The Chevy Sonic when it appears will be the only sub-compact built in the United States, and is expected to deliver 40 mpg highway with the optional – $700 – 1.4-liter four-cylinder turbocharged engine and six-speed manual transmission.
When the new Chevrolet Sonic enters production this fall in Michigan, General Motors is betting that gasoline prices will remain high along with demand for tiny sub-compact vehicles. GM thinks it can price the all-new Sonic at least $2,500 higher than the outgoing Aveo.
The suggested retail price of the 2012 Chevrolet Sonic sedan begins at $14,495 including destination but excludes tax, title, license and dealer fees of course, closely tracking the slightly smaller Ford Fiesta. Add another $1,040 if you want an automatic transaxle. The five-door hatchback Sonic starts at $15,395, again contrary to previous domestic marketing dogma that maintains hatchbacks are inexpensive cars. Fully loaded Sonic models will approach and in theory could surpass $18,000. So we have bets and side bets going on here as GM seeks to reach levels of profitability on small cars that could boost its sagging stock price. How customers respond is another matter.
GM is now exploring just how much it can charge for a small car in an area where, typically, Detroit Three products needed roughly a 20% discount (or more) compared with facing Japanese competition. In this case there are, notably, the Honda Fit, Nissan Versa and Toyota Yaris – all well established and priced roughly the same as Sonic, from companies that up until now are the acknowledged small car leaders. Sonic also faces stiff competition from the upstart Koreans – Hyundai and Kia – whose competitive models significantly under price it.
With demand for fuel economy rising once again and Japanese makers strapped for cars because of production disruptions caused by the Japan earthquake in March, incentives for larger compact cars plummeted 23% in May, according to Edmunds.com.
This compares to an overall industry incentive decline of just 0.7% across all segments, and is biased by much larger incentives on GM and Ford full-size trucks and SUVs, which are in decline. Overall, Japanese automakers – insignificant and failed players in the truck business – decreased incentive spending $334 in May to $1,351 per vehicle sold.
The Sonic when it appears will be the only sub-compact built in the United States, and is expected to deliver 40 mpg highway with the optional – $700 – 1.4-liter four-cylinder turbocharged engine and six-speed manual transmission.
In keeping with current small car marketing practices, the Sonic contains much more standard equipment than usual. Sonic comes with the most standard safety equipment in the class, including 10 air bags. Air conditioning, power door locks, remote keyless entry and 15″ alloy wheels also are also standard.
“Today’s customers have high expectations for small cars. Sonic comes with an unexpected level of standard equipment so that every customer will have comforts and amenities they desire,” said Rick Scheidt, vice president of Chevrolet marketing.
Well, we will see if the bold strategy works. Has GM earned its pricing position? As always the marketplace will sort it out. (See also Automakers Cut Incentives on Small Cars as Fuel Prices Rise)
