Image: Chevrolet Matiz
Axel Wierdemann  /  AFP-Getty Images file
General Motors will be showing off vehicles based on the Chevrolet Matiz, which is sold in Europe and Asia.
updated 3/30/2007 8:55:26 PM ET 2007-03-31T00:55:26

General Motors Corp. GM’s top global product planner said Friday the company is taking a serious look at bringing low-cost mini cars to the U.S. market capable of achieving as high as 50 miles per gallon of gasoline and breaking ground in a virtually nonexistent segment in the world’s biggest auto market.

GM Group Vice President John Smith said the auto maker is still in very early stages of investigating the U.S. market’s appetite for mini cars. Such vehicles are significantly smaller than sub-compact cars currently sold in the region by several players. GM sells a Chevrolet Aveo sub-compact car in the U.S., but nothing smaller.

“The honest answer is, I don’t know yet how serious we are,” Smith said, referring to the mini car segment.

The auto maker plans to show three different models of mini cars Wednesday at the New York auto show. In coming months GM will collect research data to gauge consumer interest through an online voting campaign at www.vote4chevrolet.com.

The vehicles to be shown in New York are based on the tiny Chevrolet Matiz and Spark that are sold in several markets, including Europe and Asia, and in hot demand internationally due to space constraints and high gasoline prices. Smith admits that in past customer studies in the U.S “there hasn’t been a whole lot of hand-raising for things as small of the Matiz,” partially because Americans, who pay relatively little for gasoline compared with drivers in other countries, prefer bigger vehicles.

While the auto maker is seeing an uptick in demand for small cars in the U.S. due to increasing energy concerns, there is no hard evidence that buyers will flock to mini cars unless gas prices take a serious upward hike.

“Our internal forecast shows gas at $2.50 a gallon for quite some time to come,” Smith said, noting that stability in that price range won’t seriously change consumer demand or inspire “a seismic shift in consumption habits.”

There currently is not a mini car sold in the U.S., but DaimlerChrysler AG will launch its Smart micro-car brand here next year in an effort to create a niche market. BMW AG does sell a model called the Mini Cooper, but that vehicle is actually much larger than actual mini cars. Several auto makers sell mini cars around the globe, but there is little indication a flood of tiny vehicles aimed at U.S. buyers will be launched in coming years.

“There’s an age-old debate in our business of responding to consumers or presenting them with a case they haven’t thought about,” Smith said. In the past, GM has been penalized by American car buyers for being behind in several emerging segments, such as hybrid vehicles, crossover vehicles and minivans.

If GM were to pull the trigger on mini cars for the U.S., Smith said they likely would be priced at a very affordable range and be capable of achieving as much as 45 miles per gallon to 50 miles per gallon. He declined to give an absolute price range, but said the base price would be low enough to allow a bulk of the buyers to purchase upgraded vehicle features, which is a way for auto makers to boost profitability to an otherwise low-margin product line.

In addition to potential profits, success of such vehicles could give the company needed sales on America’s coasts and major cities where the company has seen some decline in demand for its products.

In the mini car’s case, GM has the advantage of relying on success in other global markets, where mini cars are sold in swarms, to shoulder the company’s potential foray into a U.S. mini-car sector that doesn’t currently exist. Having existing design, production and development centers will lower the cost of a U.S. mini-car program and the amount of time it would take to launch a vehicle.

Smith said GM is one year into a multi-year development program of a new generation of global mini cars that could be sold in the U.S. The vehicles are being created by one of GM’s global product development groups, located in South Korea, and will be built in several low-cost markets, including Korea, before the end of the decade.

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