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Old 05-18-2006, 04:36 PM
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Default GM Death Watch 74: The Refresh that Pauses

GM Death Watch 74: The Refresh that Pauses

18 May 2006
By Andrew Dederer

Last year, GM unveiled a funky retro-styled vanlet called the HHR (Heritage High Roof). Although the HHR has generated some much-needed action on Chevrolet dealers' lots, the vehicle?s character and genesis is an ominous sign that all is not well within GM?s product development process. For one thing, the HHR is a bin-engineered clone of its competitor, the PT Cruiser, designed by the same man who penned the Chrysler. For another, there was a five-year gap between the PT and the Me-Too. In other words, when it comes to creating products for the US market, General Motors is dim, cheap and slow.

To be fair, GM?s current vehicles are generally 80 to 90% as good as the class-leading benchmarks. TTAC readers might not choose a Pontiac Torrent over a Honda CR-V, but there?s nothing wrong with the Pontiac that automatically disqualifies it from consideration. Right now, that is. A few years down the road, things start to get ugly. When it's time to update a product-- not just adding new options and colors, making significant mechanical and cosmetic improvements-- GM has been known to let a new vehicle slip seven years or longer between refreshes. In contrast, The General?s foreign competition is fully committed to a five or six-year product cycle. As a result, GM?s products are falling further and further behind, until they become obsolete. For example...

GM introduced its first J-car, the Chevrolet Cavalier, in March 1981. Eight years later, the Cavalier and its platform-sharing partners (Firenza, Skyhawk, Sunbird, etc.) received curvier styling and some mild mechanical tweaks. Meanwhile, the competition moved in. The third AND fourth generation Honda Civic beat the J-cars first redesign by a year. Six years after that, GM finally unleashed a J-car update. The following year, the sixth generation Civic arrived. Even with a year?s head start, GM had managed to put out just two redesigns against Honda?s five. Fleet sales and other discounts soon damaged the J-cars so badly GM abandoned the entire model-range. The new Cobalt enjoyed just one year?s grace before another new Civic blew it into the weeds.

The story of GM?s minivans is even more depressing. GM entered the market in the late 80s with an innovative design (pre-Saturn plastic panels) and fancy Italian styling. Unfortunately, the four-cylinder engines made their vehicles slow, the design made them weird (dust buster) and the architecture was too narrow. Five years after introduction, GM finally ditched the plastic panels and funky nose, and fitted a better engine. Seven years passed before GM?s next ?update?: a literal nose job, without any significant engineering improvements. Buick and Saturn were added to the fold, offering GM customers four variations on a narrow minivan with ten-year-old mechanicals.

Before GM?s first minivan update, Chrysler ?jelly-beaned? their people mover and added another door. Once again, Chrysler?s product began to dominate the sector. Between the later two GM updates, Honda introduced, and then updated, their superb Odyssey. Honda scooped the cream of the segment from Chrysler, Chrysler was forced down market and GM was relegated to the fringes. More instructively, Toyota arrived on the scene in 1990, flopped spectacularly, tried again after eight years with an all-new vehicle (the Sienna), tried again after five years of minor success (with another total redesign) and then, finally, gained traction in this highly-profitable segment.

Toyota?s tenacity highlights another problem with GM?s product updates. Unless a vehicle is very successful or very unsuccessful, The General tends to hold off on expensive redesigns. With GM?s [overly] extensive distribution chain, an ?adequate? vehicle can sell for years. Unfortunately, these ageing vehicles aren?t very profitable. Equally important, the non-competitive products are highly unlikely to tempt their competitors? customers, denying GM the conquest sales they need to gain-- or maintain-- vital market share.

GM?s updates also tend to be far less comprehensive than their competitors?. They?ll change the shell and maybe the engine (usually for another old pushrod). Remember: an 80% refresh of an 80% car creates a car that's only 64% as good as its more advanced alternative. By contrast, Toyota and Honda are ready, willing and able to change anything up to and including an entire vehicle platform-- and still manage to beat GM?s update by one or two model cycles. The end result of GM's lethargy is a car in need of a complete re-build (and usually a new name).

Designing and improving cars is hugely expensive. Given The General?s current cash crunch, there must be enormous pressure for product developers to cut corners wherever possible. As it is, the endless procession of eighty percent vehicles and too-late refreshes is sending GM?s market share into terminal decline. Remember that the Chevrolet Cobalt and the Saturn Relay were designed when GM was flush. Imagine what will happen if they have to skimp.
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