Image: George Tasker
Damian Dovarganes  /  ASSOCIATED PRESS
George Tasker , the top car salesman at Martin Chevrolet in Torrance, Calif., is looking forward to November when the new Malibu arrives in his showroom.
updated 8/20/2007 6:00:14 PM ET 2007-08-20T22:00:14

Just a few miles from Toyota’s U.S. sales and marketing headquarters, George Tasker hasn’t had much luck selling mid-sized Chevrolets against Toyota’s Camry, the most popular car in America.

But Tasker, the top salesman at Martin Chevrolet in Torrance, Calif., is looking forward to November when the new Malibu arrives in his showroom.

“It’s been difficult for a while,” said Tasker, whose dealership near Los Angeles is in the middle of a market that’s a Japanese stronghold. “We look forward to the battle, actually, with a product that we feel is going to be strongly competitive with their vehicle.”

The sleek-looking Malibu is a critical product for General Motors Corp. as U.S. automakers try to woo back customers they lost by neglecting the mid-sized car category and focusing too much on high-profit trucks and sport utility vehicles. The Malibu and the new 2008 Honda Accord are signs of renewed competition in the largest segment of the U.S. car market.

That means consumers will see more standard features, higher quality cars, stable if not falling prices, and models coming out at a faster pace, said Erich Merkle, vice president of forecasting for auto consulting company IRN Inc. in Grand Rapids.

“They’re all trying to pack them with features,” he said. “It’s incredibly competitive. That competition is just providing greater value to the consumer. Over the next two years, you’re going to be getting more for less.”

To Merkle and others, the Malibu is Detroit’s best shot at busting up control of the mid-sized segment by Toyota Motor Corp. and Honda Motor Co. The new car has a modern, rounded look and an array of engines and transmissions that GM says are far smoother than the Camry’s with comparable or better fuel economy. Merkle says the fit and finish, as well as the interior, are gorgeous.

“We simply see it as the best chance we’ve had in years to take on the two dominant Asian players,” Bob Lutz, GM’s vice chairman of global product development, said in an e-mail to the Associated Press. “It’s the best mid-market front-wheel-drive we’ve ever done.”

It wasn’t that long ago that Detroit dominated in mid-sized cars. In 1990, U.S.-based automakers controlled almost 70 percent of the market, thanks in large part to the popularity of the Ford Taurus, according to data collected by Ward’s Automotive Group. But since then, Honda, Toyota and Nissan Motor Co. have gradually increased market share, overtaking the Detroit Three in 2005 with 47 percent of the market. Detroit’s share dropped to just under 45 percent that year and has continued to decline.

The Camry became the top-selling car in the U.S. in 1997 and has held the honor every year since except for 2001, when Honda’s Accord was the winner. The last U.S.-brand car to win the segment was the Taurus in 1996.

U.S. consumers love the Camry, buying 448,445 of them last year and 282,044 through July of this year due largely to its reputation for quality and reliability.

The Camry, revamped for the 2007 model year, controls more than 16 percent of the mid-sized U.S. car market, according to Ward’s. The Accord is second with 354,441 sales last year and 219,488 through July of this year for about 13 percent of the market. The Chevrolet Impala is the top-selling mid-sized car from the Detroit Three with 289,868 sold last year and 201,612 sales through July of this year.

In contrast, only 163,853 Malibus were sold last year and 76,816 so far this year.

“The current generation Malibu isn’t really a handsome-looking vehicle,” said Merkle. He doesn’t think the new version will be able to lure many buyers from the Japanese. The likely losers are the Chrysler Sebring and Dodge Avenger, he said.

But Frank Klegon, Chrysler executive vice president of product development, said the cars, both new in the 2007 model year, are doing better in retail sales than their predecessors. Competition, however, may make the company update them soon.

“We may want to do some things that give it little updates, little tweaks, whether exterior or interior, in a window of time that keeps it very fresh,” Klegon said.

Chrysler may build more vehicles off the Sebring and Avenger underpinnings, which could take sales from Camry and Accord, Klegon said. A smaller crossover vehicle and perhaps other mid-sized models are expected from Chrysler.

The Detroit Three have to overcome quality problems of the past that have turned people off to their brands and sent them to the Japanese, said Merkle.

Chevrolet General Manager Ed Peper said GM has raised the quality standard on the new Malibu.

“We are definitely aiming at Toyota,” he said.

It’s a message Toyota has heard before. Still, Robert Zeinstra, the company’s large car manager, said it won’t stand still even though the new Camry was launched in March of 2006. He would not reveal when the car would be updated, but said Toyota continually listens to customers.

“We do obviously try to keep the Camry fresh,” Zeinstra said.

Honda, which soon will unveil its new Accord sedan, also has done a lot of work to keep the car updated, said spokesman Chuck Schifsky. He wouldn’t give details.

“We feel we’ve made the necessary changes to keep the Accord not only competitive but in its position as one of the leaders in the mid-sized segment,” he said.

Because Toyota and Honda are so well entrenched, the domestic nameplates will have to market differently than in the past, said Mark McCready, vice president of market planning and pricing for the Web site.

“Their biggest challenge is to get people to come in and drive it before they go to a Toyota dealership and buy a Camry,” he said.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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