Friday, July 04, 2008

Without missing a beat . . .

General Motors Corp., which popularized the 7,800-pound Hummer, may begin selling a mini-car more than a foot shorter than anything else it markets in the U.S. to win back customers.

GM may bring the production version of the Chevrolet Beat to the U.S., people familiar with the plan said. The car, which would normally be reserved for markets such as Asia and Latin America, gets as much as 40 miles per gallon, a fuel efficiency topped in the U.S. only by hybrids.

Resigned to $4-a-gallon gasoline and stricter pollution rules, the largest U.S. automaker has recognized that its response must go beyond simply closing factories that make big pickup trucks.

"This is a very big change for GM," said John Wolkonowicz, an analyst at Global Insight Inc. in Lexington, Mass. "They have no choice. There's never been as rapid a shift in consumer demand in the history of the auto industry."

GM, which turns 100 this year, has few options to reinventing itself. The company reported its largest annual loss in 2007, $38.7 billion, after a tax accounting change, and hasn't had a profitable year since 2004. Its U.S. market share hovers at the lowest level since 1925. GM last year was 3,000 vehicles away from being dethroned by Toyota Motor Corp. as the world's largest carmaker.

The company's current market value is smaller than that of Mattel Inc., maker of Matchbox cars, and a 10th of what it was in 2000.

Besides the Beat, GM is weighing a list of options for refocusing its auto lineup on fuel efficiency rather than performance. They include the U.S. introduction of a small pickup popular in Latin America.

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