GM hustles to make the Malibu competitive
DETROIT — Car executives typically don’t talk about future models more than a year before they hit showrooms for fear of dampening enthusiasm for the current one. But in the case of the Chevrolet Malibu, there’s not much enthusiasm to dampen.
Since its redesign for the 2013 model year, the Malibu’s share of the competitive midsize car market has slid. Sales are down 7 percent this year, the only decline among the segment’s top eight sellers. In the past two months it was outsold by the Chrysler 200 and Kia Optima, once distant also-rans.
Chevy is trying to revive Malibu sales with some screamin’ deals this month. It’s offering $3,500 in cash off the car and its $189-per-month, $1,369-down lease is the industry’s hottest deal, Kelley Blue Book said last week.
But behind the scenes, General Motors is hustling to get the next-generation Malibu to market about a year from now in hopes of finally fixing a perennially weak link in Chevy’s car lineup. That would be faster than the usual cycle for GM (the redesigned Cruze, due out around the same time, will have been on the road more than a year longer).
And departing from their close-to-the-vest posture on future products, GM executives are itching to talk about the next Malibu.
“We’ve got our act together here on the midsize-car segment,” Mark Reuss, GM’s product development chief, said as he showed an image of the next-gen Malibu at an investor presentation in October. He promised it would have “groundbreaking design but also groundbreaking technology.”
“When is the last time you saw a [midsize] car this distinctive and this dramatic from General Motors?” Reuss said.
GM CFO Chuck Stevens said at the same conference that the next iterations of the Malibu and Cruze would cost less to produce but command higher transaction prices, which he said should lead to roughly $800 million in improved variable profit in 2016.
Welburn: “A significant statement”
And in an interview this month, GM global design chief Ed Welburn said the next Malibu’s design will “make a significant statement” with “a very passionate design.”
Midsize cars aren’t the growth engines they once were, but for Chevy the segment represents an important rung on the product ladder between its successful small cars and more profitable crossovers and SUVs. A competitive Malibu, GM figures, could keep Sonic or Cruze owners from defecting to another brand when they’re ready to graduate to a bigger vehicle.
It’s not as if car critics labeled the current Malibu a dog. It generally wins praise for a quiet, refined interior and smooth powertrain. The problem, GM execs concede, is that it fails to stand out in a segment that includes the Toyota Camry, Honda Accord, Ford Fusion, Hyundai Sonata, Optima and 200.
GM insiders say they knew even before its U.S. launch in spring 2012 that it had shortcomings that had to be fixed quickly. John Wolkonowicz, an independent analyst and automotive historian in Boston, remembers being shown the current Malibu when it was still under development at GM’s suburban Detroit design center in 2009.
“It’s too small. The rear-seat package is not competitive, and the styling is lackluster,” Wolkonowicz recalls telling GM execs.
|2014 Sales Jan. – Nov.||Pct. Change|
|Source: Automotive News Data Center|
The launch strategy didn’t help. GM decided to introduce the Malibu Eco, which uses a mild hybrid system, in spring 2012.
The volume car, equipped with a 2.5-liter, four-cylinder engine, came nearly six months later. Dealers say the staggered launch confused customers and stalled momentum.
GM executives have acknowledged that opening with the Eco was a misstep. When asked about it in late 2012, then-CEO Dan Akerson told Automotive News: “I don’t know if I want to wash my laundry in public.”
GM rushed a re-engineered Malibu to market in fall 2013 that tweaked the front-end styling, carved out a bit more rear-seat room and improved fuel economy with a stop-start system.
“It’s a great car. We see a lot of Chevy-loyal people buying it,” said Jeff Krapu, general manager of Rosedale Chevrolet near Minneapolis. “But we don’t really get people coming from competitor brands. I wish we did.”
You can reach Mike Colias at firstname.lastname@example.org.