http://www.detnews.com/apps/pbcs.dll/article?AID=/20080103/AUTO01/801030321/1148Too many buyers for Malibu
Dealers struggle to get new GM product on the lot, worry about how long buyers will be willing to wait.
Sharon Terlep / The Detroit News
General Motors Corp. has finally built a family sedan Americans crave, yet dealers across the country are having a hard time getting the cars on their lots.
It likely will be spring before GM is able to build enough of the new Chevrolet Malibus to meet demand, the automaker's sales chief said Wednesday. Meanwhile, thousands of dealers are without a made-over Malibu on their lots.
GM says the shortage is a good problem to have -- and several automotive analysts agree.
But the automaker is walking a fine line in the utilitarian and highly competitive midsize sedan segment, in which consumers have scores of options and limited patience.
The new Malibus "are turning faster and more prolifically than we anticipated. They're selling well in Southern California. They're selling well in Flint," Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, said Wednesday. "We don't have anywhere near the availability we'd need for peak (sales) performance."
GM last month ramped up Malibu production. The cars are built at GM's Orion factory, as well as at the Fairfax plant in Kansas City, Kan., where the last generation Malibu was built.
LaNeve said GM anticipated big demand for the new Malibu, but not to the extent the automaker has seen since the car hit showrooms Nov. 1.
GM sold about 7,000 Malibus in November, roughly the same number as last year. December sales are expected to be higher now that more dealers have the cars in supply.
Analysts say it will likely take several months to truly gauge Malibu's success.
The Malibu's dramatic overhaul has been a hit with auto critics, and consumers appear to be responding. GM is looking to Malibu to steal customers from the top-selling Toyota Camry and Honda Accord.
"I have three on the lot right now, and if I had 20 I'd be happy," said Guy Drose, sales manager of Raymond Chevrolet in Antioch, Ill. "People are asking for options on the vehicles that we don't have on the lot at the moment.
"Hopefully, they'll see the value in the car and wait."
Competing with Accord and Camry
Like in many industries, having a car that's hard to get can help generate buzz and push up the selling price -- because dealers don't need incentives to draw in customers.
GM has intentionally limited the supply of its high-end Buick Enclave crossover SUV, introduced last year, and the strategy appears to be working.
But the Malibu is far from a niche or luxury car.
The midsize car segment is the biggest and most crowded in the U.S. vehicle segment, with sales topping 3.2 million through November. Honda rolled out a sporty new Accord last year and Toyota's recently refreshed Camry has done well.
"You walk a fine line between not having product in the showrooms to sell and wanting that product to be one of those where people are saying, 'Hey, how did you get your Malibu?' " Rebecca Lindland, an industry analyst with Global Insight in Lexington, Mass. "For a really long time, that has been the least of GM's problems.
"But you can't test their patience for too long."
Ideally, a new vehicle should be in full supply just as the introductory ad blitz is under way, which in the case of the Malibu is right now, said Edmunds.com Senior Analyst Jesse Toprak.
"If they don't have the inventory that's going to be necessary to meet demand, that may cause some lost sales," Toprak said.
As long as GM manages to bring supply in line with demand within the next few months, he said, the automaker should do well.
"If the distribution timeline stretches beyond that," he said, "there could be problems."
