DETROIT -- General Motors Co. is in much better shape to handle a surge in gasoline prices than it was during the last spike three years ago, GM's product chief said today.
Tom Stephens, vice chairman of global product operations, said customers will be able to choose from an array of small vehicles across its brands -- something they weren't able to do in 2007 and 2008, when gas prices hit $4 a gallon.
“The last time it spiked up, we didn't really have a complete, full-line portfolio,” Stephens said on the sidelines of the auto show here. “What we were missing the most were small and compact cars. We were really in a bad way there.”
While small cars abound at the auto show, it's a particular focus for GM, a brand long known for its trucks and SUVs.
GM is unveiling two new cars today: the Buick Verano, the brand's first compact in 20 years, and the Chevrolet Sonic, a subcompact that will replace the Aveo.
Those small cars come on the heels of the plug-in hybrid ChevroletVolt launched last month, and the compact Chevrolet Cruze, which hit showrooms in September. The upcoming “Eco” model of the Cruze, expected to arrive at dealerships this month, will top 40 mpg.
Rebecca Lindland, senior analyst at IHS Automotive, said it makes sense for GM to offer drivers a better choice of small, fuel-efficient cars. But consumers haven't flocked to small cars even as gas prices have edged higher.
“The small-car segment has a lot of promise,” Lindland said. “But it can be a tough sell for consumers.”
Stephens said GM CEO Dan Akerson believes gas prices will hit “somewhere closer to $4” a gallon, rather than $5. Stephens said GM now has the flexibility in its plants to more easily shift production as demand warrants.
“Now I see a portfolio that doesn't have these big gaps, and therefore we can remix,” Stephens said.
GM also plans to use the Volt's powertrain in other vehicles, Stephens said. Akerson reportedly wants to expand vehicle electrification far beyond what GM initially had planned.
Heavy demand for the Volt prompted GM to boost its expected 2012 output from 30,000 to 45,000 vehicles. Stephens said the Volt “will grow faster than we ever projected it would grow.”
“If the data that I'm looking at is true, that's not going to be enough,” Stephens said. “What Dan has told us is to be prepared.”