An "American BMW"? Don't Hold Your Breath

Bob Lutz's plan to revamp Pontiac is still in first gear

Could the Pontiac brand possibly be more of a irritant to General Motors Corp. (GM ) Vice-Chairman Robert A. Lutz? GM's car-development czar, who once developed the sporty Dodge Viper and Plymouth Prowler cars, has staked his reputation on injecting real personality into GM's blurred brands.

Yet Pontiac's recent identity has been based on a fabrication: It markets itself as GM's excitement division while offering a lineup of glammed-up Chevrolets and Buicks that fool no one with their faux sportiness. No surprise, then, that Lutz ordered a makeover of Pontiac almost as soon as he took over GM's product works 18 months ago. Says Lutz: "We want to make Pontiac an affordable, American BMW."

Even Lutz doesn't really expect Pontiac to go head to head with BMW. He'd be content to restore it to its earlier glory as a 1960s emblem of the open road, heralded in pop anthems like Little GTO. His plan is to reengineer some cars with the rear-wheel drive that driving enthusiasts prefer. In time, many Pontiacs will share platforms and suspensions with high-end Cadillacs and Saabs. But it could be years before enough new cars arrive to make a difference.

Just steering Pontiac's image away from cheap, let alone making it chic, could take most of the decade. Despite its status as GM's No. 2 passenger-car brand, Pontiac's sales have fallen 16% in the past four years, to 516,000 units. And that's with two new SUVs. To compensate for a lineup of cheesy compacts and ugly muscle cars, such as the recently killed Firebird, Pontiac resorted to flashy styling. The result: a heavy reliance on plastic exterior trim and at least one aesthetic disaster, the Aztek SUV. "The Pontiac brand is suspect to me because of all the plastic they use," says John Miller, 41, an info-tech director in San Francisco who drives a BMW.

Little wonder Lutz attacked first on the styling front, where cosmetic changes can be made quickly. He stripped the plastic cladding off the body panels of the new Grand Prix arriving this month. And he challenged his designers to a sketch-off to come up with the Pontiac Solstice roadster, a stylish two-seater that was the hit of the 2002 Detroit auto show.

Lutz's boldest move so far was to go retro--grabbing GM's Australian-made Holden Monaro sports car and turning it into a modern-day GTO. True to its namesake, a storied muscle car phased out in 1974, the new GTO will have a 340-horsepower V-8 engine and rear-wheel drive when it goes on sale this fall. It also sports a nimbler ride. But dealers say the car's tame jellybean shape and limited production--about 18,000 cars a year--will limit its spark. "What we really need is something like the Chrysler PT Cruiser that's priced around $20,000 and really looks good," says Arlington (Tex.) dealer Buz Post.

Don't expect that in the next year. GM will stuff a V-8 engine in the 2004 Bonneville, but the car will otherwise get limited changes. Likewise, the new Grand Prix that arrives in showrooms this month was engineered to drive with tight steering and fun handling. But it's built with the same engine as the current car and with similar styling.

The revamp won't reach Pontiac's volume cars until an all-new Grand Am, the brand's best seller, comes to market in 2004--possibly with a new name. Using the chassis of the Saab 9-3 sports sedan, it promises to drive well. Pontiac insiders say it will look like the sleek G6 concept car from the Detroit show, giving it the flair of a European sports sedan. The sexy Solstice convertible is expected around 2006. A year later, all-new, rear-wheel-drive Grand Prix and Bonneville models should arrive, using the Cadillac CTS chassis.

That is a long time to limp along with old stuff. "If a poor man's BMW is the goal, then they're a decade away," says Nextrend Inc. analyst Wesley Brown. The ever-impatient Lutz faces a lonely stretch of blacktop before he gets this muscle car over the finish line.

By David Welch in Detroit

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