Cruze’s bright future
The upcoming diesel-fuel Chevy Cruze should mean another success story for the Lordstown General Motors complex and the Mahoning Valley, predicts the chief economist for the National Automobile Dealers Association.
”If consumers like the characteristics of the diesel, if it runs smoothly and reasonably quietly, it should be extremely popular,” said NADA chief economist Paul Taylor.
Taylor also pointed out that competition among diesel cars in the U.S. is very limited, creating what could be a niche market for the new small car.
Taylor was in attendance last week at the industry and media preview of the North American International Auto Show in downtown Detroit. The annual event which showcases more than 500 vehicles from about 50 automakers opened to the public this week at downtown Detroit’s Cobo Hall. The show runs through Jan. 27.
Taylor was speaking about the planned launch of Chevrolet’s first diesel car model since the 1980s. The new diesel Cruze is set to begin production in Lordstown in April and hit showrooms about a month after that, GM officials have said.
While statistics have shown increases in the small car segment, Taylor said the Cruze has been ”one of the stand-out successes” among the new small car offerings by each of Detroit’s big 3 automakers.
Statistics showed a 2.6 percent sales increase for the Chevy Cruze small car from 2011 to 2012. Taylor estimated, however, the percentage increase was skewed downward by unusually high sales in 2011 due to limited availability of competition from Japanese carmakers affected by the 2011 Japanese Tsunami.
That helped drive 231,732 buyers to the Cruze in 2011. Despite that, the Cruze still managed to pull out increased sales of 237,758 in 2012.
”Given those odd market conditions, it shows it not only had a strong start, it has staying power,” Taylor said of the Chevy Cruze. ”That’s a great success story. It’s a good one to be producing.”
Analysts attending the Detroit auto show last week also were pointing out that the small car market is on the upswing, another plus for a plant producing a car like the Cruze.
Statistics show small car sales grew 13.3 percent in 2011. They also show that in 2012, 62 percent of all new vehicles sold were small cars. That is compared to just 48 percent in 2002.
All three the Detroit’s big 3 automakers have produced successful new small cars, which Taylor said is a good sign for domestic manufacturing.
”These new small car offerings are all very competitive products, and that is a good sign for the North American-based manufacturers,” Taylor said.
Another factor discussed by several analysts at the Detroit show had to do with density, or the number of cars per U.S. household, which also is on the upswing.
”We have more vehicles per household that we did many years ago,” Itay Michaeli, vice president of City Investment Research and Analysis said last week at the Society for Automotive Analysts dinner in Detroit. That density can be a detriment to new car sales, Michaeli pointed out.
”The number of miles driven per vehicle per year is going down,” he said.
Still it can bode well for the small car market, NADA’s Taylor noted.
”With small cars some analysts feel Americans are looking for a small car option even if they don’t drive it to work when gas prices are relatively modest,” Taylor explained. ”But they still want the option and that may be in the form of a new small car. They want an economic option available to them in the event of a dramatic escalation in gasoline prices.”
Taylor added that the diesel option also should make the Cruze very popular among these types of buyers. While diesel fuel is traditionally higher priced than gasoline, it translates into much better mpg, especially in highway miles.