via EJD1984 & majicbz07 @GMI
GM gambles on quick car redesigns in shifting market
June 22, 2015
-- General Motors wants to raise its game in the car space so badly that it's thrown the kitchen sink into the next-generation Chevrolet Malibu sedan, from automatic braking to a hybrid version that will return the segment's best fuel economy.
GM executives are confident that they'll reap more than $1,000 in extra per-vehicle profit from the 2016 Malibu when it goes on sale this fall, simply by offering head-turning features and options rather than fire-sale prices. They expect the same from the redesigned Cruze, scheduled for an unveiling here this week.
Changing the equation
For years, the midsize sedan segment has been the largest in the U.S. and the de facto place where mainstream brands showcase new powertrains, safety features and design direction. The intense competition forces a compressed product cadence, typically five years or fewer between redesigns. The arrival of credible Detroit 3 entries, including the current Ford Fusion and Chrysler 200, has raised the stakes.
By rule of thumb, the extra cost of building a crossover body vs. a car on the same platform is roughly $1,500 per vehicle, says John Krafcik, president of TrueCar and former CEO of Hyundai Motor America. The average transaction price of a small crossover in 2014 was nearly $5,000 more than that of its small-car platform mates, he says.
Battle for share
GM's aging car lineup has been particularly hard hit. Its retail car sales fell 19 percent through May. Pending redesigns of several key nameplates should help -- the next generations of the Malibu, Cruze, Volt, Camaro and Spark are due out in coming months. But it's a tough time to count on higher car margins, Krafcik says.
Even so, Krafcik adds another factor that could pinch car sales even beyond 2020: mobility services such as Uber. Should those eventually replace large numbers of personally owned vehicles, as some observers expect, Krafcik predicts that "three-box sedans" are the most likely to go, rather than crossovers, pickups and other, more versatile vehicles.
"The crossover is the winning architecture for the modern car buyer," he says. "The industry needs to retool to produce more of them."
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"From the article, now we know approximately when to expect the next gen Equinox and Traverse
Cruze 1Q 2016
Malibu 4Q 2015
Equinox 1Q 2017*
Traverse 1Q 2017*