Daewoo to save GM?

OK, probably not, but Daewoo-built Chevy Aveo controls a handsome 40% of the US sub-compact car market! And, the share has been growing! That’s good news for a declining company in a growing niche market.

In this Washington Post article, analysts are expecting the market for sub-compacts to grow from 1 to 2% (185k units in 2005 to over 360k in 2010) of the overall US car market.

It will be interesting to see if the Aveo can hold its own against newcomer from the other Big Three, Toyota, Honda and Nissan. Toyota’s Yaris is already available in Canada (where I see them often), Honda’s Jazz/Fit will be debuted for North America at Detroit in January, and Nissan will introduce either the Tilda or another sub-compact soon. To battle the newcomers, GM will introduce a slightly larger and more refined Aveo for 2006.

What’s notable is that Chrysler and Ford have no intentions of joining the game. The worst part is these makes have very good product for this segment. Chrysler has the Mitsubishi Colt/Smart ForFour that could be rebadged. Ford has the Fiesta. I’ve heard nothing about either company bringing them to the US.

Who drives these cars? that Aveo is a piece.

Who wakes up and says “eeww, I wanna go buy one of those cute little Aveos today”? What do they start at (like $9,000ish right?)? and what are they worth once you drive them off the lot?

seems like a waste of sheet metal to me.

correct me if I’m wrong…

hey copyboy,
you should check out a place called “Wallmart”. Might answer your question.

I think small cars are making inroads in the marketplace, but these econoboxes aren’t really driving the trend. Aveos and all of the small American cars before it (Geo, Festiva, Aspire) are just really crappy cars. If you want an inexpensive car, buy a used Civic or something. You’ll get a better, more reliable, better looking car that could still be under warranty.

The small cars that make people want small cars are the Minis, A3’s, and others that don’t see size as a feature to be removed to save money. People buy these cars because they’re as nice and attractive as their larger brethren.


Back to the original post, it isn’t very likely that GM makes much, if any, money on the Aveo. A lot of these types of cars are loss leaders meant to attract people to a brand. So it might be that if Chevy sells too many Aveos, it could increase their losses.

Like you said, Aveo is holding 40% of the market because there isn’t much of a choice of sub-compact cars in the US currently. Honda, toyota and Nissan will kill it in no time.

The minis and A3 aren’t quite the same class as sub-compacts. People with money get those things, not people who are concerned with fuel economy or price. For the money you can get bigger cars, that’s why there is the impression that hatchbacks will never do well in the US. With the right kind of hatchbacks, I think people will start to think differently.

I agree with the article I posted, the Aveo is far from the crap that made “hatchback” a bad word. I looked over the Mk I Yaris and Aveo when they debuted in Canada a couple years ago. The Yaris I know wins on fuel economy and reliability, but the interiors were fairly close. Both featured alot of plastic, as expected, but the Aveo had a nice little design flair that the lumpy Toyota interior lacked. Maybe Italdesign was still handling the Daewoo brief when GM bought them. Both cars were well screwed together too. The Koreans have made great strides in quality in the last five years.

In further defence of the Aveo, it has had some competition in the US. Hyundai Accent, Kia Rio, Scion xA and xB and Toyota Echo are all in the same category and price range. That’s 40% with Toyota in the game already!

Last, these are not loss-leaders. The margins are alot lower than a large vehicle, but what a small car lacks in margin, they can gain in volume. SUVs often have $5-6k margins, an Aveo probably has $800. Moreover, the industry is trying to figure out how to sell cars with oil at $60 a barrel (hence commercials advertising “300 fuel efficient horsepower”). There first instinct is to take what works from other markets and bring them over.

There’s nothing that can save GM, or Ford, they will both be out of business within 10 years. GM is the biggest carmaker in China at present, which may prolong their life, but they simply make inferior products to the Japanese. My question is - how have they been so unreactive over the past THIRTY YEARS, There is no way you can tell me that they couldn’t, if they wanted to, build a car as well as the Japanese, copy them if need be. Part of it is the unions - (everyone loses when unions have too much power - look at public education). Even with the horrible drag the unions put on I still think management is to blame. What was management doing? It’s too late for GM and Ford to change, they’re market share has already begun to erode exponentially, it’s over.

Sorry to be so negative, I just quit smoking, but this is really a sad story, which could have been prevented - the executives at ford and gm should be ashamed of themselves for being such idiots asleep at the wheel.

The saddest part is that the truly decent divisons, Volvo and Saab may go under with them, talk about a waste.

I agree with “It’s Over”.

You should read the article on core77 under the employment topic post entitled “when will it end”

Most talented and smart designers are leaving them in large numbers heading for foreign manufacturers. I think giving discounts on cars to everyone was a dumb move because it helped to lower the value of their cars.

So sad but the American car dream is soon to be a thing of the past.