GM’s Decision To Kill The Cruze In North America Is Quite Puzzling

It’s finally happened: the last remaining American automaker is bailing on compact passenger sedans – at least for the foreseeable future.

While its long been rumored that a number of GM vehicles were on the chopping block, one of the biggest surprises about the company’s recent announcement was the death of the Chevrolet Cruze in North America.

The Cruze was never as successful as the Honda Civic or Toyota Corolla, but nevertheless consumers bought lots of them. Thanks to the model’s spaciousness and affordable $16,975 base price, people could easily overlook the fact that the car wasn’t necessarily best-in-class.

Carsalesbase data shows Chevrolet sold 184,751 Cruzes in the United States last year, and that’s a significant number even if it trails the 377,286 Civics and 308,695 Corollas that were sold in 2017. The model also outperformed the Ford Focus, which managed to sell 158,385 units last year.

The number is large enough that the Cruze outsold the whole entire Oldsmobile lineup in 2002 as the brand was inching closer to being a memory. The model also eclipsed the 178,300 Pontiacs that were sold in 2009 before that brand, too, was handed a ‘death’ penalty.

While it’s easy to say consumers want crossovers instead of cars, a quick look at the sales chart shows the Cruze outsold the Trax by more than 100,000 units in the United States in 2017. Of course, that particular crossover starts at $21,300 and is getting pretty long-in-tooth, but still…

This leads us to an issue that a number of automakers will soon be facing: a lack of affordable models. When Dodge killed the Dart, the brand’s entry-level model became the aging Journey, which cost thousands of dollars more. The same thing happened at Chrysler, where the brand’s entry-level product is now the Pacifica that starts at $26,995.

Not that long ago, affordable sedans were seen as stepping stones to get people into the Ford, GM or FCA family. While they might be buying an affordable sedan today, the hope was that buyers would remain loyal to the brand and become lifelong customers who would eventually return to purchase more expensive products in the future.

Of course, brand loyalty is finicky and automakers have to balance demand against the pressures of building affordable sedans in the United States.  There’s also the chance this could only be temporary as GM has plans for an assortment of new electric vehicles including a “low roof car.” Right now, though, traditional sedans by U.S. automakers are becoming extinct – and fast. Makes you wonder what’ll happen when people get bored of SUVs though, doesn’t it?

  • NoMan2015

    Also odd is the fact that they JUST facelifted it. Will the facelifted version even be out by the time production ends? If so, it will have existed for what…6 months? Money (not) well spent on those design efforts…

  • Matthijs

    Cheaper cars aren’t filling the company’s pockets and since Opel is out of GM it is even harder

  • MarkoS

    GM killing itself as usual. Every time the company shows promise, it runs back to its old ways. The company is to large and corporate heavy, it simply has no interest in automobiles other than the occasional flourish. Any business ran this way tops out and takes a dive.

    • Thetruthísntalwayspopular

      They are doing it to future proof the company and to prevent a repeat of 2008.

      • diesel_vdub

        If they were really concerned with the future of the company and preventing a repeat of 2008, they’d take everyone in the organization that makes over $100k and slash their salaries by 20%. That would have a more positive impact on the financials, employee moral, and public good will than putting 15k + people out of work and shutting down 5 manufacturing facilities.

        • Thetruthísntalwayspopular

          Yeah, you realise they ARE actually doing that right? 25% of executives have been asked to take packages. A quarter of the white collar upper management. So while it hurts at a manufacturing level, it’s hurting just as much in upper management. How do I know this? because I have 4 friends working for GM all got asked to leave. 2 have taken a package and 2 are waiting to see what happens.

          • diesel_vdub

            I realize they are cutting white and blue collar staff, but when is Mary Barra cutting her $22 million per year compensation to help the future of the company? What about the compensation of other top executives that have base salaries of over $1million dollars? Cuts need to happen at all levels and the executives are the ones that can easily afford to take a cut is compensation with little to no affect in lifestyle when asking the low level employees to take cuts or lose jobs.

            I do 100% agree with your last statement, GM did a horrible job communicating this to the public. They’ve also been unclear whether the CT6 or Cruze, which are produced in other plants around the world are being axed, simply removed from the US market, or will be imported in limited numbers.

          • Thetruthísntalwayspopular

            I agree. However the way they will spin it is due to her announcements, the share price went up (which it did), thus she will be considered deserving of her salary in the minds of investors. But yeh, it would be very symbolic if she made an announcement that the entire board would be taking a pay cut until the EV’s come online.

            The sad part is, when you are at the mercy of share prices and investors, this is always going to happen. BMW will never have this issue due to being privately owned for the most part.

        • MarketAndChurch

          Yeah but why keep those 5 plants running, producing cars in markets that will shrink more next year than they did this year? This year was even worse than last year, and last year was pretty bad compared to 2016. At what point in taking a loss will you come to see things from GM’s side of things?

  • I thought hatchbacks were making a comeback. I guess I was wrong since GM doesn’t think so.

    • Thetruthísntalwayspopular

      I don’t know if you know this, but every SUV is a hatchback. If you can find one in sedan form pls let us know.

      • Touche. But I’d choose a Cruze hatch over a Trax; a Mazda3 over CX3; a Civic hatchback over HR-V; a Focus hatchback over EcoSport. The supposed height advantage of CUVs is a turn off.

  • PhilMcGraw

    What GM should have focused on instead of killing off all these sedans was work on simplifying their lineup and getting rid of duplicate options.

    GM has Chevrolet, Buick, GMC, and Cadillac with a lot of product overlap. GM would be better off offering two options – low and high end – per class instead of 3 or 4 different options. For example, why does GM need to have the Buick Envision, GMC Terrain, Chevrolet Equinox, and Cadillac XT5? I’m pretty sure you could cut the Envision and Terrain and still have a good enough offering in that space. Or maybe take one of those and make it a hybrid/electric offering. Why do we need a Chevrolet Trax and a Buick Encore when they only differ by $2k and have very similar options?

    • Bill Nguyen

      Yeah, you’d think they would have learned after they almost went bankrupt back in 2008 or whatever…

    • Thetruthísntalwayspopular

      You realise every major Automotive group does this right? It’s called economies of scale. VW does it the most. look at the proliferation and overlap between skoda, seat, vw and Audi. They even do it with Porsche, lambo and Bentley ffs. PSA also does exactly the same with Peugeot, Citroen and opel.
      I think a lot of people commentating on sites like this have no idea how huge Buick is in China. China is the only reason Buick exists.

      • MarketAndChurch

        Well said.

    • MarketAndChurch

      Because SUV’s are big sellers, and GM is one of the big sellers of SUV’s, so variety allows GM to pull in buyers from different markets, with everything from compact to full-size SUV’s. For example, people who cross shop Buick tend to also look at Lincoln, Acura, Genesis, and Lexus, so Buick wants the Envision to appeal to that audience. Cadillac’s XT5 is meant to appeal to buyers who would want something from the German 3. And the Terrain and Equinox combine to outsell the Toyota Rav 4 and Honda CR-V. So it works well for them.

      The Trax doesn’t have much of a case for its existance other than to be GM’s small vehicle offering.

    • Dan Castor

      That formula may have worked decades ago when GM would build a car and slap on Chevy, Olds, Pontiac and Buick logos on them. May have worked back then, but these days, you can’t compete within your own.

    • Nordschleife

      Well platforms cost a lot. That’s maybe while they need to proliferate the market with different models. I do appreciate they (GM) offers more differentiation then what they used to style wise but i do agree with you as well.

  • ➡️ProtectOurHeritage⬅️

    This is what happens when the bean counters run the show.

  • Bill Nguyen

    People always talk about bad quality, bad marketing, but I wonder if it’s really dumb business decisions like this that are really gonna kill US car makers.

    • MarketAndChurch

      This isn’t a dumb business decision. From 2011 to 2015, GM averaged 240,000 Chevy Cruz a year, the past two years, that has dropped down to around 180,000 a year. This year, from Jan to Oct, GM has only managed to sell 109,000… and with only 3 months left, will struggle greatly just to get to 150,000. Next year it will probably be even worse, as the market for small cars shrinks even more than it has the past 3 years. These companies aren’t dumb.

      • BarryFastCars

        2 months

      • Bill Nguyen

        Seems they’re just handing sales over to the Japanese companies, that’s why I say it’s dumb. I think Toyota is #1 still, right? They have cars for every category pretty much, they even stick with slow sellers. I think if you want to be the best you gotta look at what they’re doing.

  • Honda NSX-R

    Hmm I thought Chevy said they’ll continue making low roof cars after Ford announced its decision to kill off anything that isn’t a CUV/SUV, pickup truck, utility van, or Mustang…could they be doing the same thing but slowly? ?

  • BarryFastCars

    The same argument can be made about Ford. Sure they sold almost double the amount of Escapes than Foci but 160,000 sales on a car that shares the same platform does not seem easy to make up. I will not buy an SUV. My girlfriend has a first generation Escape hybrid that is fantastic and practical. A fair comparison is that the Focus also outsells the ridiculous EcoSport. I do not see the writing on the wall for compact and midsize sedans like these companies do. The market is changing, but with companies ditching complete sectors of the market they are just going to shoot themselves as they lose sales to great vehicles like the new Mazda3, Civic, Corolla. You could not pay me to own a Chevy Cruze, but the new Focus is damn near best in class and should be the entry level model for Ford in the US no doubt about it.

  • charlotteharry57

    The Lordstown plant has a long history of iffy quality products. At first, I was puzzled about this decision as well. But, thinking back to my local auto show a few weeks ago, the Cruze sedan had a hood latch lever (inside the car) that was falling off. It was also a poor decision to make the hood totally invisible from inside the car.

    • emjayay

      Lots of cars have a hood you can’t see from the driver’s seat.

  • Jason Panamera

    Because it may be long term decision. Maybe adapting production lines for new generation of Cruze will consume same amount of money as adapting for SUVs? Which are of course safer option in these times.

  • kachuks

    Maybe they just needed an excuse to bleed their workforce. Marchionne spared many jobs by actually “reallocating” small car facilities into RAM and Jeep production. GM is far behind the curve or just cutthroat.

    • TheBelltower

      Perhaps. Some are saying that these plant closures will happen prior to GM and UAW ending. Putting Barra at an advantage during negotiations.

  • Stephen G

    Why should I get a Cruze when Mom and Dad will buy me an Equinox?

  • LJ

    It didn’t outsell the Trax because the Trax is garbage.

    • Thetruthísntalwayspopular

      It isn’t. The Trax is actually a decent little suv. I had one, it’s a nice little ride. But yeh, keep talking sh1t on the net.

      • LJ

        You owned a Trax… lol

        • Thetruthísntalwayspopular

          Yes I did. I change my cars every 3 months and the Trax came up at a great rate. So you see , I speak from personal experience, which is able to provide me with an informed opinion; unlike mouth breathers such as yourself.

          • LJ

            It’s a chronic sinus problem dammit.

          • Paul

            A brother of mine had a Trax too for a while, him being like you trading often, I got to drive it some and it is a decent little vehicle really.

  • ErnieB

    Only two Gm cars that I’d consider would be a corvette or a Tahoe.. other than that everything else is ugly as sin!

    • rodriguez256

      The only one I like is the ZR2 Colorado.

      • ErnieB

        Forgot that one.. best in class imo..

    • Ron

      In your opinion which means about as much as, well, nothing.

  • THE CRUZE IS ONE OF THE FEW SHARP LOOKING CARS CHEVY MAKES THESE DAYS. A LOT NICER LOOKING THAN THE IMPALA AND MALIBU.

  • Tumbi Mtika

    I won’t cry if GM gets fucked by a recession.

    My patience for them all but went when Pontiac died.

    • BlackPegasus

      Well damn lol

  • I love the Equinox rather than the Cruze. The Cruze looked ugly anyway…

    • J-Triumf

      The Cruze isn’t ugly at all, it’s one of the better looking cars in the GM lineup.

  • Dan Castor

    Back in the 80’s and 90’s. The roads were filled with Then-new Ford Escorts, Tempos, Tauruses, Chevy Cavaliers, Celebrities and their GM clones, and the Chrysler K-Cars and Cloud Cars. Now you the only 80’s and 90’s compact cars you see are Camrys, Corollas, Civics, Accords, Maximas and Sentras. The American auto makers slept on the Import invasion of the 80’s and 90’s when the Big 3 from Japan took over. Instead of making a product to compete with them, they were pretty much competing within their own, offering the same cars with different badges. This was seen from a long time.

    • Ron

      Sadly I have to agree with you. In my opinion the Cruze, even the last gen model was better than the Civic or the Corolla and certainly better than that god awful Sentra but people still drive past the Chevy dealerships due to the looming 1980s perception that the imports are better. My thought is the perception toward American SUVs is different and the big three want to capitalize and focus on that market before they lose any ground. Might be a smart move or a bad one that they will never recover from.

  • Bruce K

    They sold 185,000 Cruzes last year, and GM is ditching the model??? Well that’s just stupid. Sure, its latest redesign made it look a bit anonymous & bland, but enough people were still attracted to it enough to buy it. There are whole car BRANDS that sell less than that. What GM should do is update the Cruze, not sack it. And then maybe build a next-gen Trax on the new Cruze platform to save costs & also increase sales of the Trax.

    • Thetruthísntalwayspopular

      If you lose money on each one, then it doesn’t matter if you’re selling 180k because it’s a huge loss. People don’t understand how expensive it is to build cars, especially small cars in a developed market like the States. Add in the fact that the cruze is very well equipped and it’s enormously difficult to make any money. Why do you think GM is rapidly expanding Cadillac and the upscale trucks?

      • Liam Paul

        it wouldn’t matter if they built the new blazer along with the cruze in youngstown and not in mexico. Closing down Youngstown Ohio is total BS, esp after we bail out gm to save those jobs back in 2008. Building the Blazer there with the cruze would had made the cruze profitable

  • Wil Chambers

    The high quality Cruze sells slow? The much more crappier Cavalier sold millions. Explain that one to me.

    • Thetruthísntalwayspopular

      The market has changed completely, the competition and choice has exploded and people no longer want traditional sedans in the numbers they once did?

      • Shelby GT500

        Ok, hatchbacks are becoming less popular but the total capacity of the
        US market remains the same. People will just buy crossovers instead. Why
        won’t GM make more crossovers at these plants?

        • Thetruthísntalwayspopular

          Because they are already making crossovers at all the others? The plants that are begin shutdown are enormous plants and would require huge investment to make them appropriate for future electrification. The entire reason all of this is happening is because GM is trying to future proof the company for the next 20 years +. I’m not saying I like it, but I understand from a business perspective.

    • skinny

      The Cavalier days were long ago and different times.

      1) and foremost everyone it seems wants a SUV/CUV.
      2) inflation adjusted, people can afford more car than they used to be able to, therefore smaller cars like the Cruze/Cavalier class sell less.
      3) tied to number 2, it used to be a 36-month car loan was pretty much the maximum term, maybe 48 months. Today, people are stretching payments out to 60, 72, 84, and possibly more, so less people buy more car than they can really afford.

  • Domestic cars only survived because the majority were sold to the rental companies. Now, the rental companies have switched to SUV’s.

  • Shelby GT500

    Ok, hatchbacks are becoming less popular but the total capacity of the US market remains the same. People will just buy crossovers instead. Why won’t GM make more crossovers at these plants?

  • Paul

    The latest Cruze was a flop because of GM pricing and standard/optional feature content availability reinforced by some quirky styling ques.

  • BlackPegasus

    The pendulum will soon change as a new generation of buyers will grow to loathe crossovers and SUVs. Those vehicles will remind them of their parents. As for now, it just makes good business sense to pull the plug on models that aren’t moving. The American sedan is indeed dying.

  • Cobrajet

    I sense a conspiracy here,

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