Redesigned GM cars begin to hit market Company releasing 14 new versions in 1997 model year

Ad approach is revamped

Strategy is to target specific vehicles to type of customer

September 22, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

To listen to Stanley Penn, Pontiac's redesigned Grand Prix is doing just what General Motors Corp. had hoped.

"It has an entirely new look," said the president of Penn Pontiac as he showed off a bright red coupe in his Southeast Baltimore showroom.

"Our Grand Prix sales have doubled and we're selling to people who would be spending $10,000 more on a foreign car like the Acura, Lexus or Infiniti."

The Grand Prix, which appeared in showrooms across the country about a month ago, is one of the first of 14 completely redesigned cars and vans that GM will be introducing for the 1997 model year, as the world's largest automaker seeks to shed its long-standing reputation as the world's largest producer of outdated vehicles.

"This is the most new models we will have introduced since 1980," said Edward Lechtzin, a spokesman for GM in Detroit.

By this time next year, GM will have replaced a fourth of its lineup.

The offerings include three new minivans to replace the poor-selling, plastic-bodied, long-nosed "Dustbuster" vans.

The Malibu returns as a midsize sedan to replace the Corsica and Beretta.

Cadillac will have the Catera, a $30,000 baby Cad aimed at the import-minded baby boomer.

The midsize line is being redesigned for the first time in 14 years with a new Buick Century and Olds Cutlass replacing the aged Ciera.

For those in the fast lane, a redesigned Corvette bows in the first quarter of 1997.

It has a trunk and more horsepower, and the transmission will be shifted to the rear for better weight distribution.

There is even an electric car, a $35,000 two-seater that initially will be sold only at Saturn dealers in Arizona and California.

It doesn't end with the 1997 lineup.

GM will continue replacing old cars with new cars at a rate of about one a month through the end of the decade.

It's all part of a multibillion-dollar plan to halt the long decline of GM's share of the U.S. car and light truck market and to wipe away the haunting memories of its near bankruptcy earlier in the decade that robbed the company of the cash needed to develop fresh products.

There's a lot riding on the new vehicles.

"The management at GM is not betting the company on these cars," said David Healy, an auto analyst with Burnham Securities, "but on the other hand, it will be a huge problem for them if these cars don't fly any better than Ford's new Taurus did."

Healy said GM's new products will be more conservatively designed than the Taurus and there will be less risk of them turning off a segment of the car-buying public.

"This is an extremely important 12-month period for General Motors," said Maryann Keller of Furman Selz Inc., one of Wall Street's most influential auto industry analysts.

Noting that GM has lost 10 percent of its market share since the early 1980s, Keller said that all of the new models need to be successful if the automaker is going make a U-turn and and start recapturing market share.

GM now has about 31 percent of the auto market, down from about 50 percent in the 1960s, when it was such a dominant force that some lawmakers in Washington considered breaking up the company.

The influx of new models is "crucial also to General Motors' strategy of maintaining six car divisions," Keller said.

"You can't maintain six car divisions with 31 percent of the [domestic] car market."

Keller said the new models could be the savior of GM's struggling Oldsmobile division, which is expected to sell fewer than 350,000 cars this year.

The Olds division used to sell a million cars a year, she said.

L The managers at Olds are not the only ones who are sweating.

This is going to be a tense year for a lot of people at GM, said David E. Cole, director of the University of Michigan's Office for the Study of Automotive Transportation.

The pressure is on, he said.

"They are apprehensive, as anyone would be with such a large array of new products, but at the same time I think there is a level of confidence at GM that I haven't seen in a long, long time.

"They don't feel like they are shooting from the hip.

"They have done their homework and they think their lineup is right for the market," Cole said.

He added that GM's confidence has received a big boost in recent years by the success of three other redesigned cars -- the Lumina, Monte Carlo and Cavalier.

In 1994 GM redesigned the Lumina, which had been offered in four-door and coupe models. The Lumina name was retained for the four-door sedan, but the coupe took on the Monte Carlo name. Sales jumped 85 percent in calendar 1995 and are up another 18 percent this year.

The redesigned Cavalier was troubled by production problems during its first year, 1995, but sales still rose 14 percent. They are currently running 47 percent ahead of last year's sales pace.

"I think they [the top executives at GM] will be very surprised if the new models don't work well in the marketplace," Cole said.

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