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GM shoots for higher price on new small car

When GM's new global small car hits the U.S. market in mid-2010, the company is expecting it to fetch a better price than Honda and Toyota get for their small cars.
GM New Models
Chevy's fuel-efficient Cruze is due out in 2010, and GM hopes it will replace revenue lost as the U.S. auto market shifted from trucks to cars.AP
/ Source: The Associated Press

When General Motors Corp.'s new global small car hits the U.S. market in mid-2010, the company is expecting it to fetch a better price than Honda and Toyota get for their small cars, GM executives said Monday.

The Chevrolet Cruze, officially unveiled Monday in Detroit on the eve of GM's 100th anniversary, is a big step up — inside, outside and in fuel economy — from its predecessor, the Chevrolet Cobalt.

GM is banking on a big step up in price, too, as it tries to make up for revenue lost when the U.S. market shifted rapidly from more profitable trucks and sport utility vehicles to more efficient smaller models.

GM wouldn't reveal the pricing of the Cruze, to be built in Lordstown, Ohio, but Chevrolet General Manager Ed Peper said GM needs to get more money per vehicle than its prime Japanese competitors, Honda Motor Co. and Toyota Motor Corp.

He predicted that car prices will rise in general because the vehicles have more features than in the past, including better fuel economy. The Chevrolet Malibu, GM's newest midsize entry, is selling for $4,200 more than the old model, he said.

"Value and price are offshoots of what consumers think about them, what they're willing to pay for the products," Peper said. "It's obviously in our best interest if people think more of our products, the more the value that we provide."

The Cruze will be larger than the current Cobalt, as well as the Toyota Corolla, Honda Civic and Ford Focus, yet GM claims it will get better gas mileage than all of them, around 40 miles per gallon with a 1.4-liter gasoline engine.

GM has several other engine and transmission combinations planned for the Cruze in the U.S. but would not specify them. In Europe the car will get 1.6- and 1.8-liter four-cylinder gas engines as well as a 2-liter turbo diesel.

Last month, buyers paid an average of $16,455 for Cobalts, but the Japanese competitors averaged substantially more. Honda got $19,184 on average for a Civic, while Toyota customers paid an average of $18,232 per Corolla, according to the automotive Web site.

Ed Welburn, GM's vice president of design, said the Cruze's sloped exterior styling and cockpit-style interior are important factors in moving it up the price ladder.

The Cruze interior is warm, he said, with soft, colored seat-cushion material on the dashboard. It has small chrome accents and other details.

"I believe that we have some very unique content and materials that are in the vehicle," Welburn said.

Also Monday, Peper said GM won't extend its offer of employee pricing for everyone after the deal ends this month.

GM announced the offer Aug. 19, then extended it early this month after seeing it boost slumping U.S. sales. GM's August sales still fell 20 percent from a year ago, but that was a smaller drop than Ford or Chrysler.

The company also announced that the Cadillac CTS will get a sport wagon model starting next year.

The five-passenger wagon will be built on the same platform as the Cadillac CTS sport sedan but provide 25 cubic feet of cargo space behind the rear seats. It's fuel efficiency is expected to be similar to the sport sedan's 26 mpg on the highway, GM said.