To Brazil and Back
By Bob Lutz
GM Vice Chairman
Last week, I had the opportunity to spend three days with our Product Development team in Brazil, and it was, honestly, an emotionally rewarding experience!
This small team, battling against stiff competition in a market just recovering from a severe slump, saddled with an exchange rate that makes previously profitable exports all but infeasible, and blessed with very little in the way of new capital, is responding with unmatched creativity and enthusiasm.
Their ability to re-use previously tooled parts from a variety of available sources, spend a minimum for new sheetmetal and bold, new interiors, add engines that can run on any combination of gasoline, ethanol or even CNG, is resulting in a stream of exciting new products ideally suited for markets that are developing and which cannot accommodate the costlier and more sophisticated products created in traditional Western countries.
They are striving to deliver the lowest-cost entry level vehicle line in the world, lower than the much-hyped Renault Logan or VW’s rumored new low-cost project. And I am betting they’ll succeed.
I left Brazil thinking: What a terrific, multi-talented company we have, and what an asset that we can exploit as we move forward in the implementation of “One GM”, with one global product development organization, coordinated and providing mutual assistance and support around the world.
Up until now, this potential was not fully realized, as our strategy was a regional one. Now that we’re global in our approach, we are raising our game to an all-new level.
To say I was excited at what I found would be a considerable understatement…
- Posted in Auto Shows
Trollhattan Saab
Bob Waxes Brazilian
Sorry Bob, but I’m a little cheesed off. I live in what is commonly descrived as the arse-end of the world and what was once described by our own former Prime Minister as a “Banana Republic”, and if I can…
Darren Falls
Hi Bob
Another example of the development of a fantastic product at low cost to the Corporation is the Saab 9-2x.
It is fantastic looking and much more more refined than the car it is based on, yet retains the stong points of subaru engineering … an aggressive powertrain coupled with a solid 4WD suspension.
Without question GM should continue to leverage its global power by purchasing the best possible components, and creating products that are far better than the original.
With some solid marketing and product management, the 9-2X could easily double its sales in Canada.
Why don’t you hire someone in your target market (like me) to solve your 9-2x problems. Given the sales figures, I’m sure the product managers job is available…..
Edward Hayes
Bob,
Did you find any inexpensive small high volume product to bring back to the states that can compete with Scion or BMW’s mini. I mean we really need some market share eaters here. Is the Corsa still out of the question? What about Daewoo? Is the Matiz for real?
We seen how popular the Aveo is.
Just looking out!!!!
The TrueTalk Blog
Samba Lutza
Bob Lutz reports on a Brazilian trip in this week’s post.
Dennis Schrage
What did the trip have to do with getting the Camaro and other RWD models out to the dealers showrooms faster?
André
Hi Bob,
I’m Brazilian, living in S√£o Paulo (I think that you knew my city a bit). I’m glad to see that you recognized the talent of GM do Brasil’s team. Here in my country, Chevrolet is recognized by its products, some of them classics of our auto history.
And it’s about the talent of our guys that I’ll talk about. I think that they’re aren’t being challenged as were used to in other times. In the 1960s, they took a Rekord C body, two Chevy II engines (4 and 6 cylinder units) and made the Opala, a car which was technically better than the donors of these parts. In Brazilian terms, it was a huge success and even today, it left a lot of fans, because of its proposal. It was produced between 1968 and 1992, selling 1 million units. It was suceeded by the first-generation Omega, which was produced between 1992 and 1998, selling just a hundred thousand units. Then, the Brazilian Omega was suceeded by a rebadged Holden Commodore, called also Chevrolet Omega, in 1998. But, because of the maxi-devaluation of our currency in 1999 beginning, the Aussie car went very, very far from Brazilian reality.
What I want to tell with this history? After the Opala, we never had a car which could really be considered its successor. The first Omega was too expensive and the second, as an imported car, is very, very far from the reality of our people. Opala sold well because it was a honestly-priced, RWD car, very well-made. If you compare its sell numbers, specially in the 70s, with their competitors (Ford Maverick and Dodge Dart), you can see that sold practically in a relation of 5 Opalas per 1 Maverick. Even in the 80s, the car sold well, because of its proposal. The Monza (the Brazilian version of the J-body) was a little bit cheaper and sold more in this decade (by three years, was the leader of overall sells, and for many years, the second most sold), but Opala also had a faithful audience, because this people wanted a decent priced RWD car.
In Brazil, if you go any place and talk with people about an unforgetable car, many will tell that Opala was the one. Opala here is a legend like Camaro, Bel-Air, Impala and Chevelle are for the Americans. It’s also one of the most common vintage cars and it’s even common to see more recent units being used as everyday cars in a decent condition.
But, with the demise of Omega and the stratospherical prices of its Aussie sucessor, Opala fans were left behind, without any car that could fill the proposal. Well, maybe some of them went to smaller FWD cars, as Monza or even the first-generation Vectra, because they can’t have for their money a big, RWD and inexpensive as the Opala. And, if you see Brazilian GM’s lineup, will see a huge price and size gap between the Vectra and the Aussie Omega. I don’t need to say that it would be a perfect fit for a RWD, decently priced car, as Opala was. It wouldn’t have no competitors with the same proposal and also could bring back some of the loyal fans of the original Opala. And, as “Thunderbird” in US, Opala is still a strong name here in Brazil.
You get impressed with the ability to re-use previously tooled parts, and I also think that a true Opala sucessor could have benefits from this practice. We have here in Brazil suppliers which could assemble a 5-speed manual RWD gearbox and all the parts needed for a modern-day RWD car (and even using independent rear suspension. The Brazilian Omega used it). In the world, GM’s RWD projects with the same size of the original Opala aren’t progressing (in which stage is the real-world version of the Torana TT 36? As I know, it’s stopped because of the low production capacity of Holden).
I have also to remember that GM do Brasil is the brand that sold more front-engine, RWD cars here in Brazil, in all times. And these cars are still in our minds. Even though most of the Brazilians which can afford cars can only afford small, FWD models, we still got a lot of people that would like something like the original Opala. Maybe it would hit here as Chrysler’s LX cars are doing there in the US. It would also fill a niche of government orders (when it was produced, Opala was one of the prefered cars in this niche, used as cop’s car and other purposes).
A platform like this could also be use in other GM units. Shorten a bit and you have a perfect Sunfire successor filling perfectly today’s proposal of Pontiac. Stretch another bit and you have a good Buick below the LaCrosse and away from the old-man’s car fame of the brand. A Brazilian developed RWD platform could also be cheaper than Zeta and underpin a lot of American and European products. Isn’t time to give to the Brazilian team challenges above simply doing FWD, cheap mass-market cars?
Swade
Darren (comment 1),
I’ve been lobbying Bob for the Saab Canada job for some time now (see http://www.trollhattansaab.net/archives/2005/03/an_open_offer_t.html)and he ain’t returning my messages, but you’re right - Canada is a market with virtually zero Saab penetration, a greenfield.
Bob (or Jay Spenchian),
Is there going to be a 9-2x Aero next year. The vibe around the traps seems to indicate that their won’t be. Say it ain’t so. After a year of cynicism, people are just starting to cotton on to the quality of this car. Don’t kill it - please.
reagan
07 Trucks: Better have’s: 6-speed auto, 325hp 350tq, reg cab SS version..LS2 good, LS7 better
Cobalt: 5 or 6 speed automatic, sportier lower front fascia, SS needs 225hp at least, sort out the handling and steering
Impalla: 6 speed automatic
G6: 6 speed automatic, GXP version
Corvette: 505hp is good, 600+ would be world beating…think Lingenfelter 427ci twin turbo 750hp…
Camaro: 3.9L, 5.3L RS, 385hp LS2 Z28, 500hp LS7 SS(remember ford shelby GT500 is 475hp)
Colorado: 225hp and a 4 speed auto? yeah right…4.8L V8 280hp…6 speed auto. Dont you guys even want to try to compete with the japanese?
Im about to graduate college. I love GM. Give me a job in prouduct devolpment and we can get GM back on the right path.
talonsaab
Another great global opportunity is GM Canada Engineering. There is a terrific yound group here who are all car enthusiasts and would love to work on some specialty vehicles and high performance projects.
Lesley Witherspoon
Frankly, some of us in the “sophisticated west” could use a cheaper car as well. Especially after we’ve seen our incomes fall in these last few years. You know, there is a market in the United States for inexpensive vehicles as well.
Z064ever
Why aren’t you excited about competitively priced USA made products? We need jobs here we can build them better and cheaper. Invest in American factories, not Canadian, Mexican, or Brazilian.
kurtW
Has Brazillian group tried retooling RWD drivetrains for smaller vehicles like the Malibu. Admittedly a big retrofit but given the wildly popular aspect of RWD lately, that might lead to a hit vehicle!
Barry
Well, let’s see what the Logan competitor looks like. So far, I don’t see anything out of GM to compete. Talk is good if it turns into product and it isn’t years late. My question is why doesn’t GM already have a competitor for global markets? Sadly, it’s likely because GM has no Carlos Ghosn. By the way, bring a $6,000 auto to the American market with a little higher trim level as Renault is doing with the Logan in Europe and you’ll find your market size increases as opposed to stealing sales of higher profit cars.
On another topic, we see GM’s campaign to let everyone buy cars at significant discounts is working…for now. At what cost? Before everyone does alot of back patting, I’d like to know how many new customers are buyers. Also, how many sales would have happened anyway but people moved up their time table to make sure they got the “deal”? GM’s latest consumer training to wait for a deal? Rebates became impossible to get rid of so now we have cars sold for no profit. Great idea. I suspect GM took alot of its profit off of the table because most of those customers would have likely bought a GM car any way. We’ll know if GM’s sales fall in the coming months. I’m also highly confident GM could have increased profits by using a different strategy.
Finally Bob, I suspect you already have many of the cars you need to compete in America. The problem is they aren’t sold in the American market. Some very snazzy cars made by GM’s global businesses. I suspect it has less to do with tastes in other markets and superior designers in other markets and more to do with those divisions being outside of the clutches of the imcompetents in Detroit. Move design out of Detroit and move the entire design decision making team out of Detroit if you can’t do the basic blocking and tackling required to keep the bean counters and MBA’s out of the cookie jar. The sad thing is this appears to have been the case for thirty years. The rest of GM gets superior designs while we get Cimmarrons, Impalas and Aztecs. It’s funny to hear the GM “experts” say American tastes are different. Oh really. You mean grandma and grandpa? Interesting to see the Lexus LS400, Acura RL, Scions and other cars running the streets of Japan under Toyota, Honda and Dahaitsu labels. Funny that the Japanese consumer, with totally different tastes and no room for large cars have the exact same taste as American consumers. Elegant design and beauty is timeless and international. Just like a fine wine and great food.
André
KurtW, the first Brazilian GM passenger car was the Opala, which debuted in 1968, two years after the Opel Rekord C which gave it the body. Immediately was a huge success, being in the first half of the 70s the second most sold car here, only behind the VW Beetle (well, if you think that Opala wasn’t exactly a people’s car as the Bug, it’s a honor to be in the second place). It only lost this place in the second half, because of a lot of small cars.
The second GMB’s car was the Chevette. Our is different from the American, resembling more the Opel Kadett C’s design. Brazil was the first country that debuted a T-body, making it six months before Opel.
Opala also had a SW version, called Caravan, derived from the two-door version of Opel Rekord C Caravan, but, in my opinion, a lot better designed than the German body (Rekord C’s lines are too dull, maybe following the German design tradition, compared with Opala’s. And, if you look both cars, will see that the differences are minimum, but significant).
After Opala, Chevette and Caravan, we also had other RWD cars from GM: Marajó (the SW version of the Chevette), Chevy 500 (a small pick-up derived from the Chevette), and them the Omega, which had a SW version called Suprema.
As I said before, GMB is the brand that sold more front-engine, RWD cars in my country. Take all Opala and Chevette sell numbers, plus the others RWD, and you have more than 2 million units of RWD Brazilian Chevrolets.
Unfortunately, in the 90s, with the demise of the Omega, Brazil doesn’t have any RWD cars produced here. After this, it was followed with the raise of the price of smaller FWD cars and the impoverishment of the options of our market. Now, we sell principally small, cheap cars, as it was traditionally, but, above the small cars, just Focus-sized rides. And we used to have bigger options than these. Brazil even produced a land-yacht between the 60s and 80s: the Ford Galaxie, derived from the 1966 American edition.
In Brazilian GM lineup, we are expecting the Vectra successor, which will be the size of a Cobalt. But, even with this new vehicle, it will be a size and price gap between it and the Aussie Omega, which could be clearly occupied by a today’s version of the Opala, following the original recipe of the first one: a car by the size of the Malibu but lighter when compared to American projects, RWD, with capacity for at least five adults comfortabilly installed (we also had a six-passenger version, using a bench seat).
The Brazilian GM’s team has capacity to project a RWD car nowadays. And, with the lack of a world platform like this in GM’s lineup, it would be a very challenging task for us. The guys who put the Iron Duke and the inline-6 into a Rekord C’s bay can do a lot of things. We also put a Family II and diesel engines into our S10. The inline-6, modernized with a multipoint injection, developing 168 HP, was put in the Omega’s bay replacing the 3-liter imported Opel engine used in the first two years of the career of this car. And the first-gen Omega was near the size of the Malibu…
So, we have here a lot of talent, but today, I feel that they’re being underutilized. Chevrolet here was also a brand that traditionally sold mid and large cars, in Brazilian standards. The Monza (our J-body), the two Vectras, the Opala and the Omega are cars that are in the memory of everybody and giving good rememberances. But nowadays, we just practically have FWD small cars (Celta and Corsa are the most sold GM cars). Brazilian-made RWD, only in the S10, which is a truck, not a passenger car. RWD car, only the rebadged and imported Holden Commodore that we call Omega, which is very far even from the mid-class Brazilian (in other times, Opala was one of the most common cars in this part of our population). So, I think that GM do Brasil has a very good opportunity to make an inexpensive RWD car, as was the Opala. And, as I said, a Brazilian-developed RWD platform could underpin a lot of American and European projects. And, with our capacity of combining engines and bodies, I don’t doubt that a platform like this could have a huge set of engines: the four-cylinder Family II and Ecotec, the DOHC V6 family used in the CTS, the OHV V6s, the Northstar and the 5.3 OHV V8. So, I don’t have to tell that this platform could also make a huge compact and mid-sized RWD lineup in the world, which could help GM in every continent. All it needs is give this challenge to the Brazilian, which proved to be competents making other RWD cars in GM do Brazil’s history.
JIM
Bob-
With the high price of gasoline expected to go higher,people will be looking at more fuel efficient vehicles.
2 questions..
1.) Will Pontiac get a version of the Cobalt coupe to replace the Sunfire?
Maybe the Solstice coupe would be a good choice.
2.) What’s your thought on diesels for Cadillac and Buick?
Biodiesel is gaining popularity.
I know that it conjures up the Olds’ self-destruct-o-diesel, but a quality diesel may have a home in GM’s “premium” cars…maybe even Saturn with the upcoming AURA.
kurtW
Thanks for comments, Andre, very interesting.
I remember Brazil being the birthplace for the VW Fox, which was quite good for its price point. The talent is indeed there! So perhaps GM will take advantage of Brazillian expertise and let it give birth to the RWD cars Bob and so many enthusasists want. Or perhaps an affordable Logan-style AWD platform that could create a whole new gendre!
thibaud
Plenty of emerging markets around the world where a snazzy small SUV priced
Alex Isaac
The Zeta platform being cancled was a huge mistake for the American’s, I’m sure that given the Zeta platform, the Brazilians could build something cheaper then importing commodores there, and it would be more successful if they brought back the Opala using the Zeta platform, retuned by GM Brazil. It’s a shame that only Australia will benifit from it as the Americans do definetly need a large RWD car range, with 5 speed auto’s and 6 speed manuals available on each model (none of this 4 speed auto stuff anymore please).
Roger Hahn
Bob,
Make all GM products “Alternative Fuel Vehicles” that can also use E85 fuel. ALL vehicles - right away.
I believe this would involve changing the composition of some fuel line parts to withstand the alcohol. Done company wide, it would be a negligible cost. Everyone can still use regular gas but now they get the option.
Why? We want hybrids now. GM is working on a hybrid mass market presence. While we wait, this is just like when we wanted air bags & GM wasn’t prepared so GM installed anti-lock brakes across the board to satisfy safety concerns. Since there’s only a Silverado/Sierra hybrid now, I would warm up to being able to put $1.60/gallon E85 in my GM car. Even with slightly reduced fuel mileage, I’m ahead and happy.
This would be very easy to market. Congress is boosting E85 again big time. The marketing will turn from gold to platinum when 2006 GM E85 vehicles are mated to a hybrid system in 2007-08. American cars burning American ingenuity fuel. Less foreign oil, help farmers, cleaner air, etc.
I believe your Brazil visit would demonstrate that this would work well here.
Eric Barger
Bob, I believe a retro style camaro (no six bangers) needs to be introduced. The GTO is a flop because it doesn’t look like the GTO of times past.
Why is GM always late to the game? Unleash the vette team on the next Camaro.
Andy Parker
Bob,
This past Sunday New York Times had an article about how the US bicycle industry now represents the state-of-the-art for bike technology. Twenty years ago, they weren’t even close. It strikes me that there’s no reason why the US automobile industry can’t do the same thing. We lost our way in the 1970’s and 80’s - but the United States is a center for creativity and innovation in many areas. What’s stopping us in the car busines? Perception might be one area - in any parking lot catering to wealthy shoppers, try to find a US car - they aren’t there. Like it or not, very few wealthy Americans are ever going to buy a Pontiac (even thought the Solstice looks like an amazing deal). Maybe it’s time for GM to create their own Lexus brand.
C Heugel
The GTO is not a flop. Have you rode in one? driven one?
It is by far the best car IMO GM has ever built for 30k.
IMO GTO is not a style, its a definition. Performance at a not-so premium price.
The original GTO’s were just a variant of existing cars. This GTO is no different badged like its fellow pontiacs.
Why does everything have to be ‘retro’ to be good looking?
I love the car inside and out. Maybe thats why I bought one. And I don’t consider selling 95% of every GTO shipped to be a flop.
Jack Yan
Wow, a lot of horse sense from the blog commentators. André: I, too, believe there is room for an Opala successor and if GM do Brasil can do development work on the Novo Corsa Sedan and the Meriva, not to mention the new Brazilian Vectra (Astra H sedan), then the company is not short on talent.
There’s a great case for doing what Barry suggests: a higher-spec Logan equivalent for western markets. Fiat, too, has proved that this is a workable strategy, albeit in limited numbers, while VW do Brasil is shipping the Fox over to Europe to replace the Lupo. There’s life in the Celta or Corsa B platform yet for a Logan rival; rework it with the GM parts’ bin and, bingo, you have a Chevrolet Sail successor for China, too.
Finally, Barry’s thought about the bean counters running amok and the company being hindered by a “Johnny Foreigner” syndrome is not far wrong. I’ve been in the brand consulting business for 18 years and I switch off when I see the three letters M, B and A.
Roger
Bob,
Are there any plans to market a bi-fuel (CNG/gasoline) small car like the Chevy Cavalier? I would have liked to buy one and was disappointed when they were discontinued after 2004.
Pedro
Mr. Lutz,
The Brazilian Chevrolet Vectra would make a nice Saturn ION, with a Aura-like nice rear-end redesign. Maybe that can keep Saturn in the compact car game while the next-gen Opel/Saturn Astra is developed?
Fabricio
Andr√© posted a great text about GMB and the Opala. I believe the first-gen Omega (sold in Brazil from 1992 to 1998) would be a success, still today, if it was’t replaced by the Holden Commodore.
Z
I heard that there are chevy trucks in brazil with ford engines which were built that way in brazil is this true and if so what years was this
Sporty
Hi everybody,
just stepped over this and wanted to say: nice Blog and truly committed comments!
I own a Opel Rekord and, when seeing those Opalas, especially early SSs (71?72?) must admit: a sheer beauty!
Nice to know you like them over there in Brazil!
Regards,
Sporty
Ames Tiedeman
GM needs to export the 2010 VOLT to Brazil.