Chevy Dealers Not Surprised by Cruze Cancellation
AUSTINTOWN, Ohio — Employees at Greenwood Chevrolet were as shocked as anyone to learn Monday morning that production at the General Motors Lordstown Complex would be halted March 1. But the decision by GM to kill the Cruze, as well as the Impala and Volt, was no real surprise, said Greg Greenwood.
“[It has] nothing to do with the Cruze. The Cruze is an amazingly well built car, one of the best cars we’ve ever built locally,” the dealership owner said. “But sedans as a whole are just not in American cultural favor right now.”
As SUVs, crossovers and full-size trucks become more popular among buyers, the market is moving away from passenger cars, he said. Whether the shift is driven by utility, fuel economy or “relatively low fuel prices,” Greenwood said he isn’t sure, but consumers are “voting with their pocketbook.”
GM will also end U.S. sales of the Cadillac XTS and Buick LaCrosse after production ends in March, the company announced. After mid-2019, U.S. sales of the Cadillac CT6 will end, but will continue in China.
Sedan sales for GM in the Chicago region, which includes northeastern Ohio, are down 33% for the year, Greenwood said. “We would be down more than that, probably closer to 50% on the Chevy Cruze side of things,” despite the popularity of the Cruze as a lease car, he said. And with other manufacturers like Ford Motor Co. paring down their passenger car lines, GM “seems to be trying to get ahead of that as a company while things are still relatively good economically,” he said.
The Cruze was once GM’s most popular vehicle.
“There was a time when you could probably have a standalone dealership in this area that did nothing but sell Chevy Cruzes,” Greenwood said. “That would have a been a few years ago.”
Diane Sauer, president and owner of Diane Sauer Chevrolet Inc., Warren, echoes that sentiment. Customers in Warren who want a small car trend toward the Cruze as opposed to sedans like the Impala or smaller passenger cars like the Chevrolet Spark or Sonic, she said. Sauer always stocked more Cruzes than other Chevy sedans at her dealership, she said.
“When we first got the Cruze at the [Lordstown] plant, it was the right product to be there,” she said. “It shows how quickly things can change in this business.”
In March 2017, the Cruze was named one of the Top Picks of 2017 as the best compact car by Consumer Reports. Cars were chosen based on ratings from the publication on reliability, owner satisfaction, safety and road-test performance. In Oct. 2016, it was named among the 10 most reliable cars by Consumer Reports.
In June of that year, J.D. Power ranked the Cruze No. 2 in its list of top compact cars in the country behind the Kia Forte. And in July, J.D. Power ranked the Cruze fifth among compact cars in its annual Automotive Performance, Execution and Layout report.
But well before the start of this year, Cruze sales were already enduring double-digit percentage drops. In February, Cruze sales dropped 45.6%, it’s fourth consecutive month decrease in year-over-year sales. In March, Cruze sales were down 16.2% year-over-year, and in July, GM reported a 26.2% year-over-year decline for the second quarter.
While year-over-year sales of the Cruze at Diane Sauer Chevrolet are down by about two-thirds, Sauer said she was surprised that the Cruze was the passenger car to be cut.
“Given current consumer preferences, we had too many small cars in our models to choose from. I was surprised that the Cruze was the one to go,” she said. “It has the best value of the products that it’s being compared to. It’s the best small car that GM makes without a doubt.”
While the Impala is “a great car,” it didn’t sell, she said. “We didn’t have huge amounts of the Impala or the Volt. Just a handful of Impalas at any given time.”
Incentive structures have made SUVs more attractive to buyers because they offer more value on a lease payment than a passenger car. “But incentives are driven by consumer preference,” Sauer said.
The versatility of an SUV makes it easier to load and unload, which is a benefit to families, particularly those with kids who play sports, she said. Since SUVs sit a little higher than cars, older customers like them because they are easier to get into. Safety on the road is also a factor, she said.
“In a climate like this, [customers] feel safer with an all-wheel drive vehicle,” she said.
Dealerships have been adapting to the changing market for “a number of years,” Greenwood noted. Inventory at this dealership reflects the greater popularity of larger vehicles and is balanced to what customers want, he said. To that end, the dealership will be fine, but opportunities to own a Lordstown-built Cruze will soon be running out.
“We’re going to have a lot of great offerings for a lot of folks,” he said. “Unfortunately, when we sell our final Chevy Cruze, when they do run that line out, we simply won’t be offering a small sedan anymore. At least, not in that line.”
For the longtime GM customers who want a small sedan, “they’ll be well protected and there will be a lot of great offers and a lot of great models for them to choose from to be able to stay in the GM family,” Greenwood noted.
“There’s still the Sonic and the Spark,” Sauer added.
As for the future, dealers are hopeful that negotiations between the UAW Local 1112 and GM will result in a new product for GM Lordstown.
“Fifteen-hundred people losing their job is not good,” Sauer said. “GM has made recent investments in that plant. So I’m hopeful that they’re going to put another product in there.”
“I have a lot of hope that this GM plant is not done,” added Greenwood. “It’s too new of a plant. It’s got a great location, it means a lot to Ohio.”
Sauer and Greenwood commended the workers at the Lordstown complex and how they have supported our community over the years.
“Whether it be United Way donations or the Care and Share [food distribution] program that they do every year, these folks are a critical part of our community,” Greenwood said. “And we need to be thinking about them today and looking for any way we can to continue to support them.”
“We stand with our friends and colleagues at the Lordstown Plant and the UAW 1112 and hope that the negotiations in the coming year will result in a new product for the Lordstown plant,” said Alexa Sweeney Blackann, vice president of Sweeney Chevrolet Buck GMC in Boardman. “GM has been clear that it isn’t a permanent closure.”
Despite the announced ending of the Cruze, one of the most popular cars at the Boardman dealership, she said Sweeney will continue to focus on serving the community.
“We are proud of our 97-year legacy in the [Mahoning] Valley and we have served our community through many changes,” she said. “We will continue to serve this Valley in the future.”
Pictured: Greg Greenwood, owner of Greenwood Chevrolet, said the decision to end production of the Cruze stems from buyers’ trending toward trucks and SUVs.
GM to Close Lordstown Plant In March
Inside Union Hall, GM Announcement ‘A shot in the Gut’
Amid GM Fallout, Leaders Focus on Next Steps
Workers Face Uncertainty After GM Decision
Chevy Dealers Not Surprised by Cruze Cancellation
Brown Calls GM Decision ‘Corporate Greed’
Ryan on Plant Closing: ‘New Black Monday’
Read Full Text of GM Closings Announcement
Ryan Wants Congressional Hearing on GM Tax Windfall
Copyright 2024 The Business Journal, Youngstown, Ohio.