Yesterday, the Detroit News reported that General Motors has announced a delay in the launch of their new, small car, the Chevrolet Cruze to Q3, 2010. Most analysts and those in the blogosphere agree that the Cruze is a critical vehicle for GM to get right. A delay like this may in fact just be something as mundane as what GM tells us – “to ensure a flawless launch”. And, it is certainly not uncommon for any manufacturer to delay the launch of an all-new vehicle.
However, put in context of the financial problems GM and its suppliers have had, it would not be too much of a stretch to imagine that there are supplier issues driving this delay. As recently as last month, GM delayed another important launch, the Buick LaCrosse due to unspecified “quality issues.” This all seems to me to be pointing to a supplier base and production system that is challenging for GM. (I would be remiss in not pointing out that relating to the link above, American Axle did announce this morning a quarterly profit in Q2, so apparently GM’s financing worked out for them.)
The Cruze and the Volt are both based on the same platform – GM’s global Delta platform. Without having too many details on either the reason for the Cruze delay or how much of the underpinnings are shared between the Cruze and Volt, it is speculation (but likely not too far off-base) to assume that this is trouble for the Volt team as well. The Cruze is now expected to launch Q3, which is very close to the previously anticipated Q4 launch of the Volt. As an aside, I find it interesting that GM delayed “3 months” from April 2010 to “about Q3” 2010 – which makes me wonder if that word parsing means it will actually be a longer delay than 3 months. After all, September is still Q3.
Obviously, GM wants the Cruze launch to go off spectacularly, and no doubt it wants the Volt to do the same. My gut says that Chevrolet program and marketing managers alike would rather have the Cruze in the U.S. market for a few months before launching the Volt. This combination makes me think that there is likely a delay coming to the Volt launch. However, at the same time, there is some outside pressure that GM has to keep an eye on – that pressure has a name: the Plug-in Prius. However, if it were me, I’d advise GM to get the launch right, rather than worry about being first.
Finally, to get back to the Cruze, GM tried to put a good face on this delay announcing that variants of the Cruze will be available to launch at the same time with the first version in Q3. The variant is expected to be an upgraded 1.8L engine, a more powerful engine than the 1.4L 4 cylinder turbo of the base vehicle (which I assume will also get slightly lower fuel economy than the base vehicle). GM won’t want to delay the Cruze too much, because it has its own outside pressure in the form of two giants in the US small car market: a redesigned Ford Focus expected in late 2010 and a redesigned 2011 Honda Civic (timing not yet officially announced, but late 2010 seems likely).