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Chevy Expects Half of Cruze Buyers to Come from Other Brands

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Chevy Expects Half of Cruze Buyers to Come from Other Brands

Wednesday July 28 2010 | By Colum Wood

Chevy is about ready to launch the all new Cruze compact sedan here in North America and company executives have high hopes for this latest model. During a sit-down Q&A with engineering, marketing and product bosses behind the Cruze, Chuck Russell, Vehicle Line Director for Global Compact Cars said the introduction of the Cruze, “might be he most important launch we’ve ever done.”

The numbers seem to support Russell’s statement. As a brand, Chevy sales make up 70 percent of GM’s total sales in the U.S. and the compact car segment just so happens to be the second largest segment in the U.S., making up 15.2 percent of all vehicles sold. That’s just shy of the 16.1 percent first place spot held by mid-size sedans. This also happens to be a segment where Chevy has come up short, with the Cobalt a failed successor to the Cavalier.

With the Cruze, Chevy believes it has the car to get the job done, having already sold 270,000 units globally. But this is not an entirely global car, with new items being introduced in each market, like the new 1.4-liter turbocharged 4-cylinder that is debuting in the U.S.

North American models will also get Chevy’s patented Z-link rear suspension that maintains the benefits of a fixed torsion beam setup (like low cost, light weight and compact size) while delivering a ride that is closer to a fully-independent setup. GM engineers believe they’ve come up with something truly innovative in this suspension setup, even going so far as to call it a “better moustrap.” Not all markets are getting this more advanced rear suspension system, but North America is because Chevy wanted to build a compact car that would be a winner. “Being as good as [the competition] isn’t going to work,” says Russell.

In general Chevy said it concentrated on five major areas in developing the Cruze, ensuring its compact but with an upscale presence, has leading fuel economy, class-leading safety and content, excellent handling and a refined ride, and finally durability and top-notch build quality.

For the doubters, Global Small Car Marketing Director Margaret Brooks, cites the new Equinox, stating the right product will bring success. Brooks lists off impressive numbers for the Equinox, like a four percent market share increase in the compact crossover segment (the nations 3rd largest segment) so far this year, with an average transaction price that is up $3,400. She breaks down where Chevy expects to see Cruze buyers coming from, with a third moving up from smaller or used cars, a third moving over from current GM products and a third moving down from a larger vehicle.

More importantly, however, are two other stats. First, GM expects that up to 50 percent of Cruze buyers will be conquest customers from other brands. Roughly half of all Equinox buyers are coming to Chevy from other brands and Brooks says that the compact crossover is a good bellwether on which to base Cruze data. Second, GM intends to reach new customers with the Cruze, and not in new demographics either. Brooks says that like the Cobalt (and other compact cars for that matter), the key demographics are 20-29 year-olds, as well as empty-nesters, with the 35 to 45 year-old group passing by cars like this for ones with more space, size and utility. Instead, Chevy believes the Cruze will bring it increased market share in new geographic regions.

While Brooks does admit that the Cruze name will mean added marketing for Chevy, competing against legendary sales icons and household names like the Civic and Corolla, she insists a new name was needed for what is essentially the first global Chevy platform.

Along with an expected onslaught of traditional marketing, Russell says Chevy will look to more grassroots methods of communicating the different aspects of the Cruze to customers, knowing that in such a competitive segment they’ll have to bring the Cruze to buyers – likely with competitors in tow to give a car-to-car comparison.

For AutoGuide’s take on the all-new 2011 Chevy Cruze, you’ll have to wait for our First Drive, coming July 31st.

LINK:

http://www.autoguide.com/auto-news/2010/07/chevy-expects-half-of-cruze-buyers-to-come-from-other-brands.html

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