Thursday, November 24, 2005

What's on the way - GM

It's really no secret that GM, the industry's current favorite whipping boy, Ford, and to a much lesser extent Chrysler are at all time lows for market share. They have nasty labor problems ranging from awful healthcare and pension liabilities that account for as much as $1500 per car.

GM has announced the closing or scaling down of many plants. Delphi's recent bankruptcy has GM scared to death of a UAW strike or other disruption of their supply of parts. Ford has been forced to bring back in large chunks of Visteon and I'm sure that they are worried about their supply chain as well.

At this stage, however, no amount of cuts is going to repair this situation. The only thing that will be able to best buy the time needed to re-negotiate contracts and deal with the other structural problems is great product with exceptional quality and an outstanding buying experience.

It has started to become clear from recent JD Power and other quality surveys that the quality divide has all but disappeared. Since we don't know much about future plans to reform or nudge the dealer body toward better buying experiences we can only hope that they are working on that end. That leaves us with great product.

GM, in an effort to nudge the public perception in the positive direction, have given some hints of products that we'll be seeing in the next year or so. Some time ago, GM even brought much of the first-tier press (of which, unfortunately, I am not) together to see the upcoming product.

Here are some of the things we know are on the way:

Cadillac Escalade interiorGMT 900 - These are the next generation of big SUVs and trucks that GM builds. This includes the Chevrolet Silverado, Tahoe, Suburban, and Avalanche; GMC Sierra, Yukon, Yukon XL, and Denali; and the Cadillac Escalade, Escalade ESV, and the Escalade EXT. They have shown publicly the Tahoe, Yukon, Denali, and the Escalade. Of note are much higher levels of fit and finish, incredibly high quality interiors, a completely unique interior for the Cadillac version (finally) as well as promises of class leading power _and_ fuel economy. Also, these should be some of the first vehicles to feature GM's new full-hybrid technology, improving economy even further (and possibly insulating them even more from fuel price increases). These look like they could - if fuel prices stay at current levels - really improve GM's bottom line and buy them time to invest in other products.

Expect the Tahoe, Yukon and Denali, as well as the Escalade in the first quarter of 2006 as 2007 models. Suburban and Avalanche, Yukon XL, and Escalade EXT and ESV should appear before summer 2006. The Silverado and Sierra should be out in the fall as 2008 models.

However much GM counts on them, they are not putting all their eggs in the full-sized truck basket. They, admittedly, are a late convert to the cross-over market with practically no great entries to speak of (Saturn VUE, Chevy Equinox, Pontiac Torrent all on the Theta chassis; Buick Rendezvous and the late Pontiac Aztek on the mini-van U-platform; and the Pontiac Vibe on the Toyota Corolla/Matrix platform). They are promising to roll out truly competitive entries into this new, hot end of the market.

Buick Centieme conceptLambda - After years of work, the chassis that will bring with it the replacement for the Buick Rendezvous is ready to go in 2006. This time, they are expected to be much more than simply redone mini-vans with faux truck styling. Expected in mid-to-late 2006 are the Buick Enclave - expected to share lots of styling details with the Centieme concept from 2003 (shown); the GMC Acadia and the Saturn Outlook. All are expected to feature 3-row seating, modern and efficient powertrains including the possible use of the 6-speed automatic GM has been co-developing with Ford. Also expect these to have class-leading interiors and styling much better than what has been expected from GM in days gone by. Expect the Outlook and Acadia in 4Q 2006 as 2007 models and the Enclave in early 2007 as a 2008.

Now, we've covered the SUV side of the spectrum where it appears that GM is finally shoring up dated product and finally arriving at the party in markets they didn't really compete in before. Now, what else do they have up their sleeves?

Saturn AuraGM has a world class mid-sized sedan chassis in the form of the Epsilon. Currently its best form is taken by the Saab 9-3 sports sedan and SportCombi (a wagon by any other name). On the mainstream side - we got the Chevy Malibu. What would you say to a 250hp, 6-speed automatic, painfully stylish sedan straight out of the Opel styling studio? Now, picture a no-haggle price and friendly dealer body...yep...this baby's coming to us from our friends at...are you sitting down?...Saturn.

Hitting the market in mid-2006, the Saturn Aura will bring all the great promise of the Epsilon chassis with sporty handling, great styling (inside and out), as well as GM's wonderful 3.6l DOHC V-6 that currently is only found in Cadillacs and high-end Buicks. This one, in 4-cylinder as well as v-6 flavors could finally be the Toyota Camry and Honda Accord competitors that the Big-3 have, to date, been unwilling to build.

Well, that is all fine and good. But how much buzz can you really generate in the market with cross-over SUV's and matter how good they might be? It would be nice if GM had products that might get people to sit up and take notice.

What they really need is a stylish, inexpensive to build, rear-drive, sports car. How about 2? GM didn't have any chassis that would work for this class of car before Kappa. This chassis was developed purely at the request of Bob Lutz, GM's global product czar. He wanted an inexpensive, splashy sports car to get people to see GM's actual engineering ability.

Saturn Sky
In September of this year, Pontiac brought out the Solstice roadster (still ramping up to full production). In 1Q of 2006, Saturn will bring us the Sky roadster. Significant is that these cars have completely unique bodywork and interiors. The Solstice is built to hit a $20k starting price. Sky is built to be more up-market and, as such, has a much richer interior and more modern styling. Expect in fall of 2006 for Solstice and Sky to also get turbo power with as much as 240hp. These promise to get people and the media's attention.

2006 looks to be an exciting year for GM. These are only the new products. Rumors abound of GM upgrading interiors, etc on other models during 2006 as well.

Obviously, GM is racing with the clock to get their house in order before all their liabilities catch up. I, for one, am hoping they win that race.

Next up, Ford's 2006 plans...

Update - during my research for my Ford post, I found a few other significant releases from GM for 2006. Cadillac will be bringing us a brand new CTS with more elegant styling inside and out in the fall. SRX will get a new, upgraded interior, and the XLR-v supercharged roadster will also debut; Saturn will be launching a mild-hybrid (10% fuel economy improvement) version of the VUE in a new sub-brand called 'Green Line' (get it? Red Line is performance, Green Line is eco-friendly); and Pontiac should finally be bringing to market the G6 convertible, with retractible hard-top. All-in-all, still an exciting year for GM.

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