Gm's Aztek: Born To Be A Little Too Wild
General Motors Corp. (GM) has found out the hard way that it's not easy to be hip. Last summer, the carmaker's Pontiac Div. began rolling out its Aztek sport-utility vehicle, the first of several designs that GM hoped would turn around its reputation for churning out nondescript cars and reverse its market-share slide. And the Aztek is anything but blah. At Red McComb's Superior Pontiac/GMC in San Antonio, the edgy, outlandishly styled vehicle sits in the showroom next to a more conventional Hyundai Santa Fe SUV. But so far, the Korean-made Santa Fe is outselling the Aztek five to one, says Darin Hair, the dealership's sales manager. It's tough to sell many Azteks, Hair says; "People love it or hate it."
More often today, the Aztek is the vehicle people love to hate. Many dealers who try to sell it can't find kind words for the Aztek's aggressive looks. And at $22,000 to $27,000, the Aztek is overpriced for its original twenty- to thirtysomething market. Even the car-enthusiast magazines, which typically review even the worst automobiles with kid gloves, have ripped the Aztek's styling. Automobile magazine called the SUV "gut-wrenching to look at." Says James Hall, vice-president at automotive consulting firm AutoPacific Inc.: "Functionally, the Aztek is great. It just looks like six-week-old cottage cheese."
The Aztek's early sales performance has been just as ugly. In its first four months, the Aztek has averaged about 2,000 sales a month--compared with, say, 8,000 a month for Ford Motor Co.'s (F) new Escape SUV. In November, GM slapped on a $500 rebate and scaled back its annual sales forecast to 50,000, from the original 75,000. Aztek inventories remain almost triple what carmakers like to maintain. "We didn't order any this month," says Frank St. Tomas, general sales manager of Ken Grody Pontiac GMC in Carlsbad, Calif., which has 50 or 60 Azteks on its lot.
That's a rough start for a vehicle that GM had hoped would signal a design renaissance. With Aztek, GM wanted to prove it could transcend its engineering-dominated culture and design a hip, affordable vehicle for young buyers and move it quickly through a traditionally slow-moving bureaucracy. But the effort foundered when a zeal for aggressive styling at the top of GM clashed with engineering constraints, creating some awkward compromises. "My understanding is, this isn't how the vehicle was intended to look," says Nextrend Inc. analyst Wes Brown. "But they had too many hands in the pot."
"CHANGE AGENT." GM insists that the Aztek is not a disaster and that the company won't pull in its horns and return to cautious styling. "If we rely on the current engineering-driven rules, we will never be competitive," says Mark Reuss, vehicle line executive for Aztek. Still, its lessons are already being incorporated into forthcoming vehicles. Says Aztek Chief Designer Tom Peters: "The whole program has been a change agent for the company."
Some outside observers describe the Aztek as the first awkward step toward innovation by a company that has avoided that path. They liken the debacle to Ford's remodeling of its 1996 Taurus sedan--an overly aggressive and costly design that polarized buyers and led to a sharp sales falloff. In that case, though, the damage was worse because the Taurus and its sister, the Mercury Sable, were bread-and-butter cars that had sold 500,000 units in 1995. The Aztek represents a smaller risk for General Motors. Says John Taylor, a GM executive director of design: "There are going to be some balls that don't go out of the park. Overall, I'm glad we did it."
The Aztek started out a far different vehicle. Its inspiration was a 1994 sketch called Project Bear Claw, drawn in GM's now-shuttered design studio in Thousand Oaks, Calif. Bear Claw called for a smaller vehicle, more like a tall wagon with rugged styling. One GM designer describes the original drawing as "an off-road sports car." Even the Aztek show car, which debuted in Detroit in January, 1999, retained some curves in the sides and doors. The production Aztek, by contrast, has a much more pumped-up, angular body.
HAND-ME-DOWN PARTS. The first compromise was made a couple of years after the initial drawings when Detroit designers and engineers dreamed up ways to get the car into production. Bear Claw wasn't conceived for an existing platform or vehicle frame. But engineers decided to use GM's minivan platform to get to market quickly and affordably. Minivan components were available, and GM needed to sell more vehicles with those parts to boost returns for that program. The SUV could be easily built in a new plant in Ramos Arizpe, Mexico. And minivan architecture gave it a flat floor suitable for cargo. That interior space became a key selling point.
The trade-off: The Aztek took on the large, boxy dimensions of a minivan. The angular appearance was only accentuated when it was assigned to the Pontiac division. That ensured it would get a racy look, with lots of plastic molding strapped around its bottom half. Pontiac designers were urged on by top executives, who wanted to make a statement about breaking from GM's instinct for caution. Chrysler had just wowed buyers with its macho Dodge Ram pickup. With GM getting hammered for bland designs and its overall share dropping from 33% in 1994 to 28% currently, the word was passed to get flashy. One designer gripes: "It was aggressive for the sake of being aggressive." Counters Peters: "We wanted to do a bold, in-your-face vehicle that wasn't for everybody."
During development, GM's research showed that would-be buyers were sharply polarized over the Aztek's styling. But some of the young drivers who were interested may never have gotten past the price tag. That's one reason why the average age of an Aztek buyer is 46, compared with Pontiac's overall average of 42. Pontiac officials insist that a price as high as $27,000 is fair given the vehicle's size, 185-horsepower engine, and interior versatility. But analysts wonder why the Aztek is so expensive, since it uses many existing parts and is built in Mexico. Says AutoPacific's Hall: "They got greedy. Utility vehicles are hot, and they misjudged pricing."
Privately, some GM officials acknowledge mistakes with the Aztek. Executives say designers now create vehicle concepts with a specific platform in mind and give much more thought to getting to market with fewer compromises. "Concept drift--when you start with one thing and do another--is one concern of ours," Taylor says. Also, several new vehicles in the Pontiac pipeline are being toned down. The Buick Rendezvous SUV, due out next year, shares many Aztek parts but will have more mainstream styling. The Pontiac Vibe, a small sport wagon to be built with Toyota Motor Co. (TM), will be stripped of some molding. And Pontiac's concept REV sport wagon has a dramatic profile and hood scoops but no exterior plastic.
The Aztek's saving grace may be that unlike Ford's gamble on the Taurus, GM rolled the dice on a lifestyle vehicle that promised only modest sales. Still, the Aztek is generating the wrong kind of buzz. "It's not a question of lost sales, it's a question of lost brand equity," says Eric Noble, president of the Car Lab, a consulting firm in Santa Ana, Calif. "It's certainly going to taint the rest of what's in Pontiac dealers' lots." That's the risk GM took when it decided to walk on the wild side. Now, the carmaker must learn some sobering lessons on the morning after.