Troy Clarke, president of General Motors North America confirmed this afternoon that its assembly plant in Orion Township and stamping facility in Pontiac, both in Michigan, will build its future small sub-compact B-car and another larger C-size car, of roughly the size of the Toyota Corolla.
The volume car in the plant, at about 100,000 units annually will be B-sized, a class that includes the current Chevrolet Aveo and G3 Pontiac, which are currently imported for sale here. Other B-size cars in the U.S. include the Honda Fit and Nissan Versa, on sale for years now, as well as the upcoming Ford Fiesta, which is belatedly due next year.
This is one of the toughest most competitive segments in the world, and one that is dominated by offshore brands that have government protectionist policies, and high fuel and car registration taxes to support them.
GM is part of this global trend that has clearly hurt the U.S. economy. GM Daewoo Auto & Technology (GM Daewoo) in May sold domestically in Korea 8,155 vehicles and exported 35,823 vehicles. Established in 2002, GM Daewoo now produces vehicles and kits for Chevrolet, Buick, Opel, Vauxhall, Pontiac, Holden and Suzuki that are offered in more than 150 markets on six continents.
Conventional wisdom has long held that American manufacturers cannot make money on small cars, especially if they are built in the U.S., where labor rates and productivity have been non-competitive with foreign, and especially Asian manufacturers. But the numerous concessions made by the union, in recent years, and recent givebacks meant to turn around the domestic industry, have changed the equation.
Chevrolets’ Avea is currently selling in the U.S. at about 40,000 units annually, a mere footnote in sales charts, and Clarke frankly admitted that GM is banking on rising fuel prices to increase demand and make the car profitable. He also said the attributes of the new — as yet unnamed B-car — would also help sales of the car, which is said to be an upgrade on the current B-size platform that is based on a Korean design from Daewoo. The new B, like its predecessors, will be built globally at “several plants.”