were "B" bodied GMs. The base "B" body Caddy? A Calais. Price??? $5059!!!!
You are being highly optimistic if you think Chevy is going to sell 200K Cruzes. I went and sat in one; it was fairly nice. But priced too high. Without much trouble I can justify going and buying a Scion tC which is more powerful, better equipped, lower cost, and probably will have a better trade-in value. I'd buy a Honda Civic sight unseen, at the same price. A fully loaded Cruze should be less than $20K if it wants to get much market share and be competitive.
I just went and built a Cruze 2LT similar to a $20K Scion tC with auto. The Cruze 2LT was $23.6K, and that is with a little 1.4L engine.
Compare that to the Ford Focus
1999 55,846
Between 160 and 280K a year thereafter. (first model year sales - 342,000)
The Regal won't hit 40K at this rate. Figure 7 year production cycle at 40K a year and about 2-3K profit per vehicle (their profit over manufacturing cost - mostly add-ons, leather, nav - not dealer profit margins), and you're looking at ~550-800 million. True, they will still make money, since it's a re-badged Opel Insignia, and re-badging takes a few dozen million as opposed to a billion for a new platform, but it does nothing to deal with their enormous market-share loss. ie - if you're not growing, you're dying in this business.
Now, it's not a BAD move for them to try to re-work existing platforms from abroad as it saves enormous amounts of money, but let's be clear on one thing. Americans share more in common taste-wise with Australians than Europeans when it comes to the outdoors and especially vehicles. You need to NOT bring in more non-diesel Opels and the like (the diesels are good, and represent the lion's share of the European Opel sales - even they hate the gasoline versions) and instead bring over some of the very decent Holden cars. A little re-badge and some DOT parts and you're set.
Take a page from Carl's Jr's playbook. In the middle of the health craze and worry about calories and so on, they said "forget all of that - we're making what tastes good". Their food is unabashedly high in everything bad and yet they are doing fantastic. In times of economic hardship, people want their comfort food. GM needs to make "comfort food vehicles". RWD, big, aggressive. So that even if they don't have the sheer volume of Honda or Toyota any more, they still make cars that make your heart move faster. The Mustang is a perfect example of this - it's incredibly non-green in every possible way and yet it sells in huge numbers year after year.
Regal: 3700lbs and 182HP. 111 cubic ft. passenger/trunk space.
Cruse/Verano: 3100-3300lbs. 110 cubic ft passenger/trunk space.
Kind of a no-brainer which to buy. 400-600lbs lighter is an enormous difference, since the Ecotec Turbo isn't any better than a typical V6. Same power, same fuel economy. More expensive to own and repair. At 30K, I'm not impressed. Neither will the fleet and rental companies. That means direct customer sales only, and for that, just look at the figures for the Lucerne.
if you adjust for inflation, each of those would be about 6.73x that today (or 2009, the most recent numbers I could find. So, by today's standards, that would be...
Impala V-8: $18,009
Catalina: $18,904
Jetstar 88: $19,261
LeSabre: $19,975
Calais: $34,047
So at least they did maintain a bit of the traditional hierarchy in there, with a Pontiac being more expensive than a Chevy, then the Olds, then the Buick, and then the Caddy. But the B-O-P cars are really too close together in price. It worked back in the 1960's, when the cars had much stronger individual identities and were more unique (even if they were all B-bodies), but it wouldn't work today.
And, oddly, while the cars were priced properly in the hierarchy, there was actually an inverse relationship when it came to engines. A '65 Catalina had a 389 V-8, while the Jetstar had a 330, and the LeSabre just had a 300!
That wasn't the case for the likes of the G6, Aura, Solstice, Cobalt, GTO, G8 and now apparently the Regal.
As for the Regal, isn't it going to be manufactured stateside soon? So maybe that will improve the production costs to the point where it can be equipped properly.
I still haven't seen one on the road and I'm always out and about.
http://en.wikipedia.org/wiki/Chevrolet_Cruze
Moving production just adds to the cost. Shipping overseas in bulk is cheap. And, honestly, they should have merged Pontiac and Buick into one brand, since most of the Pontiac vehicles at the time sold better. Killing off an entire line to keep three vehicles nobody cared about was a truly stupid move. Doubly so since Buick is a niche market with massive competition from normal makers.
Compare an top trim Accord V6 to a LaCrosse. Styling aside, the vehicles have many of the same features. But if you compare a top trim Malibu or Impala, there's not a lot of difference, either. Buick is unfortunately useless at this point and also needs to either go or they need to use it as a place to put vehicles like the G8 back into their lineup. Think up a name for it and cars like it from Holden and bring it over.
Or, better yet, kill off Buick entirely and bring Holden over here. It's a well respected name in Europe and Australia and most of the rest of the world. This would free GM from its age-old dealership contracts (there aren't a lot of Buick only dealers to begin with) and allow for a new face and new models. And also a place for more aggressive models. Chevrolet would be entry level and rental stuff, performance and fun would be Holden, luxury would still be Cadillac.
Well, I can dream, no?
It sells well there and GM was worried that if Buick was closed - it would affect its image in China and sales would may be take a beating there.
That's what I'm thinking
If autos were only about functionality then they wouldn't need to put so much effort into making so many different colors and changing them each year, or all the other non-functional updates that are made. Anyone for an a side-order of chrome wheels?
The image of Buick in China is that of a wealthy well settled American man who rides in a quiet sedan driven by a chauffeur. it basically indicates a successful man/woman in their careers and now have the luxury to be driven around. Different strokes for different blokes I guess ! And no one wants to buy from a brand that does not exist anymore in US. Hence , Buick was kept alive here. :P
That's the Holden Ute, which is quite popular Down Under. GM briefly considered bringing it to the states badged as a Pontiac, but the decision to close down the Pontiac brand, along with the BK, shelved those plans.
Not sure there is a business case now that would allow GM to federalize the car for sale here, given that it would probably sell in very low numbers.
I believe GM is doing the right thing by focusing on the C segment (Cruze, Verano) and B segment (Sonic), plus the R&D into hybrids and plug ins (Volt), given that the price of gas is almost certainly going to increase ($4? $5? More?) in the next 3-5 years.
You buy a Buick Regal GS to continuously see the rear view of the Sonata 2.0T...particularly when you run out of gas as the Sonata continues on.......and then you will never catch up! :shades:
You buy a Enclave knowing there are 2 other models with different skins that make your purchase a typical GM buy of the ages...nothing special, just me, too. :P
Regards,
OW
No, given the dimensions, I would agree that keeping a base Lacrosse at $25,000 and a Verano based at $21,000 and doing away with the Regal would make sense. Both cars could come with the 220 hp 2.0 turbo standard, as well as a 6 sp. man.
the ford dealer only had 7 or 8 fusions that i could see and 4 or 5 Tauruses. the buick dealer had at least 15 regals. they were parked every where. Not a bad looking car as this is the first time I've seen one in person. But it looks like they are piling up on the lot.
Too bad!!!
So far, GM has sold 270,000 Delta II vehicles worldwide, not including NA sales. Add another 28,000 NA Cruzes to that. Volt production (Delta II based) has been increased from 10,000 to 25,000 for the first year. And GM just signed a contract w/ SAIC to build $900 MILLION worth of cars and components HERE for EXPORT to CHINA (per Automotive News)
Considering the platform will be around for another 8 years, They'll make the $4 bil back in spades.
BTW thanks for the tax money.
I still don't understand this car - its too close in price to the LaCrosse and I don't think most people turn to Buick when looking for a small sporty car? If Buick wants a sporty car they should bring out a new Riviera.
I just read that GM wants Buick to be a luxury division Lexus fighter, while Caddy takes on MB. I understand not wanting to be called near luxury and its potential implications, but both Ford and GM need to be careful on pricing vehicles too high and then having to rebate them which inevitably seems to hurt vehicle image and residuals.
IMO, GM is asking about $5K too much on each of its vehicles. To be competitive here in the U.S. where GM's image is tarnished from years of so-so vehicles, and of course the BK, GM should have its prices 5% to 10% less than the competition when comparably equipped.
GM can dream all it wants, but very few people shopping for a Lexus would consider a Buick. It's like someone deciding to shop at Brooks Bros. or Penney's. It doesn't happen often that someone is trying to decide between the two.
No, IIRC as it stands a base Verano will come with the 2.4 for around $21K. My point would be if you axed the Regal, repriced the base Lacrosse w/ a 2.0 turbo for $25K, then base the Verano w/ the turbo at $21K you could even scale back the 2.0 to 200 hp in the Verano, and leave it at 220 in the Lacrosse. The higher HP (276??) could be an option for the Verano (GS??) which would be fine because the 3.6 in the Lacrosse is now 281 hp, and you could easily up it to 300.
".....GM can dream all it wants, but very few people shopping for a Lexus would consider a Buick. "
Not true. The coin dealer I deal with traded in his ES for a Lacrosse CXS, and I've had a couple people driving an ES or Acura complement me on what a nice car my Lacrosse is. They may not buy one ( my FIL's friend LOVES my car, but opted for a loaded Crosstour instead), but people have sure sat up and noticed what a great car the Lacrosse is.
BTW, through Nov. the Lacrosse outsold the ES 56-43K, and Buick came w/in 11,000 cars (not trucks, 100K-89K) of Lexus, with half as many models.
No, those buyers just go with a Camry;) It's still selling surprisingly well.
Yeah, the LaCrosse certainly has to appeal to a wider range of people based on price alone, plus it is newer and better looking car IMO.
But the avg. transaction price is probably significantly higher for the ES vs. LaCrosse.
I saw a Cruze....no thanks. Chevy truck grill, nothing to set it apart from other sedans, "styling" on the Cruze alone would keep me out of the Chevy showroom.
You are going to see more and more vehicles as they are redesigned offereing the 2.4L and smaller engines like the Cruze.
Every vehicle manufacturer will be bringing down their average engine size over the next decade.
The future is not 4,000Lb 190" long V-8 powered sedans, or anything else in that size, except PU's. You're going to see a lot more Sonics, than you're going to see G8's or GTO's. (The Sonic hatchback is a vehicle I actually could see myself looking into, if they keep it priced around the Fiesta or Mazda2).
Wow. What a smack in the face to Government Motors Engineers. Can't even count on anyone in the organization to get it right.
They said the same thing about ten years ago during the health food craze about fast food. The two chains that went against the trend and said "so what - we'll make old-school burgers anyways" are the two that are doing the best now in the western U.S. (Carls Jr and In-and-Out)
GM needs to start making more crazy and inappropriate vehicles rather than conforming to the greater beige jellybean movement.
But the fast-food industry didn't have the equivalent of CAFE did they? The difference is auto manufacturers have a federal regulation that they meet certain mpg ratings which are significantly increasing. The average mpg is increasing to 35 soon, and then 50mpg or so by the end of the decade? So you need to have a lot of fuel-sippers compared to gasoline V-8's. So you do the math and tell me how GM can sell vehicles with an average 50mpg if they're going to focus on larger V-8 engines.
If you check most rumors on the next-gen Corvette, you'll see even that isn't exempt from downsizing to a 6 cyl turbo.
Interesting statement. I didn't think that any Carls' Jr. or Inn and Out outsold McD's anywhere anytime worldwide.
Save the big V8 for the SS version, have a less powerful, smaller V8 as an option.
As for the Cruze and all Chevy cars, (except Camaro and Vette, for now anyways!) when they lose the Chevy truck grill, I might consider em. Even Ford learned this lesson........3 bar "Fusion" grill on everything? They are moving away from that.
If Lutz is like most posters here Consumer Reports is the last place he would look for any kind of info regarding cars. Didn't they give Toyota years of free passes? That is, of course, before the massive recalls which cause them to switch gears.