Chevrolet Malibu: “Very Important” to GM and Chevy
August 21, 2007

Ask anyone at General Motors how important the upcoming 2008 Chevrolet Malibu is and you’ll likely get a rather reserved response.

Like the one Chevrolet General Manager Ed Peper (PEEP-er) gave AutoObserver in an interview Monday: “It’s a very important vehicle for us.”

That’s an understatement.

Still somewhat restrained especially for him, GM Vice Chairman Bob Lutz goes a tad further. In his GM FastLane blog, in which he wrote about his recent "weekend with a Bu," he called its introduction “one of the most important passenger car launches in recent General Motors history.” He added: “We’ve put a lot of blood, sweat and tears into this vehicle.”

GM executives’ caution is understandable and wise, since the automaker has oft been accused of over promising and under delivering. But the launch of the 2008 Chevrolet Malibu is beyond “very important.”

Let us count the reasons why:

1 – Size Matters

Size of the market, that is.

Though the midsize car segment has been shrinking, it is still huge.

Every year, automakers sell between 2.5 million and 3 million midsize cars. It used to be 4 million a year, but with the advent of more choices, including SUVs and now crossovers, midsize car sales and share of the total vehicle market have slipped. Since 2002, midsize car market share has dipped about 16 percent from 18 percent or more a year.

Still, that’s a big slice of the pie.

Or a lot of bread and butter -- as the segment is often called the bread-and-butter for carmakers.

The current generation Malibu has captured only a teensy sliver of that slice of pie. In 2006, Malibu sales totaled 129,596, not even a full factory’s worth. Its share of the vehicle market ran under 1 percent for all but one month of last year, whereas it was over1 percent and even approaching 2 percent in earlier years.

GM executives are reticent about their volume and share goals for the 2008 Malibu. But clearly they are gearing up for significant improvement.

The Malibu is being assembled at GM’s Fairfax, Kansas, factory. But only today, the Detroit Free Press reported that workers at GM’s assembly plant in the Detroit suburb of Orion Township, which builds the Pontiac G6, have spotted Malibu or two rolling down their assembly line, hinting that GM is preparing to add Malibu production at a second location.

2 - Best Sellers List

The best-selling cars in America are midsize cars, and they sell more than 400,000 copies a year.

To hold the title of best-selling car in America gives a manufacturer invaluable bragging rights. What better testament to a product than that buyers voted with their hard-earned cash?

The Toyota Camry has held that title for five consecutive years -- nine times in the past decade, swapping off with the Honda Accord. The last American car to hold the title was the Ford Taurus, from 1992 to 1997 -- the old Taurus, not the newly badged Five Hundred.

Multiply that out year after year, and you’re talking millions of buyers. In fact, Ford, when it announced the resurrection of the Taurus name, provided an interesting statistic: in 21 years, Taurus represented 7 million sales, of which about 3.5 million remain on the roads today.

Malibu has not been on the top 10 list, but clearly, Chevy intends to break into that top 10 list with the Malibu. Chevy’s Peper hinted: “We’ve done a great job with Impala. It’s been a strong midsize car; we think the Malibu is going to be world class.”

Top 10 Best-Selling Vehicles of 2006
Ford F-Series             796,039
Chevrolet Silverado   636,069
Toyota Camry            448,445
Dodge Ram                364,177
Honda Accord            354,441
Toyota Corolla           318,123
Honda Civic               316,638
Chevrolet Impala      289,868
Nissan Altima           232,457
Chevrolet Cobalt      211,449
Source: Automotive News, Edmunds.com

3 – Make It in Midsize; Make it Anywhere

The midsize car market is kind of like the song “New York, New York.” If you can make it there, you can make it anywhere.

Because of the size and importance of the midsize car market, the competition is intense. Everybody plays there, from Suzuki and Kia to Toyota and GM. By Chevy's count, at least 40 nameplates compete in this class.

To rise to the top of the heap, speaks volumes that advertising can’t buy.

The current Malibu didn’t make it there, but the 2008 version is intended to be a contender.

How?

GM started with good bones. The 2008 Malibu is based on GM’s global midsize Epsilon platform that is well proven in other vehicles around the world. It provides a strong body structure for better driving dynamics and is designed for more precise construction. The architecture has been stretched; the new Malibu is more than three inches longer than the current one with six inches more of wheelbase.

GM allowed some of us journalists to test-drive the new Malibu at its proving grounds in Milford, Mich., last week. In fact, they provided the best-selling Toyota Camry to test side-by-side with the Malibu. We’re sworn to secrecy on our driving impressions until Nov. 2 when the car will be in showrooms. Suffice it to say, Chevy may finally have a contender.

But GM recognized good bones aren’t enough. After all, the current Malibu had good bones for its time. The big difference is in the looks. In a class of plain Janes, the current Malibu has been characterized as plain vanilla, at best, and homely, at worst. GM execs rightly decided why not make the Malibu attractive? Duh!

Most noticeable is its new dual-port grille design, which will be the new face of Chevrolet around the world. Another plus is the fact that the car – and GM’s consumer research verifies this – looks more expensive than it is. 

The Malibu’s beauty is beyond skin deep, however. GM, once an interior design laggard, takes a giant step forward with the Malibu. The interior looks refined and is available with two-tone trim and gauges with blue backlighting. Like the exterior, the interior makes the Malibu look like a more expensive car than it is.

"The vehicle makes a statement in design," Peper told AutoObserver, "and a statement about the future design for Chevrolet exteriors and interiors."

4 – Cutting a Wide Swathe

A car doesn’t get to be best-selling car in America by covering a narrow niche. A midsize car like the Malibu has to cut a wide swathe of demographics, from the young family to the middle-age driver who carries clients but wants some spirit to the retired schoolteacher to everyone in between.

To that end, Chevy is offering the Malibu a variety of ways, as is required in the segment.

The Malibu comes in three equipment levels: the LS, LT and LTZ. All come with standard side curtain airbags and front side airbags, OnStar and XM Satellite radio. It comes with either a 2.4-liter four-cylinder engine or a 3.6-liter V6. A six-speed automatic is standard with the V6; a four-speed automatic comes with the four-cylinder, though a six-speed automatic will be offered with the four-cylinder LTZ – a segment first combo – later in the model year.

In addition, Chevy comes out of the gates with a hybrid version of the Malibu.

5 – The Value Story

In the end, it is the bottom line that counts. The value story. A midsize car has to fit the budget of a young family and the schoolteacher collecting a pension.

Top 10 Least Expensive Midsize Sedans of 2007
Kia Optima  $16,355
Hyundai Sonata $17,195
Chevrolet Malibu $17,215
Pontiac G6  $17,245
Ford Fusion  $17,430
Nissan Altima  $17,950
Chrysler Sebring $18,320
Toyota Camry  $18,470
Honda Accord  $18,625
Mercury Milan $18,905
Source: Edmunds.com

But Chevy’s goal with the 2008 Malibu is to not have the car look cheap. “It has the looks of a $40,000 vehicle for under $20,000,” Chevy’s Peper has said repeatedly since he unveiled the car in January at the Detroit auto show.

Exact pricing hasn’t been announced; it is expected closer to the November launch of the car.

“We’re going to deliver,” insists Peper.

In fact, Chevy must over deliver -- and under promise.

Posted by Michelle Krebs at 5:11 AM under Analysis , Commentary , Featured , GM | Comments (11) | digg this | Seed Newsvine