General Motors - Small Car Sales

Small Car Sales

From the 1920s onward, General Motors always maintained an internal dialog about what its economy-car and small-car policies should be. The economy and size considerations often naturally overlapped, although a strong distinction was always drawn in the 20th century between policies for the U.S. market and policies for other markets. Economy (in some form) always had good demand anywhere, but its definition in the U.S. was long considered different from that in other markets. In this view, "economy" in the U.S. did not mean "small" in the sense of what qualified as "small" outside the U.S. The policy discussion often focused on topics like the higher demand for truly small cars in non-U.S. markets than in the U.S., and whether it made more sense to import a car into a certain country or to build it domestically within that country, either as some variant of knockdown or with truly extensive domestic sourcing. GM's acquisitions of Vauxhall Motors Ltd (UK, 1925) and Adam Opel AG (Germany, 1929), rather than starting new domestic companies to compete against them, were based on analyses that convinced GM managers that acquiring an existing domestic manufacturer was a better business decision.

Although GM since the 1920s has always offered economy models in the U.S. market (relative to that market's definition in any given decade), and had done research and development in the 1940s and 1950s in preparation for any potential rise of strong demand for truly small cars in the U.S. market, it has also been criticized over the decades for not doing enough to promote fuel efficiency in the U.S. market in the 1970s through 1990s. GM's response has been that it has always responded to market demands, and that most Americans, despite anything they said to the contrary, did not actually demand (at purchasing-decision time) small size or fuel efficiency in their vehicles to any great or lasting extent. Although some U.S. consumers flocked temporarily to the ideal of fuel economy whenever fuel supply crises arose (such as 1973 and 1979), they flocked equally enthusiastically to SUVs when cheap fuel of the 1980s and 1990s temporarily shielded them from any downside to these choices.

Since the return of high fuel prices in the 2000s and 2010s, GM's interest in small-car programs for the U.S. market has been renewed. As part of General Motors Company development, it plans to revive one of its idled U.S. factories for the production of a small car in Orion, Michigan, with the creation of 1,200 American jobs. This will be the first time ever that a large manufacturer produces a supermini vehicle in the United States. The new small car will add to a group of small and fuel-efficient vehicles that the company is planning to roll out in the near future. This retooled plant will be capable of building 160,000 cars annually, including both small and compact vehicles.