Opinion: GM Shooting Itself in Foot By Killing Chevrolet Malibu


opinion gm shooting itself in foot by killing chevrolet malibu

The Chevrolet Malibu is dead.

Or, at least, it will be come November.

This despite the fact that the sedan was the third-best selling Chevrolet, behind only the Equinox and Silverado.

On the other hand, Q1 sales for the car were down 13 percent year-over-year. And I am sure some Malibus were being bought by fleets, not Joe and Jane down the street.

Either way, I think the fact that Chevrolet will not, at least for a while, have a sedan on offer is a bad decision.

I could understand if the Malibu was really slow-selling — it was no surprise when Subaru axed the Legacy, for example. But given that it was one of the better-selling Chevys, I am scratching my head a bit.

Sure, the current Malibu is a bit behind the competition — most car reviewers would place it behind the segment stalwarts from Honda and Toyota, and clearly most buyers have, too — but it is still affordable and fuel efficient.

opinion gm shooting itself in foot by killing chevrolet malibu

I know, I know, crossovers are king right now — but there is still demand for sedans. Yet GM seems content to let Honda, Toyota (which has a new Camry launching), and Hyundai/Kia compete for sedan buyers.

Ford and Stellantis have mostly exited the space, too. And to be fair to GM, you can still get a Cadillac in sedan form.

We’ve been told that OEMs are killing sedans because it’s cheaper to build crossovers, and since crossovers are in high demand, automakers can charge more for them.

That second part is true, and the first part definitely applies to body-on-frame SUVs. However, it’s not clear if unibody crossovers, many of which share platforms with current or currently dead sedans, are cheaper to build. Robby DeGraff, Manager, Product and Consumer Insights at AutoPacific, tells me that unibody crossovers may cost slightly more to build than cars, but not a lot.

The problem I have with the culling of sedans is the short-sightedness. Yes, crossovers are hot and yes they can make OEMs money. But even if sedans are no longer the dominant family car, some people still prefer them, for a variety of reasons. It may be improved fuel economy or ride and handling. Some folks don’t want to climb up into a taller vehicle. Some folks just would rather spend less money than a crossover might command.

So, why not keep an entry in the class? Especially at a reasonable price? Especially since sedans could be an entry into the brand family for someone who might later switch to a crossover?

Think of it this way — some Malibu buyers were probably young professionals buying their first new car. Some of those folks may have switched to, say, an Equinox when it came time to start a family.

So Chevrolet now cedes the sedan market to Honda and Toyota while also hoping the (admittedly very good) Trax crossover is the gateway to the brand. Seems silly to me.

I understand that businesses want to turn a profit. I am not suggesting automakers continue to build slow-selling models just because some of us would prefer to drive those types of models. I understand that, with the exception of low-volume niche models (think performance cars), demand matters.

opinion gm shooting itself in foot by killing chevrolet malibu

What gets my goat is that it seemed like demand for the Malibu was strong enough to justify its continued existence — and I think overall sedan demand is still strong enough that most full-line automakers should probably have an entry or two available, despite minor sales slides in Q1 this year. I think those that those who don’t are harming their long-term health for short-term profit.

Maybe I am wrong. I am paid to give me (as informed as possible) opinion of the industry, and I am not paid by GM to sit in the kind of meetings that determine the fate of cars like the Malibu. Maybe GM has internal data that suggests Chevy will be just fine without the Malibu. Maybe I am wrong about the amount of demand for sedans exists among consumers.

Surely, the Accord and Camry move well based on history, as well — both cars have been popular for a long time. The Accord has long held a rep as being a family car that’s fun to drive, while the Camry has won folks over by being very good at the job of basic transportation. Both companies also have reputations for reliability and fuel efficiency. That matters to shoppers.

The Malibu wasn’t quite as fun to drive, nor did it have stylish looks. And Chevy’s reputation for reliability, fair or not, isn’t on par with Honda and Toyota.

Chevrolet could’ve rectified this by making a better Malibu. Instead, it will throw up its hands and say “all anyone wants is a crossover, so let’s save some bucks by not offering any family cars”.

Financially, that approach will likely work in the short term. But again, the company is ceding a part of the market to its competitors instead of, you know, at least trying to fight for sales. It’s missing an opportunity to bring more folks into the Chevy brand.

Finally, given the lead times to develop a new vehicle (3-5 years), GM and Chevrolet may find themselves flat-footed should the crossover craze fizzle and folks flock back to sedans.

Or if the Chinese come to our market with well-built, affordable sedans — most of which would be EVs. It’s as if GM has forgotten how Honda and Toyota came into the U.S. with mid-size and compact cars that were worlds better than anything Detroit built, thus knocking the domestics onto their heels for a long time. It took until 2008 for Chevrolet to have a decent mid-size — that was, of course, the seventh-gen Malibu.

I admit my anger is at more than just Chevy/GM here. I am still smarting over the loss of the Ford Fusion, which looked great and drove well — it’s only real flaw was a lack of rear headroom. The last Focus was a good compact four-door with a killer performance trim.

Meanwhile, Stellantis never did get the mid-size segment right, though the last Chrysler 200 tried.

opinion gm shooting itself in foot by killing chevrolet malibu

It’s as if the Detroit Three would rather not build compact or mid-size sedans than make the effort to make them competitive with the Japanese and Koreans — and Volkswagen’s Jetta. And soon, perhaps, the Chinese.

That might look good to certain people at the moment. But I think perhaps the Detroit Three would be better off spending the resources to put solid efforts into every major segment instead of the current strategy of putting all their efforts into trucks, crossovers, and niche performance cars. Potential sales are being left on the table. Sometimes spending money is necessary to make money.

Short-term thinking has too often been a problem with American automakers. It’s sad to see it happening again.

[Images: Chevrolet/GM]

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