GM Mulls Production Site for Chevy Spark
General Motors says it will make a decision by the end of the month on the production site for a forthcoming small car expected to hit the US market by early 2012. Idled GM plants in Michigan, Wisconsin and Tennessee are competing for chance to produce the Chevy Spark, with a planned production capacity of as many as 160,000 vehicles per year. GM had planned to build the cars overseas, but pressure from the United Auto Workers—and reportedly from Washington—seems to have led to a change of heart.
The Spark, which GM has marketed under the same name in several international markets since 2007, is based on a design by Italdesign Giugiaro that was originally released in South Korea in the late-1990s as the Daewoo Matiz. A more powerful, two-door version of the Matiz premiered at the 2007 New York International Auto Show as a concept vehicle called the Chevy Beat—one of a trio of small cars.
Detroit automakers are moving in unison toward smaller cars. In May, Ford announced that it would retool its Wayne, Mich. assembly plant to produce fuel-efficient compact cars and electric-drive vehicles. The plant formerly made Ford Expedition and Lincoln Navigators SUVs. Chrysler’s turnaround plans are pinned on hopes that its new relationship with FIAT will allow the company to more easily introduce smaller vehicles like the FIAT 500 to the United States. FIAT said it plans to introduce the 500, only slightly larger than a Smart ForTwo, in the US by 2011.
Last fall, Fritz Henderson—then chief operating officer and now chief executive officer at GM—said that marketing the Spark/Beat in the US wouldsm be unsuccessful. But that position apparently has been reconsidered. The American incarnation of the Spark, due in 2011, would be a five-door, four-seater, coming in 1.0 liter and 1.2 liter varieties, with 66 and 78 horsepower respectively. Both models are said to have fuel economy exceeding 47 mpg, with emissions of less than 120 g/km. Prices have not been announced.
“This vehicle segment, while important today and expected to be more so in the future, is extremely challenging,” said General Motors CEO Fritz Henderson last month. “It takes a special effort by everyone to bring a domestically produced small car to market in a cost-competitive and profitable way.” But Chevy expects that special effort to pay dividends over the long run, with the United States becoming increasingly urban and fuel costs expected to rise significantly once the global economic downturn subsides. It remains to be seen if US consumers are ready to make the transition from supersized vehicles to minicars.
The Spark will be marketed particularly towards trendy, younger, urbanites—putting it in direct competition diminutive yet hip offerings such as Smart ForTwo, Kia Soul and Scion, which may release a small car based on the Toyota iQ in the US.