Chevrolet is studying whether to offer high-mileage warranties on its new Korea-built subcompact, the Aveo.
"We will have to be competitive from an overall value perspective -- that is price, that is warranty," said Chevrolet General Manager Kurt Ritter at the Chicago Auto Show last week.
The Aveo and two new Suzuki sedans coming to the United States are products of GM Daewoo Auto & Technology in Korea. The company was created last year by General Motors and other automakers when the partnership purchased the main assets of the bankrupt Daewoo Motor Co. Ltd.
K.C. CRAINAssembler: GM Daewoo Auto & Technology, Korea
Sale date: Early 2004
Models:Sedan (top), hatchback
Competitors: Hyundai Accent, Kia Rio
Price range: Starting around $10,000
The 2004 Aveo lineup will include two models: a sedan and a five-door hatchback. The models will be exclusive to Chevrolet in the United States.
Chevrolet hopes to sell 70,000 Aveo vehicles annually in the United States, targeting such competitors as the Hyundai Accent and Kia Rio. Those vehicles' stickers start around $10,000.
GM has been fighting those cars and other Korean vehicles with deeply discounted Chevrolet Cavaliers, but it has capped its warranty at 3 years/36,000 miles. By comparison, Korean competitors Hyundai and Kia have used 10-year, 100,000-mile warranties to allay fears about poor quality and boost sales.
Ritter says the Aveo may be introduced with a warranty that has a longer duration than other Chevrolet vehicles. "Right now we are 36 (3 years/36,000 miles) across the board on our Chevrolet products," he says. "Certainly that is an option; discussions are under way. From an overall value standpoint we know we have to be competitive."
Ritter does not rule out the possibility of Chevrolet marketing a second vehicle produced by GM-Daewoo, called GMDAT by GM.
"As you go out into the future, I don't know what GMDAT may have in terms of platforms, iterations that might make sense for the Chevrolet franchise," he says. "We will stay tuned, and we'll see what happens."
An industry source, who asked not to be identified, said one possibility is a small SUV.
The Aveo, due in U.S. showrooms in early 2004, will cost between $10,000 and $15,000, he says. The car is sold in Europe as the Daewoo Kalos.
GM will sell three GM Daewoo nameplates in Canada and an unspecified lineup in Mexico for a target of 120,000 to 150,000 North American sales.
GM Canada also will sell the Aveo. In addition, it will sell the Optra, a compact based on the Daewoo Lacetti, and the Epica, a mid-sized vehicle based on the Daewoo Magnos.