GM running out of time to kick Cruze sales into high gear

[NINETY EIGHT REGENCY]

GM running out of time to kick Cruze sales into high gear

BY CHRISSIE THOMPSON

FREE PRESS BUSINESS WRITER

Three months after launching, the Chevrolet Cruze is on the shopping lists of fewer than 5% of compact-car consumers, General Motors says.

With the arrival of a redesigned Ford Focus next month and a new Honda Civic in the spring, GM has a short window to ramp up the Cruze's image.

Chevy needs consumers to associate the Cruze -- which replaced the Cobalt -- with value-priced safety and creature comforts before ads for Focuses and Civics again crowd the airwaves.

"I would say that's pretty important," Chevrolet marketing chief Chris Perry told the Free Press.

Chevy needs a small-car winner in case gas prices increase and as a way to win younger buyers. But it's a competitive field. GM sold about 8,000 Cruzes in November, placing it fifth among compact cars. The No. 1 Civic and No. 2 Toyota Corolla each sold more than 16,000 cars.

GM has its Lordstown, Ohio, plant running three shifts to build the Cruze, which suggests a sales volume of more than 20,000 a month.

Mark Hancock, 56, of Troy previously owned a Cobalt, even though the American-car loyalist didn't find it comparable to the Civic or Corolla.

"This was definitely in that league," he said of his new Cruze. "We liked the Cobalt, but this Cruze is unbelievable."

GM eyes young buyers as it tries to gain an edge with Chevrolet Cruze

Nick Tomasetti wanted to replace his 2003 Ford Mustang. So he went to AutoTrader.com and typed in a price range. That led him to the Chevrolet Cruze compact.

"Anything I wanted, I wanted it fully loaded," said Tomasetti, a 25-year-old Nordstrom sales manager from suburban Chicago. That ruled out other models he liked, such as the Audi A4 sedan or the Nissan Murano crossover. "Those cars fully loaded were like ($15,000) to $20,000 more than the Cruze was."

Tomasetti bought his black Cruze on Oct. 31, complete with every option except fog lights, which he is adding aftermarket.

His story fits one of General Motors' ideals for the car -- a young buyer who is looking for a small car that's heavy on features. But how many searches will end with a Cruze, instead of a Hyundai Elantra, whose redesign went on sale last month, or next year's Ford Focus?

Chevy said it hopes the Cruze's head-start gives it an edge in its attempt to introduce quality and profitability into its small-car history, troubled by lackluster entries such as the Corvair, Vega and even the recently replaced Cobalt.

But that could be a challenge, especially since the Cruze design is already 2 years old, said Mike Jackson, senior manager of North American production forecasts at IHS Automotive. The Cruze is a global model that launched last year in Asia and Europe. The Focus and Elantra launches will feel fresher, he said.

"As a result of having been in production two years, it will age more quickly," Jackson said of the Cruze. "The relevance in the market is one of the things consumers are willing to pay premium for."

Honda also will introduce a new Civic next year, while a new Toyota Corolla isn't expected until late 2012.

Push to consumers

To help cement the Cruze in consumers' minds before new competitors arrive, Chevy plans to launch a campaign next year that loans Cruzes to bloggers. The brand is also continuing its Main Street in Motion traveling test drive fair and its "Get used to more" ad campaign, said Chevy's new marketing boss, Chris Perry.

The four-door Cruze starts at $16,995, including shipping, and costs $27,105 fully loaded.

The base model gets 36 m.p.g. on the highway with a manual transmission and has standard features such as power locks and air conditioning, which are options on the Civic and Corolla. Those options also make the Cruze's base price several hundred dollars more than those of the Civic and Corolla.

Selling quickly, so far

IHS Automotive estimates the Lordstown, Ohio, factory that builds the Cruze can make up to 255,000 cars annually on three shifts. To compare, GM sold 213,000 Cobalts in 2005, the car's best year.

"We don't want to miss the opportunity," Perry said.

GM spent much of this year trying to find new ways to build cars for dealers clamoring for inventory to meet improving demand.

Analyst Jackson said GM can produce 255,000 Cruzes next year without selling all of them, saving some for even better sales years -- as long as the company takes care not to push product on dealers.

So far, Cruzes are selling far more quickly than analysts' 60-day benchmark.

GM started November with 9,000 Cruzes and had sold about 8,000 by the end of the month, Jim Bunnell, who manages GM's dealer network and sales support, said last week on a conference call with reporters and analysts. That's on target with GM's launch plan, Bunnell said.

Perry said, "I think we have an appropriate level of confidence in this vehicle."

LINK:

http://www.freep.com/apps/pbcs.dll/article?AID=/20101210/BUSINESS01/12100375/1210/business01/GM-running-out-of-time-to-kick-Cruze-sales-into-high-gear&template=fullarticle

[SoCalCTS]

Why did they wait so long to bring the Cruze to the USA? The Cruze was available elsewhere long ago. Also, they need to be showing off the technology package. LCD in the dash, bluetooth, stop and pause radio, etc. This is what they need to compete with Ford.

[vonVeezelsnider]

Yeah, I'm sick of hearing about ten airbags when there are other aspects of the car that drive consumer interest.

[regfootball]

WHERE ARE THE ADS

WHERE ARE THE INCENTIVES

AND, THIS GOES TO SHOW THAT THE PRICES WERE TOO HIGH.

One positive sign i have seen is an early lease offer. It's not OMG awesome, but its a start.

Another problem. Limited stock.

Basically Chevy marketing botched this. GM still cannot pull off a product launch.

Chevy needs to STOP IT with the nonsensical and random equipment and trim levels. SIMPLIFY. LS, LT1, LT2, LTZ all still fine, but stop it with things like no CRUISE on the CRUZE.

do you really expect people to catch on instantly to a new car that they have not advertised nor have plenty in stock?

Chevy is scared because the Elantra and Focus are out soon.

Edited December 10, 2010 by regfootball

[daves87rs]

Why did they wait so long to bring the Cruze to the USA? The Cruze was available elsewhere long ago. Also, they need to be showing off the technology package. LCD in the dash, bluetooth, stop and pause radio, etc. This is what they need to compete with Ford.

Agreed. I liked it when I drove it...

Some tweaks would help for sure.

Reg, ads would help, but a real good lease rate would get butts in cars, and spead the word much faster....

[cavalier36]

they would sell even more if they offered wagon and coupe models. I guess GM has given up on two door models pretty much. It currently only builds three coupes, the Camaro, Corvette and Cadillac CTS. without a coupe model the Cruze will not be on the shopping lists of many people in thier teens and early 20's.

[SoCalCTS]

they would sell even more if they offered wagon and coupe models. I guess GM has given up on two door models pretty much. It currently only builds three coupes, the Camaro, Corvette and Cadillac CTS. without a coupe model the Cruze will not be on the shopping lists of many people in thier teens and early 20's.

I agree. Coupes need to come back. A low priced coupe generally looks sexy compared to the same model sedan or five door.

[regfootball]

Agreed. I liked it when I drove it...

Some tweaks would help for sure.

Reg, ads would help, but a real good lease rate would get butts in cars, and spead the word much faster....

people shopping commodity cars want cheap low monthly price.

you are dead on.

the hyundai man called me back today, the 2011's are in for the Elantra. I'm hoping to drive one soon. I have no problems getting an Elantra over a Cruze if there is a discernible difference in monthly cost.

cruze needs to be positioned to go against the corollas, civics, etc with their giveaway leases.

they would sell even more if they offered wagon and coupe models. I guess GM has given up on two door models pretty much. It currently only builds three coupes, the Camaro, Corvette and Cadillac CTS. without a coupe model the Cruze will not be on the shopping lists of many people in thier teens and early 20's.

coupes, hatches, wagons.

I think a 5 door cruze may sell in pockets. the coupe would be a real image builder. A wagon would be nice if they don't have the hatch.

The argument is made for vehicles like the HHR and Granite over the wagon.

Personally, I wish Buick would round out their line with the 3 door, 5 door, and wagon Astras, even in niche volume.

[RjION]

It's not on my list as is, no matter what ad they come up with.

[ShadowDog]

Chevy said it hopes the Cruze's head-start gives it an edge in its attempt to introduce quality and profitability into its small-car history, troubled by lackluster entries such as the Corvair, Vega and even the recently replaced Cobalt.

Seriously? Putting a car of today and yesterday next to cars that most small car buyers have never even heard of? Did this guy have a dinosaur as a pet by any chance?

Marketing! I mean, really. They're trying. I received an interesting sort of a postcard spread about the Cruze in the mail the other day. It was interesting enough to go through and managed to keep coming into my field of vision when on my desk. I read through it entirely and was impressed with the imagery and the background info, but not the content. There wasn't much talk to highlight its features or its technology. In fact, the key point was all about its fuel economy. I know for a fact that too much content is deadly, but c'mon people! Give me two or three great features in summary over the same ol', same ol'.

[regfootball]

advertising to the general public these days is tough. media is so fragmented. a long time ago you had tv, 4 networks, or 3, and mail and newspaper and maybe radio.

nowadays if you want to pitch a product to a large audience, you can't just run a few tv ads and expect to get the message out. Between a proliferated media and a web of confusion in terms of number of choices, there is no easy path to a quick launch. No matter which means you take nowadays to promote your product, you are going to miss so many buyers.

however, i have not seen much evidence that the means chevy is taking to market the cruze is either coordinated or clever. that plus pathetic inventory levels of a critical new product does not equal 'big market splash'.

That is probably ok with chevy's brass, they were fine being 2-3 years late with the cruze to begin with and probably figure they still need another year or two to figure out how to get the auto tranny to not be such a lazy shifter. By 2018 when the model run is over, and the competition has run 2-3 new model cycles though against it, maybe they will have the marketing campaign figured out.

I saw one of those chevy runs deep ads on a magazine the other day. Simply pathetic.

Edited December 18, 2010 by regfootball

[vonVeezelsnider]

GM seems to be sending current and past Cavalier and Cobalt owners direct mailouts on the Cruze... We got a brochure and a letter in the mail a while back.

[Nick]

Wait, this car is on sale? Honestly, while I have seen the ads, I have not seen one single Cruze on the road.

[vonVeezelsnider]

Wait, this car is on sale? Honestly, while I have seen the ads, I have not seen one single Cruze on the road.

They're starting to creep up all over the place here... then again Canada is a big market for compacts, our best selling car is the Civic.

I've seen many more Cruzes on the road than Regals (only two since they went on sale this summer)

Edited December 19, 2010 by vonVeezelsnider

[Croc]

Wait, this car is on sale? Honestly, while I have seen the ads, I have not seen one single Cruze on the road.

I've seen a few. They look great!

[ocnblu]

Saw a light blue LT today. Can't wait to see the 2012 Focus.

[Robert Hall]

Wait, this car is on sale? Honestly, while I have seen the ads, I have not seen one single Cruze on the road.

I've only seen 3 on the road, just in the last 2 weeks. 2 silver ones and a black one.

Saw a light blue LT today. Can't wait to see the 2012 Focus.

Haven't seen anything about when the Focus goes on sale...next fall, or will it be an early '12 next spring or summer?

[Satty]

I've seen a couple, but they're nothing special, we have known what it was going to look like for years.

My mom keeps saying she is going to drive one but hasn't yet.

[NeonLX]

Coworker of mine just bought one and I got to spend about 10 minutes with it. I can only offer a few initial comments: Front seating is very comfy, maybe the best of any small car I've ever been in. Rear seating is pretty snug however; especially leg room. The engine felt kind of puny at first (twirling an auto tranny); there ain't much displacement to generate old-fashioned torque to get all that mass moving. Once you are moving, however, there ain't any turbo lag so it feels pretty lively. The ride is quiet, but so was the Cobalt's. I'd like to have some more time behind the wheel before coming to any conclusions but so far, I like the Cruze.

[Satty]

Just got a text from my mom, she bought a Cruze this morning.

[Northstar]

I'm interested in seeing if there are incentives on the Cruze in January.

We still have not bought a car since the Maxx was totaled. We've driven plenty of cars, and still aren't sure who's going to be driving what next year when my brother goes to college, so that is complicating things a lot.

We drove the Cruze, 2011 Elantra, Malibu, Sonata, Tucson, Equinox, Edge, Vue (used), Regal, LaCrosse, and probably others that I am forgetting.

The Cruze is way overpriced and it really needs about $1500 in incentives, IMO. The Elantra is very comparable but offers so much more for the money. The Cruze is about $3500 more when you start putting lots of options on each. We drove an Elantra with everything on it except NAV for $20,800. A Cruze is about $24,200 for the same features, and the Elantra still offers more (heated rear seats, to name one thing) and it gets better gas mileage as well (29/40).

If the prices were the same I think the Cruze is sightly better in terms of ride/handling and the engine is quieter. If it wasn't for my parents' $3500 in GM card credits then there's no way the Cruze would even still be in consideration. Also, the Regal is a much better vehicle and currently has $1500 incentives. So while it's about $3000 or so more expensive, that gap closes to about $1500 when the incentive is applied. And it is definitely at least $1500 better. The Sonata is also much better and bigger, and has a similar price (but no GM credits in my parents' case).

[frogger]

No Cruze or Regal sightings yet aside from the ones I drove at the GM test drive event in the summer.

[regfootball]

I saw a couple cruze out and about today. Northstar, that 011 elantra is an impressive drive, isn't it? With that gm card and incentives, that regal is mighty tempting. Over time the regals resale will hold up quite well and may be cheaper long term than the cruze.

Elantra doesn't have 'the lag' and it's got actual back seat space. I can't wait to test a manual cruze myself.

[Croc]

Disagree Northie...Cruze isn't overpriced at all--what IS jarring is that it comes with way more standard/available than the Malibu even offers. The 2012 Malibu can't come soon enough since I find it strange and ridiculous that the Malibu doesn't even offer a proper nav, yet the Cruze does? Cruze is niiiiiiice...lots of features. But you can't decontent it to make it cheaper...

[Satty]

Mom seems happy with hers. Don't know what she paid, but she seems to like the car.