General Motors’ new global-markets Chevrolet Cruze is set to become a mainstream, fuel-efficient, compact model for North America, the automaker announced last night.
Go deeper with GlobalData
Confirming an investment signalled last Monday, chairman and chief executive officer Rick Wagoner said GM would spend around US$500m to build the Cruze at its Lordstown, Ohio plant. It will replace the current Cobalt (and, eventually, the Pontiac G5 derivative) in North American showrooms.
The Cruze makes its official debut at the Paris motor show in October and will replace the GM Daewoo-built Chevrolet Nubira (which is sold in other markets under a variety of brands and model names) in Europe. Other production locations will include South Korea and Russia.
GM said the Lordstown investment was one of several announced for its US plants in the past five years, totalling around $2bn in Ohio and over $20bn in the entire country.
“One of the key reasons for the success of the Chevrolet Cobalt and Pontiac G5 is the Lordstown workforce and the strong partnerships with the UAW and local and state officials,” Wagoner said. “Based on the quality of work and these strong partnerships, we are pleased to announce our plans to invest another $500m in the Chevy Cruze product programme in the US, including more than $350m in Lordstown.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataEd Peper, GMNA’s Chevrolet head, stressed GM’s commitment to deliver fuel-efficient vehicles that consumers want to buy.
“The Cruze will build on the already successful Chevrolet Cobalt, Cobalt XFE and Cobalt SS, all of which are nearly sold out in dealer showrooms,” Peper said. “Our dealers are asking for many more Cobalts than we can build.”
Sales of the Cobalt, which replaced the long-running Cavalier some years ago, were up 16% year-to-date by the end of July – the model is EPA-rated at 33 miles per US gallon in highway driving while a new XFE version gets 37mpg and is, GM claimed, “selling almost as soon as it’s unloaded from the delivery trucks to dealerships”.
“The Chevrolet Cruze was designed and engineered by our global teams in Europe and Asia Pacific and will be manufactured in those regions in addition to the assembly plant here in Lordstown, Ohio,” Wagoner added. “Our goal… is to lead in fuel economy in this very competitive car segment.”
The Cruze will be launched in Europe and Asia Pacific next year with 1.6- and 1.8-litre petrol engines and a two-litre turbodiesel. GM has said a 2011 version will get a 1.4-litre turbocharged engine in the US.
“The Cruze seems to be indicative of where the next generation of compact vehicles is headed: larger, higher content, and most certainly more expensive than the models they are replacing,” Global Insight auto analyst Aaron Bragman said on Friday.
“It will need to be more expensive than the Cobalt, however, if GM is to make up some of the profits lost through declining truck sales.”
Bragman noted that Ford had a similar strategy for the upcoming 2010 Focus, which is also based on the European-designed model, and will be both larger and more expensive than the outgoing North American Focus.
“This kind of strategy is simply necessary as the US automakers transition away from the high-profit trucks and into the less profitable but increasingly in-demand small cars.
“Buyers seem to be receptive to the idea however, with several recent industry studies claiming that the latest round of small-car buyers are optioning their choices to the maximum, not willing to sacrifice amenities and features simply because they are downsizing their rides. Ford has responded as well, introducing a new top trim level on the Focus to take advantage of these buyers.”
