Chevrolet Volt
Gary Cameron  /  Reuters
GM Vice Chairman Bob Lutz is in the passenger seat as the automaker introduces the Chevrolet Volt battery-powered concept car. The car is years away from production.
By
msnbc.com
updated 1/8/2007 1:11:14 PM ET 2007-01-08T18:11:14

After an impressive first day at the auto industry's biggest trade show, General Motors Chief Executive Rick Wagoner can afford a little bravado.

Speaking with reporters here in Detroit Sunday, Wagoner said that this year he expects the world’s largest automaker to sell more vehicles this year domestically than the 3 million it sold in 2006.

The prediction seems like a tall order, given that U.S. vehicle sales are projected to be flat this year and domestic automakers have been losing share to Asian rivals led by Toyota and Honda. But the struggling U.S. automaker has earned some bragging rights.

On the first day of the 2007 North American International Auto Show, GM swept the car and truck of the year honors and wowed critics with its Chevrolet Volt sedan concept, which boasts a battery-powered electric motor that will be able to run for up to 40 city miles on a single charge.

The Volt, which is years away from market and will require significant advances in battery technology, is designed to run on little or no gasoline, unlike hybrids currently on the market. That will be music to the ears of environmentalists and consumers growing sensitive to  escalating pump prices and concerns about global warming and overdependence on imported oil.

In the awards that opened the show, top honors went to GM's new Saturn Aura and its  redesigned 2007 Chevrolet Silverado pickup. It was the second time in the 14-year history of the awards, determined by a vote of automotive writers, that a single manufacturer swept the two categories. Honda achieved the feat last year.

Taken together, the Volt’s debut and the car and truck awards signal that GM is beginning to reap the benefits of a turnaround plan that includes massive job cuts and plant closures, says  Aaron Bragman, an automotive analyst with Global Insight, a consulting company.

Bragman notes that the Aura’s accolade is especially significant, given that it beat out the  Toyota Camry — the top-selling car in the United States for eight of the past nine years. In recent years, GM has worked to revamp its Saturn brand, which has suffered from declining sales and never made a profit.

“For Saturn to win an award like that is extremely impressive,” he said. “It’s a huge feather in GM’s cap, and they’re bound to use that in their advertising for the Aura.”

Analysts say GM is the front-runner in the race among the Big Three U.S. automakers to restructure their businesses in the face of declining vehicle sales and high costs.

And given that Japan’s Honda won both the car and truck titles last year for its Civic and Ridgeline models, Sunday’s awards show GM is closing the gap with its Asian rivals.

The outlook isn’t as bright for Ford and Chrysler.

Chrysler, the U.S. unit of Germany's DaimlerChrysler, recorded a $1.3 billion loss for 2006 and saw only 1 percent sales growth for the year. Analysts expect layoff and plant closures, although Chrysler’s CEO Tom LaSorda said Sunday the automaker has no plans to cut as many people as Ford and GM.

More than 70,000 GM and Ford workers accepted buyout or early retirement offers last year under the restructuring programs of the two companies.

GM’s Volt is part of the automaker’s strategy to “electrify” the car. GM wants to build vehicles that can be powered by electricity that comes from a variety of renewable energy sources, allowing drivers to move away from gasoline dependence.

The Volt is a battery-powered, four-passenger vehicle that will use GM’s next-generation electric propulsion system, called E-flex. It can be fully charged by plugging it into a standard, 110-volt outlet for about six hours. When the lithium-ion battery is fully charged, it has a range of 40 miles.

GM’s product chief Bob Lutz said that 78 percent of Americans live within 20 miles of work, so “you may never need to buy gasoline during the lifetime of the vehicle.”

Electric cars have the potential to overtake popular hybrid vehicles, which run on a gas-powered engine and an electric motor, analysts say, as an electric car is less complex than the gas-electric hybrids now on the market. What’s more, hybrid vehicle sales are wavering in the face of lower gas prices and the expiration of a tax credit that has helped fuel sales, particularly of Toyota’s Prius.

Unlike hybrid vehicles driven by electricity and fuel, the Volt’s engine serves only to refresh the car’s battery, which is the only source of locomotion. The turbocharged engine can get about 50 miles per gallon when producing electricity to run the car.

The E-flex system’s engine can run on gasoline or alternative fuels such as E85, a fuel blend of 85 percent ethanol and 15 percent gasoline, or biodiesel. Down the road, it will be possible for it to use fuel cells.

But the Volt faces hurdles. Most critically, its battery technology must be improved, making the car’s appearance in showrooms unlikely before 2010 at the earliest.

GM has no date for the Volt’s release, but officials said they are quickly advancing the required battery technology.

The Associated Press and Reuters contributed to this story.

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