GM's New Corvette Begins Brand Update - Wall Street Journal

By JEFF BENNETT And JOSEPH B. WHITE DETROIT—General Motors Co. on Sunday took the wraps off a new, seventh-generation Chevrolet Corvette sports car that it hopes will become the poster child for a 2013 product blitz designed to buff its top-selling Chevrolet line. Chief Executive Dan Akerson and North America chief Mark Reuss have presided over GM's return to record profitability in its home market but haven't been able to halt a market share slide. The auto maker finished 2012 with just 17.9% of U.S. car and light truck sales, the lowest level since the 1930s, amid a paucity of new models. Archrival Ford Motor Co. leads GM in per vehicle profit in North America. GM's Chevrolet brand last year finished behind the Ford brand in overall sales and in the lucrative large pickup market. Large pickups, such as the Chevrolet Silverado and Ford F-150, generate the bulk of GM and Ford's profits globally. Every sale lost is an estimated $8,000 or greater ding in profit. With the U.S. Treasury preparing to sell its remaining GM shares during the coming year, Mr. Akerson is under pressure to rev up sales and profits in the U.S., particularly since Mr. Akerson says GM's European operations aren't likely to generate profits until the middle of this decade. "We squandered the market position we had in the 1960s, 1970s and 1980s," Mr. Akerson said in an interview a week ago. "Now we have to get it back." Putting Chevrolet back on car shopping lists in America and overseas is the linchpin of GM's strategy. Chevrolet accounts for 70% of the auto maker's vehicle sales in the U.S. Mr. Akerson and Mr. Reuss say Chevy was hamstrung in 2012 because it had the oldest products among pickup trucks and other high-volume sellers such as family sedans due to a lack of investment during the lean years during and after its 2009 bankruptcy. This year, they say, Chevy will have 13 new or redesigned models in the U.S. and introduce another 12 overseas. "We have all of these cars and trucks happening in the next year, year and a half," Mr. Reuss said recently, asking investors to judge its performance when the new vehicles are available. "Give us 18 months and you're going to see the whole portfolio turned. It will be the biggest portfolio turn, I think, in automotive history." Posters on the walls of Chevy's offices in downtown Detroit declare the goal to be No. 1 in sales this year—beating the Ford brand. The 2014 Corvette, expected to start at about $50,000 and sell in low volumes, won't solve GM's market share problem. That task will fall mainly to the redesigned Chevrolet Silverado pickup, which is due to launch in the second quarter of the year, and to an updated Impala sedan. However, GM executives plan to use the 450-horsepower sports car more aggressively than ever to call attention to the rest of the Chevy lineup. GM is resurrecting the "Stingray" name for the new Corvette, reviving a name that hasn't been used since the 1970s, when the 50-something baby boomers who are the target buyers for the new Corvette were in their impressionable teens. "We want to reinforce the fact that it is a halo product and tie it closely to the Chevrolet brand," says Chevy vice president for marketing Chris Perry. Mr. Perry won't disclose details of how the Corvette will appear in the brand's advertising, but says the intent is to change course after years of treating the Corvette as a brand unto itself. "Every Chevy dealer should try and sell at least one Corvette or they are missing an opportunity," says Steve Hurley owner of Stingray Chevrolet in Plant City, Fla. "It is a piece of history." The 2014 Corvette would appeal to consumers who like traditional, gasoline fueled definitions of performance: horsepower, torque and a sub-4 second 0 to 60 miles an hour sprint. The 'vette is the antithesis of the Chevrolet Volt, a plug-in hybrid that Chevrolet has promoted during the past two years as the emblem of its brand. Mr. Perry says Chevy can use both as symbols of technology prowess. The Corvette uses lightweight exotic materials and fuel-saving technology to wring better than 26 highway miles on a gallon of gasoline from the Corvette's V-8 engine. "They're both about technology, performance and design," Mr. Perry says. Write to Jeff Bennett at jeff.bennett@dowjones.com and Joseph B. White at joseph.white@wsj.com via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE0i-QQRBMNNF0loH0KrOjCgqZ2jQ&url=http://online.wsj.com/article/SB10001424127887324081704578233752103341608.html?mod=googlenews_wsj

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