Friday, August 5, 2005

2005 Chevrolet Aveo LS Sedan

GM plans new line of small cars

South Korean unit will build front-wheel drive autos to be sold mostly overseas.

By Ed Garsten / The Detroit News

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TRAVERSE CITY -- General Motors Corp. plans to produce a new family of small cars in the next six years and more than double its line of crossover vehicles by 2009, a senior product development executive said Thursday.

At the same time, the automaker will reduce the number of vehicle architectures, the basic underpinnings for cars and trucks, it uses by half.

The small cars will be built by GM's South Korean unit, GM Daewoo Auto & Technology, said John Smith, GM group vice president for global product development planning.

"They are products that are absolutely right for the market in Asia-Pacific and could well support some of our entry level expansion plans in Europe and in certain markets in North America," Smith said.

About 700,000 of the front-wheel drive vehicles will be built as notchbacks, hatchbacks and a multi-activity vehicle, Smith said.

GM-DAT produces the Chevrolet Aveo for the U.S. market and other Chevrolet vehicles sold in Europe.

Detroit automakers have struggled to make money on small cars for years, but GM has enjoyed success with GM-DAT.

"Small cars are effective in giving GM a foothold in emerging and expanding markets," said Erich Merkle, senior analyst at Grand Rapids consultants IRN Inc.

GM has been slow to expand its crossover offerings, which have grown in popularity as consumers shift away from truck-based SUVs.

Crossovers are built on passenger car platforms, giving them car-like ride and handling.

By 2009, GM plans to expand its crossover offerings to 14 from 6, with annual sales of about 800,000 vehicles, Smith said.

You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com