Thirty-one–year GM veteran and Chevrolet General Manager Kurt Ritter must have a Chevrolet bowtie tattooed on his chest. Dogged, determined and fiercely loyal, he’s seen it all. When he began his career, Chevy was boss, with well over a million cars sold annually. Over the years, in what must be an anathema to a Chevy diehard, Ford accelerated, then passed Chevrolet as the market leader. Along with the rising Asians, GM’s own Saturn division cannibalized Chevy’s bread and butter franchise.
|Chevrolet’s SS concept telegraphs the direction the division is taking to regain its tradition of performance and personality.|
When you do the math, Chevy sales still lag behind Ford’s, but the gap is shrinking. Ford has helped by imploding. Hard hit by its inept initial response in the Firestone debacle, it compounded its problems by struggling with repeated recalls on Focus. For an encore, it failed to score with what should have been an easy layup with the Thunderbird, and is seemingly unable to move forward from a styling perspective without looking in a rear view mirror. Ford Motor Company is undergoing a leadership shuffle, you could say a power struggle, with its ‘British mafia’ pitted against young Billy. And with all those self-inflicted, new product-robbing budget cuts, things may get even worse before they get better.
Meanwhile, GM, virtually exploding under Bob Lutz and Gary Cowger, is remarkably re-energized. This well-synchronized pair are joined so closely at the hip it’s hard to know who’s boss — and it doesn’t matter. Together they’re approving new cars and trucks that make sense and will be competitive, not just good enough.
Ritter’s game plan isn’t rocket science and doesn’t have to be. Chevy spans one of Automotive Industries January 2003 29 the widest ranges in the business. The 92- year old American icon brand still makes abundant sense for everything from the lowly Cavalier to the sophisticated Corvette. Chevy’s “Baseball, hot dogs, apple pie and Chevrolet” values are still well understood and made an indelible impression. But there are holes in the product line and Ritter ‘simply’ has to fix weak sisters and plug those gaps.
|Bringing back vehicles like the Camaro (1967 shown) are a priority for General Manager Kurt Ritter.|
Ritter is quick to point out Ford’s sales lead in cars, especially with Taurus, is based on less profitable fleet sales. “On cars we actually lead them. On strength of Impala, we have a high volume retail-selling mid-sized car. They do not.” Volume, in this case, is relative. Chevrolet sells just over 200,000 Impalas today and it takes no prodding for Ritter to cut to the real problem: “On the car side, quite honestly,” he admits, “the competition is not Ford. It’s Toyota and Honda.”
These rivals sold over 800,000 Camrys and Accords, between them, last year. Chevrolet must reclaim some of that business. There is also the issue of competing with sister division Saturn, especially with the stylish new ION on GM’s Delta platform. “In a big company,” Ritter offers, diplomatically, “you hope that you don’t interact, but in reality, customers have choices and you don’t always know where they’re going. He believes, “we interact very little with Saturn on most of their products.” Nevertheless, it’s food for thought to wonder what might have happened had GM invested in Chevrolet, rather than expending billions to create the new Saturn division. Sadly, much of Saturn’s “new” culture was soon smothered by the unions and most of the rest stayed in Tennessee. But that’s water under the bridge.
Chevy now has its own small car opportunity with the Cavalier replacement, which, according to Ritter, they’ll do right this time. “It’s not just a rebadged Opel,” he insists. “I would call this an Americanization of the (Opel) product, as opposed to just a Federalization of it. We’re not just meeting safety and emissions (regulations). We have invested quite a bit in styling to make it look more like a Chevy — the fact is, that there’s hardly a panel that will be shared. That’s a different approach than the Focus took.” Moving up one segment, the oppressively bland Malibu, its repetitive brake problems aside, has been a base hit, not a home run. Admits Ritter, “The new (2004) Malibu is an important car. I think for the first time we have a vehicle that will compete. For its segment, it has great ride and handling plus expressive styling. We will have a great deal of content and value in it. In the last two clinics,” he reports enthusiastically, “50 percent of the respondents thought it was a luxury European import.’’ Thanks to GM’s global Epsilon platform (see cover story p. 22, Silver Bullet), Ritter believes Malibu will make quantum leaps in ride and handling, comfort and convenience. He predicts the cars will go head to head with Camry and Accord and provide both quality and personality.
His term ‘personality’ is key. It’s something Chevy had in abundance years ago, but seems to have lost. Its Asian rivals, (with the exception of the hot new Mazda6 and Nissan’s Altima and Maxima) churn out wonderful appliances, but they’re relatively devoid of personality. Ritter believes Chevrolet’s comeback will ride on the strength of reinventing some of the dash and verve that was a division trademark back when they sold snappy Bel Air hardtops and convertibles, Nomad sports wagons and big, reardrive Impalas. But he’s also got to overcome some deep-seated market opinions.
Changing Minds About Chevrolet
|Ritter and GM NAO President Gary Cowger introduce some of Chevrolet’s renaissance products. From left is the Equinox, Cheyenne and Malibu. |
“We’re probably not going to get the guy or gal that’s on their ninth Camry,” he admits. “But with the next generation Malibu, we will get a shot, we believe, with a person who’s considering a Camry and an Accord, or who may have been a former Chevrolet owner.”
Three million Chevrolet vehicles annually is Ritter’s goal, but can they do it? “That number is still a big number, and it is a vision,” he admits. “But we have vehicles coming (in segments) where we don’t do very well. We’re selling roughly 40,000 Trackers at retail and we’re going to have a new (Saturn Vue-based crossover) Equinox SUV…which could make that number over 100,000. There’s a big plus there. We’re going to do better in small cars in the future — that’s going to help us.” Still, he concludes, “we must do better in cars while maintaining strength on trucks.” Being number one is a goal for Chevrolet, but Ritter qualifies the statement by adding that it wants to be the largest retailer as opposed to leader in total (sales). He explains that it’s hard to hold dealers responsible for Ford fleet sales to Hertz, noting that in the last numbers he saw, less than half of Taurus’ volume was retail. And while that may keep factories running, it’s not profitable.
|Chevrolet’s image problems do not extend to its truck line, which continues to show year-over-year growth. The Silverado is its bread-and-butter vehicle. |
|Cavalier’s introduction was delayed until it was right. The car is critical to lure young buyers. |
Says Ritter: “We could sell a car that’s larger than an Impala but we think Impala can cover most of that market. Mercury Marquis is more a Buick effort,” he says, omitting mention of rival Ford’s Crown Victoria, the sole mainstay in the cop car and hire fleet game. “But wagons…” he hesitates, “I wouldn’t discount that as an opportunity we are exploring very seriously.”
For Chevrolet, there’s got to be opportunity here. Chrysler’s Pacifica looks to be an out-of-the-box hit before they sell one unit and Dodge has a future hemi-powered sport wagon showcar this year. Where’s Chevy? Perhaps the extended wheelbase, 5-door 2004 Malibu Maxx is the answer.
Plugging the Holes
Ritter is surprisingly candid about Chevy’s lost sports coupe business. “Clearly, the one area where we have to find an answer,” he says, “is the Camaro. Every day (literally, every month) we wake up, Ford’s selling 10 to 12,000 Mustangs. We wake up in the hole because it’s something we don’t have. I would consider that our number one area that we need to find a solution to.”
But Chevy better hurry, Mustang celebrates its 40th birthday in 2004, and spyshots of a retro-styled racy-looking 2005 Mustang convertible appeared as this was written. Surely, Chevrolet needs a Camaro as much as Pontiac needs a GTO? And why wouldn’t the Holden platform work for both brands?
|The SSR is production bound. Ritter says it’s a car customers naturally fall in love with.|
Ritter knows he needs a bridge from those halo vehicles to mainstream high volume offerings. And that bridge is the SS strategy, which will provide uplevel performance in several of Chevy’s mainstream offerings. And the division is well aware that it must create the notion of ‘attainable aspiration. That’s what Chevy has been all about when it has been successful. It wasn’t just “all that people could afford,” it was “what they wanted to afford.”
Ritter thinks that SS models, like a 240 hp sporty Impala, could sell in the range of 10 to 15 percent of a given car’s volume. He notes that to do that there has to be a delicate balance between being exotic enough to be aspirational but at the same time affordable enough that basically everyone can afford them. SS will represent a legitimate increase in performance. It will have a style enhancement of its own that will provide that bridge back from the halos to the mainstream vehicles. That’s something Chevrolet hasn’t had for a long, long time. But the strategy had better work. There won’t be a new Monte Carlo (and it’s still a ‘maybe’) or completely new Impala until 2007!
|A business case for the Bel Air (concept vehicle shown) is still being hammered out. Ritter wants it in the Chevy lineup.|
Ritter agrees. “Yes, I put Bel Air in that area of open air, fun, with a design that’s relatively uncluttered and will wear for a long time. I call them ‘blue blazer’ designs,” he says. “By that I mean you can wear ’em anywhere and you can wear ’em for a long time. That’s what they do. Fun is an indispensable part of a brand’s livelihood, I think. (When) we went to brand positioning, I think we got far too serious, with security-oriented positioning for our brands. People don’t want to be scared, they want to have fun.”
Looking back, Chevy has an amazing heritage. It’s not as though they have to reinvent themselves every day, the trick is having the right products. “The SS strategy is not a new idea.” Ritter admits. “It’s reinventing and contemporizing the past that works so well for us. And bringing that into play on (both) the car and the truck side. There’s no reason not to do it on the truck side.”
Warming to the subject he continues, “The mid-utes of today are like the 4-door sedans of the 1960s. It’s a mature segment that needs some spice.” German import brands with M-Sport or AMG badging are the obvious examples. That strategy allows you to sell a decent car, then offer a sportier version without overly compromising the mainline version. “I’ll take a few dings in brand college,” Ritter says, “to do an SS on a Trailblazer.” Chevrolet management knows that getting a critical mass of products that continue to flow is absolutely necessary to achieve its strategy. And Ritter credits Lutz and Cowger for buying into that vision and understanding the need to hold onto trucks and grow with cars. Ford notwithstanding, Ritter emphatically states that the greatest long-term threat is Toyota. Bottom line, Chevrolet can recapture the leadership slot, but its cars (and trucks) can’t be simply good enough. “That’s right,” Ritter says. “I can tell the world about our increased quality and it’s valid and correct, but if you just bring that to the marketplace, that is not going to win them back. What you need to do, is to provide the two “Ps” they don’t have ¡? performance and personality. And I think the SS strategy can help us there.” Everyone remembers vintage Chevys that people still look at and say, ‘wow!’ Chevy has to be offering future Woodward cruise material ¡? right now. Performance and personality were always part of the brand, especially after 1955 when the smallblock V-8 came out of nowhere and became the darling of hot rodders and racers. If your roots are good and you can go back and contemporize them, you’re on the right path.
One of the immense challenges Toyota and Honda have is that their cars have become somewhat bland, and lacking in personality. They’re great functional vehicles and they’re bulletproof images for quality, but the brands themselves aren’t an overly exciting proposition. It’s definitely where Chevrolet can go if Nissan and Mazda don’t get there first.
Chevrolet has 2,200 single-focused dealers and many more multiple points. Ritter calls this “a high differentiator. We have an uncluttered retail environment to sell through, and that’s a big enabler. You have to have a vision. It’s a struggle, but people work harder when they do, Today’s reality is what yesterday’s vision was. We have laid out our vision, we’ve made progress. There will be bumps in the road. But I honestly believe we’ll get there.”
Our advice? GM can’t ever sell Chevy short with product again and each new entry has to be world class, not Velveeta cheese like old Luminas and the current Malibu. With its comprehensive truck lineup, and plenty of updates and replacements in the works like the Colorado and Equinox, Chevy’s proven that it can regain lost share and momentum. As possible fuel crises loom again, as consumers tire of SUVs and crossovers, as new variants like Chrysler’s Pacifica and PT Cruiser gain prominence, and as Americans turn back to station wagons and comfortable sedans, Chevy’s rebirth hinges not only on being there, but being there with the right stuff.
Chevy: Cool with the Kids
Chevrolet General Manager Kurt Ritter is pleased with a GM research study where kids 18 to 22, were asked, ‘How acceptable is this brand to you?’ “On truck side,” he says, ” Chevrolet was #1. On the car side, we were #3, behind Toyota and Honda, but ahead of Ford and Dodge. We have an opportunity to take our truck equity and bridge it over to the car side with new offerings and become relevant on both sides. There isn’t anything in Chevrolet’s brand that young people can’t relate to,” Ritter believes, “and that’s good.” He cites Rolling Stone magazine and a feature of up and coming artists shown with current, past and future Chevys. “You know, when Midwestern companies try to be cool,” he confides, “they come off a little bit like dork, and that isn’t the case here. This is real stuff.