The Chevy Cruze, the car that replaced the Cobalt, is selling well around the world and in the U.S.
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The good news is that GM has since figured out how to produce a competitive, small car. "It might have done OK in the Midwest, but it'd be tough to find a Cobalt purchased retail in Los Angeles," Toprak said. The Cobalts that were bought by actual consumers were concentrated in the parts of the country where there was little competition from Toyota's ( TM) Corolla or Honda's ( HMC) Civic. Related: GM sales unscathed by recall crisis "That's something Honda and Toyota didn't have to do." "When you put heavy incentives to sell to retail customers, and sell them to rental companies, you damage your prices," said independent auto analyst Michelle Krebs.
That drove down prices on the new cars even more, exacerbating GM's growing financial problems. The rental car companies kept the cars for a short period of time, typically less than a year, then dumped them onto the used car markets, where they were bought by buyers looking for cheap transportation in a relatively new car. GM declined to comment further for this article. So in order to sell the 200,000 or so Cobalts that General Motors was building every year, it offered large cash incentives to buyers, and it sold them in bulk to rental car companies which bought them at rock-bottom prices.īy 2010, the Colbalt's last full year on the market, fleet buyers accounted for more than 42% of its sales, according to figures from GM. Related: The 57-cent part at the center of GM's recall crisisĬonsumers responded accordingly. That's undoubtedly what GM CEO Mary Barra was referring to when she referenced the "cost culture" that governed what is now referred to as the old GM, prior to its 2009 bankruptcy, during Congressional hearings on the recall. So it's not that surprising that the Cobalt, and the versions of the car sold by GM's Pontiac and Saturn brands, weren't great cars. It was done to make sure that GM met fuel economy standards and utilized manufacturing capacity that was already there," said Jesse Toprak, analyst with.
"The Cobalt wasn't designed to be the best compact car.
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