Chevrolet Aims At Comeback in America
CHEVROLET cars were once an American icon. Today General Motors Corporation's Chevrolet division is struggling to win back American consumers.
In the early 1960s, one of every four passenger cars sold in America bore the Chevy bow tie. Today Chevrolet can claim barely a 12-percent share.
What went wrong? During the 1980s, the division made one blunder after another. Quality problems and design flaws alienated millions of potential buyers. Chevy lost its design edge by rolling out a line of "badge-engineered" vehicles virtually identical to those sold by other GM divisions. Even when it reversed course, Chevy was criticized for lackluster styling. Critics have derided the full-sized Caprice as "the beached whale."
"We dug ourselves a pretty deep hole," concedes Chevrolet General Manager J.C. Perkins.
Chevrolet has also fallen victim to the success of another GM brand, the new Saturn line, which ranked third in the recently released J.D. Power Customer Satisfaction Index. One of every seven Saturn customers are trading in Chevrolets.
Chevrolet's sales plunge has been perilous. In 1992, Chevy hit a 40-year low, selling just 1,000,891 passenger cars. In 1979, it had sold 2,158,839. Industry analysts say Chevy's slump has been the prime reason why GM has run so deep in the red in recent years.
Perkins insists Chevrolet is trying to "resharpen its own focus on its product." To get that point across, Chevy recently invited more than 100 automotive journalists to view advanced products, some of which will not hit the market until 1996.
One of the most critical vehicles is the next-generation Lumina sedan. When the current Lumina debuted it was intended to compete with such midsized mainstays as the Honda Accord and Ford Taurus. But despite a multibillion-dollar development effort, the Lumina never caught on, leaving several factories operating below capacity. The '95 Lumina is sleeker with a redesigned interior. The star of the preview was Chevy's new S-series pickup, and for good reason. A decade ago, Americans bought one light truck for every five passenger cars. Today, trucks account for 40 percent of the total market. Chevrolet sells more trucks than cars. A total of 1,163,368 pickups, minivans, and sport-utility vehicles were sold last year.
"Chevrolet sells a higher percentage of trucks than any other GM division," notes automotive consultant Jesse Snyder, of Autofacts, Inc. But Snyder adds that Chevy has been losing market share to the Ford Motor Co.
Despite Chevy's ongoing problems, month-by-month sales statistics suggest the division may have bottomed out. In fact, auto analyst Maryann Keller, of Furman Selz, Inc., asserts "the recovery process has begun."
During the first six months of 1993, Chevy sold 1,215,815 vehicles, up more than 10 percent from the 1,112,348 cars and light trucks sold a year earlier.
A new emphasis on quality has helped. But Chevy's nascent comeback would more likely be the result of rediscovering what once attracted the mass of American motorists. The division is again emphasizing price.
To test-market GM's new, corporate-wide "Value Pricing" program, Chevy shaved hundreds of dollars off the price of an option-loaded version of the Cavalier compact. Since then, Cavalier sales have shot up 26 percent.
When Chevrolet introduced an all-new version of the Geo Prizm last year, it was outsold almost 18 to one in the critical Southern California market by the Toyota Corolla. The two cars are essentially the same vehicles, produced as part of a GM/Toyota joint venture. By pricing the Prizm $1,000 less than the Corolla, the sales gap has shrunk to two-to-one.