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Detroit Auto Show: General Motors Gets Serious About Small Cars

DETROIT--Ford's Alan Mulally has gotten most of the glory for directing his company away from multiple platforms and towards "world cars." But General Motors is, somewhat more quietly, pursuing the same strategy. At the North American International Auto Show (NAIAS), it showed off both a hot hatch version of its forthcoming entry-level Aveo and a key compact, the Cruze.

The new small cars are part of GM's concentration on its core brands: Chevrolet, Buick, Cadillac and GMC Truck. There's no longer a Saturn division to represent the small car market--very much a traditional weakness for the Detroit-based automaker.

GM has almost as much riding on the Cruze as Ford has on the Focus. And according to Chuck Russell, its vehicle line director, the intent is to go after both Honda's Civic and Toyota's Corolla. "We made a decision early on that we wanted to beat the best," he said, "and that meant building a car that you could almost classify as a mid-size. We went for great proportion and shape, and moved the tires and wheels out to the corners as much as possible so we'd have a good-sized interior."

The Cruze, available in the U.S. in the late third quarter of 2010, will be sold in at least 60 countries, with minor modifications, said Russell. (The Europeans won't get as many airbags, and will also have different engine options, including a diesel.) In the U.S., the Cruze will be offered in LS, LT and LTZ trim, the last two with a turbocharged version of the 1.4-liter engine. Russell said he expects that 70 to 80 percent of all Cruzes will have the turbo, which he describes not as a way to build a pocket rocket but as part of a scheme to get maximum power from small displacement.

GM's surveys show Americans trending into compact and mid-sized cars from the big gas-guzzlers and SUVs that have dominated the market. "They're not moving down because they want cheaper cars, but because they don't want to pay high fuel costs anymore," he said.

The four-cylinder engine rules the world, so it will be no big challenge to slot the Cruze into foreign markets. In addition to Lordstown, Ohio, where a history of labor strife is being set aside, the Cruze will be snapped together in Korea, China, India and even Russia.

I sat in a Cruze and admired the high-quality interior materials. In that respect, it's a big leap up from the Cobalt, which the Cruze replaces. I might want more rear legroom, but the car otherwise seems competitive.

The Aveo is not a new small car in the lineup (it debuted in 2003), but Chevrolet plans to reinvigorate the brand. According to Charlie Mott, product and marketing manager, the new version being built in a joint venture with Daewoo is something new: "Instead of importing a vehicle designed and engineered abroad, we're starting from scratch to develop a car that benefits from our product development expertise--and shows off, for instance, the best of what our small car guys at Opel [GM in Europe] can do."

Mott said that GM did become very truck-centric for a while, but it always had core brands--Saturn, Oldsmobile, Pontiac, Buick, Cadillac--that were very car-oriented. Making money from very small cars is a big challenge for companies like GM, which are used to profit margins as large as the models they were producing. "We're now well positioned to have a car focus," said Mott.

The RS Concept Aveo GM showed in Detroit was resplendent in hot Boracay Blue paint (even the brake calipers got doused in it). Its "hot hatch" cues are not production-intent. This really will be an entry-level car, probably priced around $13,000 to $15,000. "We don't envision moving dramatically from the current price of the Aveo," Mott said. "For the car to be competitive, the value equation has to be there."

They shooed me off the RS Concept stand, so I didn't get a close look at car, but with 19-inch sport wheels, all manner of spoilers and fender flares, it does look pretty snazzy. Will that translate into sales in more than 100 countries? Let's wait for the production car.

The Aveo goes into production in 2011, alongside an even smaller Korean-made car, the Spark. The old GM would have considered tiny vehicles like the Spark little more than toys, so its quick evolution from show car to production is heartening.

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