The Suzuki-built Chevrolet Cruze, General Motors#; first Japanese-built vehicle since a 1920s Buick, is proving a sales flop, according to Bloomberg News.
Bloomberg said that even dealerships in busy Japanese locations have only promoted the sporty compact hatchback for short periods since sales started last November.
“We planned to sell five or six a month but so far have only sold two or three a month,” Fumio Sano, manager of a Tokyo dealership, told Bloomberg News. “There was initially a lot of pressure from head office to push the car. Now they don’t seem so concerned as to which model we sell,” he added.
Bloomberg said that Japanese dealers would have liked more advertising to keep the new model in the minds of consumers longer, rather than the single television commercial and exposure in other media.
“It’s no mistake that the more commercials there are, the more eyes will notice them,” Kazuto Taki, manager of Suzuki Arena’s Nerima outlet in northwestern Tokyo, told the news agency.
“It does impact the number of units sold,” he told Bloomberg, which added that Taki needs to sell five or six Cruzes a month to reach his target of 10 to 12 compact cars. Until last week, he had sold only around a dozen Cruzes since November.
Bloomberg said the Cruze is missing its sales targets because a recession is prompting Japanese buyers towards models that are 20 percent cheaper, including the new Nissan March (Micra) launched yesterday.
Bloomberg also said the decision by GM and Suzuki to market separate versions of the Cruze has hurt sales.
Suzuki sales of the 1.3-litre model are starting to fall short of the 15,000 target for the first year with only 1,027 Cruzes sold in January, Bloomberg said, while GM is barely shifting one car a day of the 1.5-litre version, well below of its full-year aim of 5,000 sales.
“I’m not pleased with where we are now” [with the alliances to Japanese partners], General Motors’ Asia Pacific operations head Rudolph Schlais told Bloomberg last week.
Bloomberg added that GM#;s launch timing for the Cruze was poor. Japan is in its third recession in a decade and rivals are launching new compacts of their own such as Honda#;s Fit which already outsells the Cruze 13 to one. The tiny Honda and and Nissan’s new March both cost about 20 percent less than the Cruze’s 1.3 million yen ($US9,720), the news agency added.
“The small car market is so crowded,” Koji Endo, a vehicle industry analyst at Credit Suisse First Boston Japan, told Bloomberg. “There’s just so many competitors out there.”
The news agency cited some investors as saying General Motors would do better to let its affiliates operate independently rather than developing joint products that the market doesn’t want.
“Suzuki may be better off focusing on expanding its minicar business in the rest of Asia, rather than trying to compete against Toyota and Honda in the domestic small car market,” Toru Katsu, a stock portfolio manager at AIG Global Investment Management Corp, told Bloomberg.
He no longer holds Suzuki shares, Bloomberg News added.