Chevy Malibu: Same Price, More Profit
November 01, 2007

General Motors Vice Chairman Bob Lutz says though the new Chevrolet Malibu, going on sale this month, has about the same list price as the old Malibu, GM could make more  – significantly more  – on the midsize sedan.

Lutz told the Detroit News at the Chevy Malibu launch in Memphis this week that GM could make $5,000 more on each new sedan sold compared with the older model. He said the Malibu will command a higher price premium than the previous Malibu, which was dragged down by deep discounts and heavy sales to daily rental fleets. Edmunds.com data shows the 2007 Malibu sells for about $2,800 below the Manufacturers Suggested Retail Price.

"My bet is that we're going from a car people have to be bribed to take, to a car people will actually pay for," Lutz told the newspaper.

That means even if GM sells no more 2008 Malibus than it sold in 2007, it’ll make more money.

The vastly redesigned 2008 Malibu, already garnering accolades from the media and generating tremendous Internet buzz, starts at $19,995; the hybrid starts at $22,790. A typically equipped 2007 model lists for $20,637 and sold for heavily discounted $17,864, according to Edmunds.com.

Jesse Toprak, Edmunds.com’s executive director of industry analysis, said GM will be successful with the Malibu if it eliminates incentives, cuts daily rental fleets by half or more (about 40% of all Malibus have been sold to fleets) and sells the more expensive versions of the Malibu.

"If GM is able to sell without a lot of incentives, that’s a good measure of success," Toprak said.

Posted by Michelle Krebs at 7:09 AM under GM , Personalities | Comments (1) | digg this | Seed Newsvine