General Motors is sticking to its decision to offer just the Chevrolet Cruze’s sedan body type in the U.S. market even as it has launched the Chevrolet European Cruze wagon at the Geneva Auto Show. GM is very keen on implementing its sedan-only strategy for the top-selling Cruze in the U.S., killing hopes of those who want the Cruze model as a wagon, hatchback or a coupe.
GM’s current strategy for the Cruze is the direct opposite of what the old GM could have done. But that was the old GM. The current GM, which has regained its top position in the global car market, is also implementing a strategy quite different from its rivals, which have been focusing on creating variants of a single model to cater to different types of customers
For example, Hyundai Motor America plans to roll out this spring a coupe and hatchback versions for its Elantra compact, in hopes of boosting sales. In 2011, Honda Motor Co. launched a refreshed Civic coupe while Ford introduced its redesigned Focus with sedan and hatchback versions.
Looking at Cruze’s predecessors, the Cobalt and Cavalier, GM launched variants of these models, but these were not as successful as the Cruze has been.
What’s believed to be the primary reason for its decision to adopt a Cruze sedan-only strategy is GM’s drive to make profit. GM CEO Dan Akerson and CFO Dan Ammann are targeting to hike pretax global profit margins to 10 percent within the next several years, from 6% in 2011.
Should GM decide to offer other versions of the Cruze, it would have to retool its US assembly sites, adding more costs to the company’s balance sheet and eating up profit. Adding tooling would also be risky since there is a low demand for wagons and hatchbacks in the US. The profit from the sales of the variants is enough to justify the investment. "You risk adding a vehicle that might not sell as well as you had hoped, and then it hurts the margins," GM spokesman Tom Wilkinson said.