Chevy Malibu's Quantum Leap

The good stuff you've heard about the all new Malibu is truebut it still faces stiff competition from the Camry and Accord

Editor's Rating:

The Good: Price, handling, good looks, classy interior

The Bad: Short supplies, fuel economy of 6-cylinder and hybrid models

The Bottom Line: A vastly improved and impressive Malibu still faces stiff competition

Up Front

Is the new Chevy Malibu good enough to take sales away from the Toyota Camry and Honda Accord, the nation's top-selling cars this year? Car and Driver, the bible of driving enthusiasts, seems to think so. The magazine just put the Malibu on its latest Top Ten Cars list, and Editor-in-Chief Csaba Csere has said Chevy's new sedan is better than the Camry—and close to a match for the newly redesigned '08 Accord.

My reaction to this is, whoa! The Malibu is the best Chevy I've ever driven that wasn't a Corvette, and much better than the kind of cars we had come to expect from General Motors (GM) until recently. But better than a Camry? I don't think so. Yes, I know Consumer Reports recently removed the 6-cylinder engine version of the Camry from its recommended list because of quality glitches. But there's a reason the Camry is America's top-selling model. It's still a great car, and its average selling price is considerably lower than the new Malibu's (details on that later).

What you can say about the Malibu—and this is high praise—is that it's a credible competitor that can hold its own with the Camry and Accord for the first time. If you want to support a domestic manufacturer, you can buy one with little fear of being disappointed, which wasn't the case before. However, for my money the class act in the segment is the '08 Accord. And the Malibu still has to prove it can match the reliability and resale value of the Toyota (TM) and Honda (HMC), to say nothing of Nissan's (NSANY) Altima and Ford Motor's (F) Fusion.

That said, the '08 Chevy Malibu represents a quantum leap for Chevy. Like the new Saturn Aura, which is built on the same platform, the '08 Malibu is a good-looking, solidly put-together car with a classy interior at a reasonable price. Chevy has also stiffened up the car's frame and given it an independent rear suspension and hydraulic power-assisted steering (on the V6 powered version), so the new Malibu is surprisingly sporty to drive. In fact, the big problem right now is finding one to buy: GM says the '08 Malibus sell within a week of hitting a dealer's lot.

The new Malibu comes in three styles: the basic LS, starting at $19,995, the LT, starting at $20,955, and the LTZ, starting at $26,995. The LS only comes with a 169-horsepower, 4-cylinder engine paired with a 4-speed automatic transmission. A 3.6-liter, 252-horsepower V-6 engine paired with a smoother 6-speed automatic is available as an option on the LT and comes standard on the LTZ. You can also get the LTZ with a 4-cylinder engine paired with the 6-speed automatic.

A 164-horsepower "mild" hybrid Malibu, in which the 4-cylinder is aided part-time by an electric motor (the engine also shuts off at idle, and regenerative brakes capture the energy normally lost during braking), is also available. The hybrid's base price is $22,790, and the car qualifies for a $1,300 federal tax credit.

Bells and Whistles

All versions of the new Malibu come loaded with standard gear, including XM satellite radio and OnStar service with remote diagnostic capability, front and side curtain airbags with front seat belt pretensioners, antilock brakes, tire pressure monitors, and traction and (on the LT and LTZ) stability control.

The LS comes with keyless entry, full power accessories, and air conditioning. The LT, which comes in two versions, adds 17-in. alloy wheels and steering-wheel-mounted audio controls in its less expensive version and a power drive seat, remote starter, leather-wrapped steering wheel, power pedals, and heated front seats in its more expensive version. The LTZ adds a bunch of other upgrades, including two-tone leather interior, a better sound system, fog lamps, and a power passenger seat.

There are virtually no options on the basic LT, other than body-colored side molding ($150) and metallic black paint ($95). The LS can be had with a power sunroof ($800) and a Power Convenience Package ($515) that includes a six-way adjustable driver's seat, adjustable pedals, and a remote starting function. The Convenience Package add-ons come standard on the LTZ, but a sunroof still costs an extra $800.

Powered by a 4-cylinder engine, the Malibu equals the fuel efficiency of Japanese competitors. It's rated to get 22 mpg in the city and 30 on the highway, vs. 21/31 for the comparable 4-cylinder Camry and Accord. (In 350 miles of mainly highway driving, I got 25.7 in my test Malibu.)

However, both the hybrid and 6-cylinder Malibus lag the Camry and Accord slightly. The 6-cylinder version is rated at 17 mpg in the city and 26 on the highway, vs. 19/29 for the Accord and 19/28 for the Camry. (A comparable Altima is rated about the same as a Malibu, and a Fusion slightly lower.)

Like the Saturn Aura Hybrid, which it resembles, the hybrid Malibu, which is rated at 24 mpg in the city and 32 on the highway, lags the Camry (33/34) and Altima (35/33) hybrids.

GM says retail sales of the Malibu were up 40%, to 5,913, in November, when the model hit the showrooms. However, the company has a lot of housecleaning to do before the Malibu's overall numbers turn positive, because it had been pumping up the stats of the '07 Malibu with low-margin sales to government and commercial fleets. As GM pared back on that business, combined sales of the new and old Malibu slumped 12.5%, to 7,210, in the month of November. And despite heavy fleet sales, overall Malibu sales plunged a disastrous 23.8%, to 116,140, in the first 11 months of this year, leaving the Chevy way behind its rivals. The majority of these, of course, were the inferior '07 version.

By way of comparison, during the same period the Camry was up 5.8%, to 434,277, the Accord (excluding the hybrid version, which is being phased out) up 10.8%, to 360,976, the Altima up 24.6%, to 259,611, and the Fusion up 38.8%, to 136,007. However, sales growth for the Camry, Altima, and Fusion slowed dramatically in November, while the Accord continued to soar 25.2%, to 28,161.

The bottom line is clear. Demand is high right now for fuel-efficient midsize family sedans. But if GM is going to increase Malibu sales to over 200,000 per year, as it hopes, it will have to overcome stiff competition, notably from the Accord.

Behind the Wheel

Slip behind the wheel of a new Malibu, and it's hard to believe it's a Chevy. Even lower-end models have none of the chintzy plastic accoutrements that have marred Chevrolets in the past. And on the LTZ, the two-tone leather upholstery and the curve of the wood trim across the dash are genuinely attractive and upscale looking. The LTZ doesn't quite rival the interior of a top-of-the-line '08 Accord EX-L, which resembles an entry-level luxury car, but it comes close.

GM has also learned how small design flourishes—such as the attractive aqua-blue instrument lighting, similar to the lighting in the hot-selling Buick Enclave—can add to the cabin's appeal without driving up the price.

The Malibu is based on the same European platform as the Saturn Aura, and the origins are apparent in its driving characteristics. The steering feels more precise than in most domestic cars. Even the 4-cylinder engine has a dull throb when you push it hard, but the cabin is quiet. The suspension is sporty without being overly hard. Unless you hit a deep pothole, you don't get the alarming thud you do in many domestic models. And the brakes grab at least as well as the new Accord's, which is saying something.

Powered by the 4-cylinder, the Malibu is quick enough to be practical but not especially sporty to drive. There's plenty of power to pass at highway speed. But I timed the Malibu at only about 10 seconds in accelerating from zero to 60 mph, which is adequate for a family car that gets good mileage but not exactly Corvette-style speed.

The 6-cylinder Malibu, on the other hand, will surprise driving enthusiasts who haven't driven a Chevy sedan lately. I didn't get a zero-to-60 time on it, but has clocked it at 6.6 seconds, which is quick for a family sedan—about equal to a comparable Camry and a tad faster than the new Accord, which I clocked at seven seconds. In the Malibu, the bigger engine also comes with responsive steering-wheel-mounted paddle shifters that make putting it through its paces a blast.

The new Malibu is slightly bigger than the old one—a bit wider and taller, and three inches longer. The new Accord is even bigger, but the Malibu, Fusion, Camry, and Altima are all similar in size. Leg and headroom are adequate up front unless you're unusually tall, but a bit tight in the rear seat. Shoulder room in the rear seat—which is listed at only 54 in.—is noticeably tighter in the Malibu than in rival models. Three adults won't be comfortable back there for long.

The Malibu's exterior styling—with its new duel-port grille, big headlights, high window line, and low roof—is far better looking than the old Malibu. But good looks come at a price: The side and rear windows are unusually narrow, and the windshield is raked sharply forward. You just can't see out as well as from, say, the new Accord, where the larger windows give you a more panoramic view. There's also a major blind spot over the driver's right shoulder in the Malibu.

Buy It or Bag It

The price of the base model '08 Malibu is $2,100 higher than the comparable '07 Malibu—and it's worth every penny, given how much the car has been improved. Despite the price hike, the '08 Malibu's average selling price of $22,365 is still nearly $500 under the average for its segment, according to the Power Information Network, which, like BusinessWeek, is a unit of The McGraw-Hill Companies.

At an average price of $24,956, the Honda Accord costs nearly $2,600 more, and the Altima, at $23,376, a grand more. The Camry, by contrast, is a bargain at $22,000, though the screaming bargain in the segment is Ford's (F) Fusion, which sells for an average of $20,435, according to PIN.

This is a hot segment. But don't be afraid to bargain on price. Only the Accord is selling with no rebates at all. The average rebate on the other models is about $1,100, though PIN cautions that figure includes customer loyalty coupons and other discounts that aren't available to everyone.

If you're considering one of the Malibu's rivals, give the new Chevy a test drive. You'll probably be surprised by how good it is. If there's something you don't like about it, not to worry. Go with the competitor. In this segment, all the choices are good.

For more on the 2008 Chevrolet Malibu, see BusinessWeek's slide show.

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