Chevy's Trax stomps on the Sonic

DETROIT — For three years, the Chevrolet Sonic was a pint-sized showpiece for General Motors, proof that it's still feasible to build a subcompact car in the U.S. with unionized labor.

These days, the Sonic is all but lost in the shadow of the Trax, a crossover based on the same tiny architecture that's built in Mexico and South Korea.

The Trax has been an outsize success story for GM, which presciently spotted an opportunity in an underserved corner of the market and handily beat most competitors to the punch. It's the fastest-growing subcompact crossover in the industry, with sales soaring 33 percent this year through May.

But its arrival at the end of 2014 triggered a tailspin for the Sonic, whose 45 percent sales decline this year through May represents the biggest drop among small cars still in production. Sales of the two vehicles were nearly equal in 2015; the Trax now outsells the Sonic nearly 3-to-1.

The two vehicles embody the speed at which consumer tastes have shifted from cars to crossovers, perhaps more than any other intrabrand pair in the industry right

The good news is that these crossovers are much more profitable than the cars left sputtering in their wake. Buyers paid about $5,100 more for the Trax than the Sonic last month, according to Kelley Blue Book data, and the Trax even commands about $1,500 more than the Cruze compact car.

"It's not even costing them that much more to make the SUV versus the car off the same platform," said Karl Brauer, executive publisher for KBB and Autotrader.

But GM had surely counted on higher volumes of the Sonic to get the project, which started in 2008, into the black. And President Donald Trump's criticism of automakers' increasing Mexican production makes this an awkward time for an imported Chevy to cannibalize one built in Michigan.

The Sonic is in a particularly tight spot because Chevy is the only mass-market brand with cars in all five of the industry's size classes, from mini to full-size. The Cruze, redesigned last year, offers newer technology, more space and better fuel economy in exchange for a small bump in the monthly payment, while the Sonic has gotten only a modest freshening since its 2011 introduction.

Buick scratched its small-car offering, the Verano, from the U.S. lineup last fall, as sales of its small crossover, the Encore, keep climbing each year.

But Alan Batey, GM's president of North America and head of Global Chevrolet, said there are no plans to thin out Chevy's portfolio. Some cars might seem superfluous now, he said, but they are a hedge against another gasoline price spike that could send people scurrying to unload their SUV again.

"You always have to make sure you're protected against an external environment that no one can predict," Batey said in an interview this month.

"No one predicted when we were at $4 that we'd be down at $2. You've got to have a portfolio of products that really provide you the bandwidth that you need."

Many dealers still like having a wide variety of cars, too, so long as GM doesn't jam their lots with a surplus of inventory.

Nationally, GM had more than a five-month supply of Sonics as of June 1, but Rosedale Chevrolet in Roseville, Minn., had none in stock last week.

"The car market in general is not very good right now," said Rosedale General Manager Jeff Krapu, "but having a broad line like that means we have a chance to swing a bat in each segment. They're not big moneymakers, but there's a niche."

The Sonic, which replaced the forgettable Aveo in mid-2011, is the smallest car built by any automaker in the U.S. It's GM's first U.S.-made subcompact since the Chevette's run ended in 1987.

To facilitate that, GM took a number of cost-saving steps, bringing suppliers and subassembly work on-site and using innovations such as a thinner coating of rustproofing. GM also struck a deal with the UAW to pay many workers at the Orion Township, Mich., plant lower wages.

"We wanted to prove we could do it," Diana Tremblay, then GM's head of global manufacturing, told The New York Times, which highlighted the car's arrival in a front-page story.

A 2011 analysis by Automotive News calculated that labor costs for the Sonic would be 40 percent lower than at a traditional plant — but that was contingent upon GM reaching an annual production target of 160,000 Sonics and Veranos. It basically achieved that each year from 2012 through 2014 before output fell to only about 87,000 cars in 2016.

Today, the plant runs on just one shift a day, building the Sonic alongside another car that GM believes will lead it toward a prosperous future: the Chevy Bolt EV.