Chevrolet readies the 'Matchbox' cars 

By Karl Greenberg
MediaPost Publications

(August 7, 2010) General Motors' fate rests on Chevrolet like a pallet of hay on the flatbed of a Silverado truck. The automaker's core division, which gets well over $600 million of the $1.5 billion-plus marketing budget, has shifted from low gear to at least third in recent months, with strong sales of Equinox, Malibu — and now, the Silverado Heavy Duty.

But if ever there was a year in which Chevrolet — and by extension new agency Goodby, Silverstein and Partners — must make good on the car side of the equation, it's the 2011/12 model years.

That's when Chevrolet, whose sales are up 27 percent year-to-date, launches three critical vehicles: one that puts the division in the nascent electric-car field, and two that must prove to the auto-buying public that Chevrolet is for real in the compact and subcompact segments, two regions in which it has languished for many moons.

The compact region of the market — the second-largest, which constitutes over 15 percent of total auto sales — has been dominated for years by Honda Civic and Toyota Corolla, and Ford's Focus has been the domestic player with teeth in the segment.

But this fall, Chevrolet will launch the Cruze in that crowded region. And next year, out comes a new version of Aveo, which started life in 2004 as a GM-badged Daewoo, fruit of General Motors' relationship with the Korean company. But the new Aveo — a subcompact to compete with vehicles like Honda Fit, Toyota Yaris, Nissan Versa and Ford's Fiesta is like Cruze, a GM-designed global car.

Jim Campbell, VP marketing for the division, says a newly launched raft of ads is based on a popular 70-second Web video by Campbell-Ewald (which will henceforth be doing CRM and dealer group ads). The video shows a truck towing a trailer. The truck comes apart like origami to reveal the underpinnings of the vehicle.

"We had a really good response to that animation, so we made 30- and 15-second versions." He says two other commercials for the Silverado HD begin airing in the next couple of weeks. These show the truck taking on very steep terrain. Campbell says Chevy is putting so much effort into HD partly because it serves as a halo vehicle for the much bigger-selling, full-sized Silverado pickup.

Campbell says Cruze, launching next month, benefits from being the new kid on the block. "We have a window of time here: Honda pushed back the launch of their new vehicle about six months; Corolla, we don't know when they are launching but it's at least a year out.

Then there is Ford Focus, which will be coming out sometime in the first quarter, and [Hyundai] Elantra in the first or second quarter," he says. "So there's a lot of activity coming, but we have this window in the fall and part of spring where it's us against the older models."

Chevrolet talking points on Cruze will be safety, fuel efficiency, premium appointments, ride handling and durability. And thw fact that the car is global. The Chevy Cruze Web site, for instance, pitches the vehicle as something of a world traveler, getting torturous tests in places like Arabia, Scandinavia, Thailand, Venezuela and the Sahara.

The plan will be to talk about the vehicle's safety appointments -- with 10 airbags standard versus the segment's usual 6. Campbell says that in the 60 countries in which the vehicle has been sold already, it has earned the highest safety rating in all of them. The company is launching an Eco version of the car later this year that gets 40 mpg. "The Eco Cruze may be as high as 20% of the business," he says.

"The compact segment really has two groups of buyers: the entry-level customers and young families, and then folks whose kids have moved out of the house, so sometimes people come into the segment who are downsizing from mid-sized cars. Campbell says sales data on recent Chevrolet vehicles suggest Cruze will conquest non-GM brands.

"Equinox [Chevrolet's compact crossover] is conquesting very well; over 40 percent of people who buy Equinox are new to GM." He says the same is true for Chevy's Camaro, a convertible version of which debuts next year.

The Traverse mid-sized crossover led its segment last year and is "a few thousand units behind Edge this year," he says.