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GM Says Malibu Changes Intended to Boost Chevrolet Sales

GM Says Changes to Malibu Should Boost Chevy Mid-Size Sales
Chevrolet’s 2014 Malibu has a sportier front end, roomier back seat and better fuel economy. Source: General Motors Co.

May 31 (Bloomberg) -- General Motors Co., trying to boost sales of the Chevrolet Malibu after last year’s redesign, said it’s updating the mid-size sedan with a sportier front end, roomier back seat and better fuel economy.

The 2014 Malibu will have an additional 1.25 inches (3.2 centimeters) of rear knee room, a base engine that gets 5 percent better fuel efficiency in city driving and a front end that takes design cues from the larger, redesigned Chevrolet Impala sedan, which has been receiving positive reviews, the company said today in an e-mailed statement.

“We’re going to react to the marketplace,” Mark Reuss, president of GM’s North American operations, told reporters at an event on Belle Isle in Detroit. “We were not aggressive enough” with the 2013 Malibu’s styling, he said.

The revisions to the 2014 Malibu, unusually quick following last year’s total redesign, underscore the importance of the model to Chevrolet, Detroit-based GM’s largest brand. Malibu competes in a segment that includes five of the 20 most popular vehicles in the U.S. The 2014 Malibu goes on sale in the third quarter, Reuss said.

First-quarter U.S. sales of the Malibu declined 16 percent compared with a year earlier after a 6.1 percent drop in 2012’s fourth quarter, according to data compiled by researcher Autodata Corp. Malibu deliveries for 2012 rose 3 percent to 210,951 while sales of Toyota Motor Corp.’s segment-leading Camry increased 31 percent to 404,886.

Intensified Competition

Competition in the mid-size segment intensified last year as Ford Motor Co., Honda Motor Co. and Nissan Motor Co. introduced redesigned versions of the Fusion, Accord and Altima.

“Having a segment in which there are so many new entries that are good from so many different brands makes it so hard,” Jessica Caldwell, an analyst with Edmunds.com, a website that tracks automotive sales, said this week in a telephone interview. “The Malibu was the one car people pointed to that was relatively new but not as successful as the others.”

GM has already taken steps this year to help the struggling Malibu. It lowered the price of the model by as much as $770. The entry-level Malibu starts at $21,995, which excludes an $810 freight charge.

Part of Malibu’s troubles lay with its introduction last year, which stretched several months. The most expensive version arrived in U.S. showrooms in February while the cheaper, higher volume edition didn’t reach buyers until October.

‘Bragging Point?’

“The car was done a little bit before we went through bankruptcy and it was delayed,” Reuss said at today’s event. The 2013 model was “not progressive enough styling-wise.”

The Malibu also received middling reviews. The redesigned car was “good, but not great at any single thing,” Lawrence Ulrich wrote in January in the New York Times.

Mark Phelan, auto critic for the Detroit Free Press, wrote in a May 10 review that the Malibu “was a beacon of hope in GM’s darkest days, has gone adrift like a Carnival cruise ship.”

“The 2013 Malibu lacks any single, outstanding characteristic that shoppers simply can’t ignore,” Phelan wrote. “The Fusion has drop-dead looks. The Altima boasts a 38-mpg EPA highway rating. The Accord has a nonpareil reputation and resale value. What is the Malibu’s bragging point?”

The Malibu is a stumble in an otherwise improving lineup of new cars and trucks for GM. The automaker is bringing out about 20 new or refreshed vehicles in the U.S. this year as it tries to rebound from last year’s 88-year-low market share. GM joined Ford and Chrysler in gaining U.S. market share in the first quarter for the first time in 20 years.

Revamped Features

The 2014 Malibu with a 2.5-liter engine has start-stop technology, which shuts down the engine at stoplights, and variable valve lift control to get an estimated 23 miles (37 kilometers) per gallon in city driving and 35 mpg on the highways, GM said. The 2013 base Malibu got 22 mpg in city and 34 mpg in highway driving, according to the U.S. fueleconomy.gov website.

Other changes include a redesigned center console to make the armrest longer, suspension enhancements derived from the new Impala and an optional blind zone and rear-cross traffic alert system, GM said.

“We made changes within 18 months, demonstrating an unprecedented commitment to make the Malibu the best car it can be,” Ken Kelzer, GM’s executive chief engineer for global full-size and mid-size cars, said in a company statement.

GM fell 2.2 percent to $33.89 at the close in New York. The shares have gained 18 percent this year, compared with a 14 percent increase in the Standard & Poor’s 500 Index.

To contact the reporter on this story: Tim Higgins in Detroit at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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