To understand how General Motors Co. is trying to exorcise the demons of its past, consider the trunk lid for the redesigned 2014 Chevrolet Impala.
It consists of five pieces of metal welded together in a deft bit of styling sculpted by the design team led by John Cafaro, director of exterior design for Chevrolet. Typically, a trunk lid is three pieces of steel, sometimes even a single sheet of steel or aluminum.
“Maybe back in past history when we weren’t doing cars as good as we should, we might have argued about this five-piece trunk lid,” Mr. Cafaro said. “It might have been three-piece; we might have compromised the design. It looks good on a data sheet in somebody’s computer, but in the showroom, you’re non-competitive.”
Instead, his design became critical to the mission of creating an elegant American sedan that could revive the Chevrolet name, GM’s most important brand, in the large-car segment.
The rejuvenation of the Impala is also crucial to the auto maker’s escalating effort to design, build and sell stylish vehicles with features consumers want – and make a profit.
“We can talk about the Corvette all day long, but the Impala should be the halo car for Chevrolet,” said veteran industry analyst Joe Phillippi, president of Auto Trends Consulting of Short Hills, N.J. “It’s the vehicle that’s going to make your brand statement, which historically was affordable quality.”
GM for years focused on growth and market share but failed to produce bottom-line results. Before the financial crisis, the lumbering giant’s high cost structure left it with massive losses despite strong sales. When the crisis hit, decades of mismanagement caught up with GM and it sank into Chapter 11 bankruptcy protection, saved only by a $60-billion government bailout.
So far, the revival of the Impala has been a shining moment for GM in its recovery from those dark days.
The 2014 model made the cover of Consumer Reports as the top-ranked sedan test-driven by the magazine’s auto experts, the first time a U.S-made car has topped that list in 20 years.
Even better for GM, the new Impala is showing early signs of generating solid profits. Average transaction prices are tracking at about $8,000 (U.S.) higher than the previous generation of the car, which has been heavily discounted and essentially consigned to the North American rental fleet, where profits are minimal. With the new Impala, GM is putting showroom sales first and fleet sales second.
GM officials said on a conference call earlier this month that Impala retail sales rose 76 per cent in August from year-earlier levels and about 80 per cent of the 13,274 cars sold in the U.S. market were 2014 models. The new model’s price starts at around $27,000 and can go to $35,000 or more with added features.
The new Impala is also encouraging for Oshawa, Ont., where 3,000 employees working on three shifts are assembling the Impala alongside the Buick Regal, Chevrolet Camaro and Cadillac XTS. GM’s Oshawa operation faces some uncertainty in the future, with one assembly plant set to close next year and the Camaro slated to end production there in 2015.
The challenge for GM now is to take the lessons learned from transforming the Impala and the way it is designed and developed and apply them to its entire lineup. That would enable the company to step up the pace of its recovery from bankruptcy protection.
A focus on cost control in recent years has already led to improvements. GM’s profit was $4.86-billion last year and $2.2-billion in the first six months of 2013, a dramatic swing from the billions of dollars in losses racked up through most of the 2000s.
‘A high-value family car’
As GM North America president Mark Reuss makes plain, the 2014 version of one of the most successful cars in GM history is more than just a new Chevrolet entrant in the large car market.
“At the heart of Chevrolet was an affordable, aspirational family car – at the very heart of Chevrolet’s success over the years,” Mr. Reuss said in an interview.