Chevrolet Spark sales are heating up
Minicar stirs up interest among non-GM customers
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DETROIT -- Texas Chevrolet dealer Rox Covert is in truck country. But you wouldn't know it from the way customers snapped up all 16 Spark minicars he had on his lot since August.
Buyers have included seniors, college kids, moms -- and lots of non-General Motors customers. The company says 54 percent of Spark buyers are coming from non-GM brands, which is among the highest conquest rates in Chevy's lineup.
"It's not just young people or folks on a tight budget. It's everybody," says Covert, who owns two Chevy stores near Austin, Texas. Last week, he ordered another 25 Sparks.
The brisk Spark sales have surprised both GM executives and dealers, many of whom grumbled when GM decided to import a Korea-built minicar with razor-thin profit margins. The early buzz seems to validate a U.S. market for inexpensive minicars, a segment that most automakers so far have ignored.
"The minicar segment in the U.S. is hard to forecast, so we've been conservative in how many we bring out," says Cristi Landy, marketing director for Chevrolet small cars. She says dealers already are asking for more. "So far, it's been a good problem to have."
GM has rolled out the Spark in only 18 metropolitan markets, including New York, Chicago and Los Angeles, where the company also has hosted promotional events. GM sold 4,090 Sparks in July and August, when its total surpassed those of its two chief competitors: the Scion iQ and Smart ForTwo. While the Fiat 500 and Mini Cooper are similar in size, GM doesn't consider them direct competitors because their sticker prices are much higher than the Spark's base price of $12,995, including shipping.
IHS Automotive forecasts Spark sales of 27,000 in 2013, the car's first full year on the U.S. market. Based on its sales from the limited rollout so far, GM is on pace to exceed that total.
Landy and dealers attribute the demand in part to its appeal to budget-minded buyers amid near-record prices for used cars. Buyers are swayed by a new car with a 100,000-mile powertrain warranty for less than 13 grand, she says.
Spark also offers content and features not found on its rivals, such as four doors and more rear-seat space.
The 1LT trim level, which costs $14,495, including shipping, features Chevy's new MyLink infotainment system with Bluetooth and navigation via a $50 smartphone app that displays maps on the 7-inch touch screen.
"It offers more than people expect at that price point," says Harry Criswell, owner of a Chevy store in Gaithersburg, Md.
One thing it does not offer is much dealer profit. Some say the few hundred dollars is barely enough to pay the sales commission. But they concede that the car's edgy hatchback styling and distinctive colors -- such as "jalapeno" and "techno pink" -- are generating showroom traffic from people who might never have come into their stores otherwise.
And about 30 percent of buyers are 35 or younger, GM says, and thus could become long-term customers.
Landy says demand has been strong despite a shoestring marketing budget. She declines to give a figure but says it is "way less than half" the amount that GM spent last year to launch the mostly digital campaign for the Chevy Sonic subcompact, which also has been a hit.
All of Chevy's 3,000 dealers have been able to order Sparks, Landy says. She expects the car to be rolled out nationally by year end.
You can reach Mike Colias at mcolias@crain.com.
