2016 Chevrolet Malibu Represents A Big Opportunity For GM

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GM is planning to launch the 2016 version of Chevrolet’s Malibu. The car will feature much more dynamic and sophisticated styling, but will also be about 300 pounds lighter than the current model, which should improve its fuel-efficiency and handling.

The car is important to GM for two specific reasons:  First, if the Malibu were to be successful, it would enter the midsize sedan segment, the largest new-car segment in the U.S., and one in which the company has been previously outdone by a number of foreign car brands such as Hyundai, Honda, and Toyota. The model’s success would provide considerable boost to the company’s investors because if the company can increase the competitiveness of its passenger cars, it would improve sales and profits considerably.

Second, the mid-size sedan segment is the largest-volume selling segment in the U.S. automotive industry. Consequently, it represents perhaps the biggest opportunity for GM to increase its overall market share. Moreover, this market share would come at the direct expense of an import car brand like Honda and Toyota, which have historically been much stronger in this category.

The midsize sedan segment is the most competitive segment in the U.S. automotive market. The competitors to Chevrolet’s Malibu are all well established and are well recognized brand names: Toyota’s Camry, Honda’s Accord, Nissan’s Altima, and Ford’s Fusion. In order to be competitive, GM will have to produce an extremely strong product. Moreover, there are other obstacles to GM in improving its sales in the segment at a strong clip: in 2014, Malibu’s sales were down 7 percent, which was the only decline among the eight best sellers in the segment.

However, GM’s recent success with the Chevrolet Impala might give them some hope. In trying to increase the sales of its cars from retail buyers, GM had to rebrand the Chevrolet Impala as a key point about the fleets business is that, if done right, selling cars to fleets can serve the purpose of good marketing, exposing people who might not otherwise be interested to try your brand. The Chevy Impala was previously only known as a successful fleet vehicle but a redesigned version of the car became the first domestically manufactured car in over two decades to win Consumer Reports’ top ranking for a large sedan. 

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