Reader Question: Corvette… and Malibu?

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Here’s the latest reader question, along with my reply! 

Tom asks: Why can Chevrolet build this new unbelievable Corvette but fail (in my opinion) with the new Malibu ?

My reply: I’m not sure the Corvette is successful!

It’s an incredible performer – and value. No question. But does Chevy make money on the Corvette? The answer is . . . probably not. The Corvette has historically been Chevy’s “halo car” – an industry term for a car that attracts buyers to the brand, but not necessarily the car. People come to Chevy stores because they want to see a Corvette – are awed by the Corvette – and aspire to perhaps one day buy a Corvette.

But most of them drive away in something like a Malibu. And that’s how Chevy made money – even if Chevy actually didn’t make any selling Corvettes.

The Malibu isn’t a bad car, by the way.

The problem with the Malibu is that it’s a sedan in a market that has gone crossover. Even Toyota and Honda are having trouble selling sedans. The reason for that has to do with our goatee’d friend… Uncle.

People are strapped and cannot afford multiple vehicles – in part because of onerous taxes, registration and insurance costs –  so they look for a do-it-all vehicle. Crossovers have 2-3 times the cargo carrying capacity as a sedan of the same size, have more ground clearance and most are available with AWD – unlike most non-luxury sedans – and all of that makes them more versatile and practical than a sedan. They are family cars that can be commuter cars and snow day cars – etc.

On the other hand, there are two sedans that do sell well. The Chrysler 300 and Charger. Could it because they are larger – and offer large engines (and large trunks)? Probably so.

But such cars are rare  . . . because of Uncle.

Most American sedans were once upon a time like the 300 and Charger – i.e., big and big-engined and rear-wheel-drive. But these kinds of sedans don’t “comply” with federal gas mileage edicts – aka CAFE – and so almost the entire fleet of American sedans changed over to a FWD (and smaller/smaller engined) layout.

Which is in my opinion the main reason the Malibu failed.

. . .

Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!

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2 COMMENTS

  1. In general, sedans have failed because of the government distortions of the market. Eeeeeereeeeemmiiiiisoons and gas mileage laws as well as saaaaaaaaafety regulations have pushed transaction prices up by $5k minimum over the last 10 years. So called improvements have gimped throttle response, added weight to and homogenized styling of all vehicles. Because of the big costs, people can no longer buy multiple vehicles for multiple tasks. They are stuck with one. That plus low gas prices is selling more crossovers and fewere sedans.

    Since the Japanese companies build the best sedans, the Americans have given up on competing. That’s why Malibu, Impala, Fusion, taurus and Focus failed. The only successful sedan have been the Charger/300 sedans. They are RWD. Eric’s got a point.

  2. GM makes about $30K on the average with its truck/SUV line. It pays for the money losing EV’s. Now they’ve super-sized the Suburban, Tahoe and pickup for later 2020. Ford has pledged $11.5B for their new EV cars, probably a good thing since 25% of them that have put down $500 are from Ca.

    The EV things is crazy but it’s a typical govt./bureaucratic move. Only somebody from govt. thinks it’s a good thing to make EV’s that only exist because of the profits on IC vehicles. Idiots.

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