Can General Motors Co. build a first-rate small car in America and make money selling it? Forty years of history says no, but the automaker's fate -- and thousands of jobs at plants in Michigan and Ohio -- rests on its ability to end a litany of failures dating to the 1971 Chevrolet Vega. GM sold 2.8 million compact and smaller cars around the world in 2008. From China to Europe to Brazil, GM's Chevrolet and Opel small cars match the best from Honda, Toyota and Volkswagen.
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The 443,000 small cars GM sold in the United States were the exception to that. For nearly four decades, GM's North American operations seemed to build small cars out of a sense of obligation more than a desire to compete.
There's an explanation for that -- though it's one only an accountant could love. GM made less money on small cars than bigger ones and trucks. It got a better return on its investment by concentrating money and resources on trucks. GM had to build small cars to meet federal fuel economy requirements, but the law couldn't force it to build good cars.
"They never really had their heart in it," said Joe Phillippi, principal of AutoTrends Consulting in Short Hills, N.J.
Compact, subcompact and tiny mini cars are never likely to outsell larger vehicles in the United States. But with truck sales expected to fall and gas prices certain to rise, GM can no longer afford to lose money on small cars. The new generation of vehicles GM will introduce beginning next year must be good enough to sell for the same price as competitors, like the Honda Civic compact and Toyota Yaris.
"GM has a lot of resistance to get past," said Stephanie Brinley of the consulting firm AutoPacific. "To get the same price as a Civic, a Chevrolet has to be better than the Honda," she said. "They've got to knock it out of the ballpark. GM is capable of doing that."
A look at GM's current model lineup helps explain Brinley's optimism.
The compact Chevrolet Cobalt beats the Civic and essentially matches the Toyota Corolla on fuel economy. The Saturn Astra's fuel economy easily tops the VW Golf and Nissan Sentra
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The 443,000 small cars GM sold in the United States were the exception to that. For nearly four decades, GM's North American operations seemed to build small cars out of a sense of obligation more than a desire to compete.
There's an explanation for that -- though it's one only an accountant could love. GM made less money on small cars than bigger ones and trucks. It got a better return on its investment by concentrating money and resources on trucks. GM had to build small cars to meet federal fuel economy requirements, but the law couldn't force it to build good cars.
"They never really had their heart in it," said Joe Phillippi, principal of AutoTrends Consulting in Short Hills, N.J.
Compact, subcompact and tiny mini cars are never likely to outsell larger vehicles in the United States. But with truck sales expected to fall and gas prices certain to rise, GM can no longer afford to lose money on small cars. The new generation of vehicles GM will introduce beginning next year must be good enough to sell for the same price as competitors, like the Honda Civic compact and Toyota Yaris.
"GM has a lot of resistance to get past," said Stephanie Brinley of the consulting firm AutoPacific. "To get the same price as a Civic, a Chevrolet has to be better than the Honda," she said. "They've got to knock it out of the ballpark. GM is capable of doing that."
A look at GM's current model lineup helps explain Brinley's optimism.
The compact Chevrolet Cobalt beats the Civic and essentially matches the Toyota Corolla on fuel economy. The Saturn Astra's fuel economy easily tops the VW Golf and Nissan Sentra
