Launch of GM's Cruze delayed 3 months

Robert Snell / The Detroit News

General Motors Co. said it has delayed the launch of its Chevrolet Cruze small car about three months until the third quarter of 2010 to ensure a flawless launch.

The delay also will give GM time to produce all variations of Cruze models, the automaker said Wednesday. It was not related to any problems associated with earlier Cruze launches in Europe or China, GM spokesman Klaus-Peter Martin said.

Industry analyst Erich Merkle of Autoconomy.com has not heard of any problems associated with the Cruze, but said GM needs a flawless launch in a competitive segment.

The delay shouldn't hurt GM in the small car segment and the Cruze will still debut before the all-new Ford Focus.

"If it is delayed a little bit, that's better than bringing something out and not having it go properly," Merkle said. "Is the Cruze GM's silver bullet? Definitely not, but it will probably enhance and boost sales over and above the Cobalt."

The delay comes a month after President Barack Obama visited Ohio's Lordstown Assembly plant, where the Cruze will be built, and hailed economic recovery efforts that are putting more than 1,000 workers back on the job.

The Cruze is seen as one of the most important new launches for GM since it emerged from bankruptcy court July 10 after receiving about $50 billion in federal aid and shedding billions in debt.

GM is spending about $350 million updating the plant to produce the Cruze, which is expected to get about 40 miles per gallon and help cut reliance on foreign oil.

Until the Cruze goes into production, GM will continue to produce the Chevrolet Cobalt.

Also Wednesday, GM said it anticipates its October vehicle sales will rise compared to a year earlier, the first such increase for the automaker in 21 months.

Mike DiGiovanni, GM's director of global market analysis, pointed to improving economic conditions, including a return to more normal credit markets, increased manufacturing and demand for new GM vehicles such as the Chevrolet Camaro and Equinox, as reasons for being cautiously optimistic.

October sales will be released Tuesday. GM sales dropped 45 percent last month and have fallen 36.4 percent this year.

"We know we are not out of the woods yet," he told reporters during a conference call.

GM's sales performance last October plummeted dramatically amid a credit crisis that impacted the entire U.S. economy and sent U.S. vehicle sales to the lowest level in 17 years.

In October 2008, GM sales fell 45 percent, led by a 51 percent decline in truck sales.

Susan Docherty, GM vice president of U.S. sales, said the automaker is making an aggressive push to retain customers who bought from a shuttered dealership or brand -- Saturn, Saab, Hummer and Pontiac -- being eliminated or sold in a broad restructuring.

Next week, GM will mail about 1.6 million people a package of information offering a free oil change and product information on new vehicles.

rsnell@detnews.com (313) 222-2028