Pierre Chevrolet Blog

While the market share declines of the mainstream domestic brands during the past decade have been well documented, the price declines of these brands relative to their Asian competitors have received less attention.

As the domestics pushed product vehicles through their dealer networks, allowed models to languish on the market longer than their Asian competitors, and suffered from perceived — and frequently actual — inferior quality, they were forced to ratchet up incentives to lower prices to turn inventory.

However, there is recent evidence that at least one full-line domestic marquee – Chevrolet - has been able to price closer to its Asian competition, a needed improvement if GM is to fund new product programs and compete effectively over the long run.

The average actual transaction price of Chevrolet products in four key segments (segments in which Chevrolet, Ford, Honda and Toyota all have entries) have been higher than that of three mainstream competitors, based on transaction data from Edmunds.com for the period September 9 – October 7.

While Chevrolet’s average price was only about $240 above that of Honda, it was more than $1,700 above that of Toyota, due to Chevrolet’s higher prices in three of the four segments.

The Equinox is enjoying a $1,000-plus price premium over theToyota RAV4, and while one could argue this is because the Equinox has just been re-designed, one could respond that during virtually any time period there will be re-designed models on the market. If another time period had been used, a re-designed Toyota product may have been hitting the marketplace.

Further, such a contention is countered by the fact that the Cobalt, long in the tooth and about to be replaced by the Cruze, is selling at a higher price than the Corolla.

One could also argue that Chevrolet’s prices are artificially high because of the inventory shortages resulting from the success of the “Cash for Clunkers” program, but in fact data from that program consistently indicate that the Asians enjoyed more success than the domestics and therefore would have had even lower inventories relative to pre-Clunkers levels.

The parity of Chevrolet and Toyota pricing suggests – at least in these four segments - the consumer perceives Chevrolet products to be of similar value to those of Toyota, a finding we have not seen for years.

Recently General Motors posted a video on YouTube teasing six-new Camaro stripe designs that will be on display at the 2009 SEMA Show. In the backdrop for the video there is also a rather wild looking pickup truck, which is believed to also be a special projected also headed to SEMA.

Reported to be called the Silverado Baja Off-Road, this pickup gets some serious restyling with a huge grille, flared fenders and a suspension lift. Presumably, the idea behind the truck is to build a conceptual competitor to the Ford F-150 SVT Raptor, although the oversized wheels and low profile tires are a strange addition for an off-roader. Then again, this is SEMA.

Unless GM lets anything else slip out between now and November 3rd, we’ll have to wait for the truck’s reveal at the 2009 SEMA Show.

Check out the video after the jump:

The first thing you notice about this truck is massive front grille and revised bumper. It also appears that the front and rear fenders are special to this version of the Silverado. Additionally, an apparent interior photo is also on the display board, but obstructed by the designer discussing the Camaro. If actually a production vehicle, the Silverado Baja would be a direct response to Ford’s recently-launched F-150 SVT Raptor. Expect more information in the coming weeks from the SEMA show in Las Vegas.

Chevrolet will spend $202 million to renovate its Flint Engine South factory to build 1.4-liter four-cylinder engines for the highly anticipated Chevrolet Volt–and for a small car that likely will be even more crucial to Chevy’s future success, the Cruze.

The automaker also will spend about $28 million on three other plants in the Flint, Mich., area to help build the 2011 Cruze compact and the Volt.

GM is scheduled to launch the Cruze next spring. Production of the Volt, a plug-in hybrid sedan, is scheduled to start in November 2010.

The Flint engine plant will produce 40 engines per day when production starts late next year. Output will rise to 800 engines a day by fall 2011, GM officials said.

The engine for the Cruze will be turbocharged. The Volt’s engine, which will power a generator to create electricity for the motor that propels the car, will not be turbocharged.

The initial batch of engines for the Chevy Volt will be imported from a GM plant in Aspern, Austria, until the revamped Flint plant begins production.

The other GM plants that will be updated and retooled are the Flint Metal Center, Flint Tool and Die and Grand Blanc Weld Tool Center.

GM says the key functions at the plants will include development of automated equipment and tooling for the Cruze and Volt assembly plants. The Cruze will be assembled at Lordstown, Ohio, and the Volt at the Detroit-Hamtramck plant.

The operations will develop dies and stamp body panels and components for Lordstown and Detroit-Hamtramck.

GM is spending about $30 million on the Grand Blanc plant to build robotic weld tool cells that will assemble the Volt body at Detroit-Hamtramck.

General Motors India (GMI) expects to increase its total vehicle sales in the country by 10 percent and is also targeting to sell about 1,500 units of its new model Chevrolet Cruze this year.

“We expect 10 percent growth this year and plan to sell close to 75,000 units this year against last year’s 65,000 units.” This year’s growth could be in double digits, GMI Vice-President P Balendran told reporters here.

“We have received 1,200 orders (for the new model) and expect to sell about 800 units a month initially,” he said.

Balendran said that in Kochi, orders for 22 cars have already been received.

Despite the recession last year, General Motors registered a 9.6 percent growth by selling 65,702 units in 2008 against 60,032 units sold in 2007, he said.

GM’s new mini car will be rolled out by December this year and it would be a premium hatchback, he said adding the company had also entered into a MOU with Reva for manufacturing electric car by October next.

Ever wondered who names the colors of things like the sweaters, paint, and cars. Who gets to decide which shade of red is spicy enough to be “Caliente” or cute enough to be “Valentine” or hot enough to be “Red Hot?” Are there specialists whodeal only in beiges and grays, others who are experts in primary colors? Who gets to decide what’s gray and what’s silver? It sounds easy, but once you start thinking about it, it’s a challenge, to be honest, and not a job I think I would want.

But it may be a job YOU want. If you have an idea for what Chevrolet ought to call that unique warm-gray-silver of the Volt, they’re currently looking for someone who knows the difference between “platinum” and “diamond” and “lightning” to name that shade. Or hue. Or whatever.

If you have an idea, submit your entry on the Chevrolet Volt Facebook page, Chevrolet VoltAge, or better yet at GM-Volt.com. Entries must be received by 8:00 a.m. EST on November 4th. You may submit as many entries as you want. Bear in mind, by the way, that “diamond” is already used by Cadillac to describe one of their whites, and “platinum” by Pontiac for one of their silvers. So many words, so many connotations!

When General Motors CEO Fritz Henderson met with the company’s new Board of Directors earlier this month, he didn’t tell them the future was riding on the much-hyped Chevy Volt. The Wall Street Journal reports, “Mr. Henderson said the most important product launch in 2010 will be the Chevy Cruze, a small car developed overseas to better compete with Honda Civic and Toyota Corolla.”

Early reports say the Cruze is a significantly more refined vehicle than the Chevy Cobalt it replaces, but winning the compact car war with the Japanese may depend, in a post-recession market, on fuel economy.

With that in mind, Motor Trend reports, GM is aiming high. “Enter the Special Project, GM’s high-fuel-mileage version of the Cruze, fashioned after Chevy’s Cobalt XFE and Silverado XFE. Engineers reassigned from GM’s Performance Division are tweaking the 1.4-liter turbo and the Cruze’s six-speed automatic with the goal of achieving 44 mpg in EPA highway-mileage estimates.” A 44 mpg rating would make the Cruze more efficient than a Honda Insight hybrid - without the benefit of hybrid technology.

If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.

Just a tiny fraction of Chevrolet and GM customers have returned their cars for refunds under the automaker’s heavily advertised money-back guarantee program — and most buyers aren’t even choosing to participate in the plan, opting for a rebate instead.

About 400 vehicle buyers, or “less than 1 percent” of sales since the program launched, have signed up for GM’s 60-day money-back guarantee program, spokesman Tom Henderson said Tuesday. The rest took a $500 rebate, he said.

Of those 400 vehicles, just 15 have been returned in the four days since customers could begin doing so, Henderson said.

GM launched the money-back guarantee program on Sept. 14 with an advertising blitz, including TV spots starring GM Chairman Ed Whitacre, in a bid to get on-the-fence vehicle buyers to consider GM products after its stint in bankruptcy court this summer.

The program runs through Nov. 30 and allows customers to return any new 2009 and 2010 Chevrolet, Cadillac, GMC or Buick vehicle for a refund of the purchase price and sales tax if they are unsatisfied with their vehicle.

The policy allows buyers to return their vehicle between day 31 and day 60 of ownership, meaning the first refund requests started coming in on Thursday. Reasons for the returns have been “across the board,” Henderson said.

One returnee was the buyer of a Chevrolet Corvette, who bought the sports car with a manual transmission and found it “painful to shift,” GM Vice Chairman Bob Lutz told reporters during a briefing last week. Once the buyer returned the Corvette, he wound up exchanging it for the same model — but with an automatic gear box, instead.

The return had nothing to do with dissatisfaction with the car other than the choice of transmissions, Lutz said.

“He brought it back because he made a mistake,” he said.

General Motors announced it will invest more than $21 million to produce the 2011 Chevrolet light-duty crew cab at the GM assembly plant in Flint, Mich., beginning in mid-2010.

GM Flint Assembly is GM’s sole producer of GM’s heavy-duty crew cab trucks, the Chevrolet Silverado and GMC Sierra. Flint Assembly also produces the heavy-duty regular cab Chevrolet Silverado and GMC Sierra. The $21-million investment in the Flint Assembly plant will include renovating the existing heavy-duty assembly process, new machinery, equipment, and tooling to support the light-duty crew cab production in the plant.

The 2010 Chevrolet Silverado and GMC Sierra have best-in-class fuel economy at 15 miles per gallon in the city and 22 highway.

Construction at Flint Assembly is slated to begin in the fourth quarter of 2009 and production is scheduled to begin in July 2010.

Chevrolet and GM’s U.S. retail market share is being projected to climb 3.3 percentage points this month over the past three months’ average. Such a feat would be a win for GM and could help silence some industry doubters who have questioned assumptions GM used in crafting its turnaround plan.

The success of GM’s plan is largely based upon its market share expectations and overall sales growth from the historic lows of the past year.

If the Detroit automaker is able to keep about 20% of the U.S. total sales market, it should do well.

Several industry analysts have questioned GM’s market share projections, saying the figure is overly optimistic.

So a prediction by Edmunds.com on Friday that GM could see a retail market share of 22.4% this month was well received by GM officials. The share gains are being taken mostly from Chrysler and the Korean automakers, according to Edmunds.

“GM is benefiting this month from its recent product launches in key volume segments, an abundance of media coverage, including positive reviews of its new models, and a surge in ad spending on its new campaign,” Edmunds Chief Executive Officer Jeremy Anwyl said in a statement.

General Motors has seen month-over-month market share increases since emerging from bankruptcy. Going forward, the Detroit automaker will need to see sales increases among the four brands it is keeping in order to offset the losses from the wind-down or sell-off of its Saturn, Pontiac, Saab and Hummer brands.

GM reports that the four core brands it is keeping — Chevrolet, Cadillac, Buick and GMC — saw a market share increase of 2.9 points in September over July, when GM emerged from bankruptcy.

The automaker credits the launches of new products, which include the Buick LaCrosse sedan, GMC Terrain, Chevrolet Equinox and Cadillac CTS Wagon.

“We’ve got some great launch products out there. We’ve been doing really well from a marketing standpoint in getting our message out there and getting people to consider our cars,” said spokesman John McDonald.

GM’s overall market share ended September at 19.7% for the year so far.

According to GM’s May plan, the automaker hoped to end the year with an 18.5% U.S. share. Its April turnaround plan assumes a share of 18.4%-18.9% going forward. The plan calls for GM to be able to break even in a U.S. market of just 10 million sales a year.

The year-to-date figures are not as encouraging for GM’s four core brands, which dropped to 16.8% from 18.5% during last year at the same time, Autodata Corp. said.

October is an important month. October 2008 marked a dramatic fall-off in U.S. sales as the economy plummeted and many feared that a recession would become a depression.

He added: “But how does (GM) fare with everyone else in the rest of the market? Will sales at competitors be stronger? I can tell you that Toyota isn’t going away. … And Ford right now has such a strong product pipeline.”

GM executives face intense pressure to prove their market-share predictions are on track. Chairman Ed Whitacre has made it clear that CEO Fritz Henderson and his team must show results in upcoming weeks.

Getting sales market predictions and assumptions correct are incredibly important for managing an automaker because it is hard to change course midstream if those things are wrong.

That means a company can either lose money because it has too many new vehicles or miss out on potential sales because it has too few. Analysts have questioned whether GM can keep its share constant with the loss of four of its eight U.S. brands.

IHS Global Insight’s U.S. market-share predictions call for market shares of 17.2% at Toyota, 16.8% at Ford and 16.1% at GM.

The firm says GM’s market share will be heavily impacted by the loss of four brands, especially Pontiac. Analysts have equated the loss of Pontiac to Toyota losing Lexus.

“The company can still be profitable at this level. It means the market overall has to be a larger market, which it will be,” Bragman said. Because the economy hasn’t yet recovered, Bragman is hesitant about current market results.

Team Chevy drivers have won 16 races in ’09, more than any other manufacturer

Team Chevy drivers have lead the most laps in ’09 – 4,637 of 8,553 (54.2% of all laps raced)

Team Chevy drivers have had more top-five (5) finished in ’09 – 76 – more than any other manufacturer

Team Chevy drivers have had more top-10 finishes than any other manufacturer in ’09 – 148

Team Chevy has six drivers in the 2009 Chase for the NASCAR Sprint Cup, more than any other manufacturer. Currently Team Chevy drivers hold the top-five Chase point positions. With six races remaining, Team Chevy drivers rank as follows:

• Jimmie Johnson, No 48 Lowe’s Impala SS, is the points leader with five (5) wins to-date in 2009
• In 16 Lowe’s Motor Speedway (LMS) starts, Johnson has five (5) wins, eight (8) top-five, 12 top-10 finishes and three (3) poles
• Mark Martin, No. 5 Pop Tarts/ CARQUEST/ Impala SS, is second (2nd) in the Chase standings leader with five (5) wins to-date in 2009
• In 49 previous LMS starts, Martin has four (4) wins, 17 top-five and 22 top-10 finishes with two poles
• Juan Pablo Montoya, No. 42 Lysol Impala SS, is third (3rd) in the standings after four (4) Chase races
• Has five (5) previous starts at LMS with one (1) top-10 finish
• Tony Stewart, No. 14 Old Spics/ Office Depot Impala SS is fourth (4th) in the Chase points order with four (4) wins to-date in 2009
• In 21 LMS starts, Stewart has one (1) win, six (6) top-five and 11 top-10 finishes with one pole
• Jeff Gordon, No. 24 DuPont/Transformers 2 “Revenge of the Fallen” Impala SS, is currently fifth (5th)in the Chase standings with one (1) win to date in 2009
• In 18 starts at LMS, Gordon has five (5) wins, 15 top-5 and 18 top-10 finishes with seven (7) poles
• Ryan Newman, No. 39 U.S. Army Impala SS, is 10th in the 2009 Chase standings
• In 17 LMS starts, Newman has four (4) top-five and six (6) top-10 finishes and eight (8) poles

IMPALA SS ON THE TRACK: LOWE’S MOTOR SPEEDWAY:
A Team Chevy driver has won 36 of the 101 points-paying NSCS races held at LMS, more than any other manufacturer
Jimmie Johnson, No. 48 Lowe’s Impala SS, has five (5) previous Lowe’s Motor Speedway (LMS) wins (’03, 2-’04, 2-’05)
Jeff Gordon, No. 24 DuPont/Transformers 2 “Revenge of the Fallen” Impala SS, has five LMS race wins (’94, ’97, ’98, ’99, ‘07)
Mark Martin, No. 5 Pop Tarts/CARQUEST Impala SS, has four (4) wins at LMS (’92, ’95, ’98, ’02)
Jeff Burton, No. 31 Caterpillar Impala SS, has three (3) LMS victories (’99, ’01, ‘08)
Casey Mears, No. 07 Jack Daniel’s Impala SS won at LMS in ‘07
Tony Stewart, No. 14 Old Spice/ Office Depot Impala SS, has won once at LMS (’03)

TEAM CHEVY IMPALA SS – FROM THE DRIVER’S SEAT:
JIMMIE JOHNSON, NO. 48 LOWE’S IMPALA SS: “Without a doubt, it really would be nice to win there. It has been a great relationship with the track and Lowe’s and then all the victories we have had there have been really neat. The track, I really think since it was resurfaced, it just changed the dynamic of the race for us. I had some lines that worked really well. I think our setup worked really well for the abrasive track. Rough tracks with bumps and things like that seem to work well for me with my background. I just worked. It was one of those tracks that just worked. They ground the track and it still worked well for us. We came back and it was resurfaced and we were competitive but we didn’t have an advantage by any means. I really think the surface has a lot to do with it. It has made the track more forgiving than it was in the past and I think it helped close the gap. I am hoping the track hurries up and ages and gets rough and bumpy and turns back in to the track it used to be. We work on stuff each time we go back. This year I think we’ll be better yet. Last the few times we have been there, we have just been super tight and needed more front grip with the car. I think we are a little smarter even from the All-Star and the Coca Cola 600 weekend, we’re smarter now than we were then and hopefully it makes a difference.”

MARK MARTIN, NO. 5 POP TARTS/CARQUEST IMPALA SS: “I really like this racetrack. From the first time I raced on it, it just was a natural fit. Lowe’s (Motor Speedway) reminds me a lot of the banked dirt tracks I would run back home, only a lot bigger of course. Plus, with it being right by Hendrick Motor sports, I’d love to win this one for Rick (Hendrick, owner) and Alan and the guys. The team and I are really focused on the racing and not so much focused on……….what the reality is, the racing decides. We’ve gotten better as the season has gone along so we have been working together and have gotten some of the things going that we didn’t have. We had maybe an extraordinary amount of things that kind of plagued us or got us and those things have settled down now. I have a lot of confidence in the performance of this race team and see how it works out. Right now we are not really focused on all of that down the road, we are focused on the racing and going to let the racing decide.”

JUAN PABLO MONTOYA, NO. 42 LYSOL IMPALA SS: “It’s incredible. We have four or five top finishes in a row and I’ve been losing points to the leader. It is what it is. I think you ain’t going to make any points on anybody. Everybody that runs good is going to be there. You just got to make sure you don’t lose any. Once you pass Martinsville and Talladega and you look at the points you say okay, what do we need to do for that? Doesn’t matter how many points. We’re doing Top 5s every week. We hope to keep doing that. It would be nice if we can get a win soon and we can move on. When we started the Chase I was 40 points behind already. We’re getting Top 5s, and Top 5s here left and right. You know, we’re getting close to our first win. We know it’s going to happen. But I think that’s why we fall behind in the Chase. Did you think we were going to be this competitive when the Chase started? No. We just wanted to make the Chase. And we played our strategy to make the Chase.”

TONY STEWART, NO. 14 OLD SPICE/OFFICE DEPOT IMPALA SS: “We have a lot of racing left. I am really proud of Darian Grubb (crew chief) and all the guys on this Old Spice/Office Depot team. There is no quit in this team at all. We just keep digging. I don’t care what it takes, I don’t care if we have to go 12 laps down and have the right side knocked off of it if it gets us a top-five at the end of the day, that is what we have to do the rest of the season. At the end of the day, no matter what the circumstance that got us behind, we’ve been able to rebound from it, not get all the way up to where we wanted, but we were able to make gains on it at the end and salvage a better finish than where we were. Whatever the scenarios were, we were able to overcome part of it. As long as you do that at the end of the day the facts just shows this team doesn’t have any quit in them, and that’s what it’s going to take to get back on top.”

JEFF GORDON, NO. 24 DUPONT/TRANSFORMERS 2 “REVENGE OF THE FALLEN” IMPALA SS: “We’re doing everything we can to be good enough, but it’s just not there. So we’ve got to search and find something. I feel like Charlotte’s a good track for us, and I’m looking forward to going there. And hopefully we can make up the ground that we’re lacking. Maybe it’s just in the set-up. Maybe we’ve got to look at our cars a little bit more. Charlotte is going to be intense just like we’ve seen on the double file restarts there for the All-Star event. It gets pretty crazy. So, you know, I think it’s every weekend. Every track.”

RYAN NEWMAN, NO. 39 U.S. ARMY IMPALA SS: “Really, it’s just nice to be home for that weekend. I really enjoy it. I like Charlotte. It’s one of my favorite racetracks. So having it in the backyard is really nice. I wouldn’t say it’s a time where we re-group. I think there is more regrouping this coming week because the cars are already on their way out to California so there are a lot less things that you can do. So regrouping, not necessarily; but just to be home and enjoying some more time with the family is probably a good thing for everybody.” We ran really well at the first race there. We were in position to win the All-Star race. We won the pole. We led some laps in the 600 and I think we have a really good car. Our program for there, I don’t think it’s any different the second race than it was the first race.”