Why Chevy continues to invest in sedans

RENTON, Wash. -- As Ford Motor Co. exits the sedan business, General Motors is doubling down.

While the U.S. car market continues to shrink as buyers increasingly opt for SUVs and crossovers, it still represents more than 4 million customers and a chance to introduce consumers to GM with entry-level products, says Steve Majoros, Chevrolet's marketing director for cars and crossovers.

Chevy will continue to invest in nearly every sedan segment from subcompact to full-size, and Majoros said he believes GM's biggest and most important brand can gain market share in those segments as competitors retreat.

"It's a pretty big opportunity for us," Majoros said last week on a media drive program here to introduce the 2019 Chevy Camaro and Malibu. "As other people are making noise about leaving the car business or thrifting back their portfolio, there's still business to be had there. It's just going about the business in a smart fashion."

For GM, that includes adding a sporty Malibu RS trim as part of the midsize car's 2019 freshening.

The RS, on sale this fall, starts at $24,995, including shipping, and slots between the Malibu's LS and LT trims. It comes with a more aggressive front end with black accents and a black bow-tie logo, 18-inch wheels, a rear spoiler and dual exhausts.

The Malibu RS is expected to account for about 20 percent of U.S. sales of the Malibu, Majoros said, and will compete against Sport trims of the Honda Accord and Toyota Camry.

A new continuously variable transmission comes standard on the L, LS, RS and LT trims and is mated to a 1.5-liter turbo engine. The Malibu's top-end Premier trim keeps its 2.0-liter turbo and nine-speed automatic transmission.

Fuel economy has not been finalized, but GM expects the CVT will help the 2019 Malibu achieve about 2 mpg above the current version, which gets up to 36 mpg on the highway.

The RS represents an attempt by Chevy to target the mid-to-lower end car customer even as overall U.S. car demand shrinks. Cars represent 32 percent of U.S. sales in 2018, down from 46 percent in 2014, Chevrolet says. The midsize car market has shrunk another 15 percent this year, with Malibu demand off an estimated 5.9 percent, according to the Automotive News Data Center.

But the compact and midsize segments still represent one in every five vehicles sold, and Majoros thinks car sales have "hit their floor."

"There's still volume to be had there," he said. "We've done a nice job about taking a responsible approach to the product. If other competitors are leaving, we're very happy to pick up that business, and we'll certainly do that."