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DETROIT – General Motors is positioning two new crossovers from Chevrolet and Buick as its answer to affordability issues left by discontinued, cheaper sedans.
Affordability has increasingly become a concern among investors and consumers. Cox Automotive reports the average price paid for a new vehicle this year has ballooned to upward of $48,600. That’s up about $5,200 from two years ago and up $11,700 from five years ago. The higher prices have pushed roughly 10% of traditional new car buyers out of the market, according to Cox.
GM, like its crosstown rivals, has largely discontinued traditional sedans in favor of popular, larger crossover vehicles. The problem is those smaller vehicles were among the cheapest in the industry and have yet to be replaced by anything close in size and price.
While nondomestic automakers such as Toyota Motor and Hyundai Motor continue to offer sedans, the prices have steadily increased and those options have been in low availability in recent years due to supply chain problems.
“Automakers have made a choice to focus, especially during the chip crisis, to focus on bigger more expensive, more profitable vehicles,” said Michelle Krebs, executive analyst at Cox Automotive. “But there clearly is demand for less-expensive vehicles.”
GM’s new 2024 Buick Envista and redesigned 2024 Chevrolet Trax crossovers start at $22,400 and $20,400, respectively. That makes them competitively priced with sedans from other automakers.
The Trax and Envista are sedan-like in silhouette and style but roomier on the interior like the company’s current smaller crossovers.
Executives from Buick and Chevrolet say they expect the vehicles to be among their bestsellers as production ramps up and the crossovers are imported from factories in South Korea.
“If every vehicle you sell is $60,000, you’re really limiting the ability to attract new buyers to the brand. A vehicle like the Envista is strategically important … this just opens an entirely new audience for us,” Sam Russell, marketing director of Buick, told CNBC.
The Envista is expected to be among the top-selling vehicles for Buick, according to Russell, who described some of the potential customers as “segment orphans” amid the dearth of sedans.
Chevrolet, which cut all of its sedans except the Malibu, expects the Trax – a familiar name for the brand, but an all-new car – to be its third best-selling vehicle. That would put the Trax behind the Silverado full-size pickup and Equinox compact crossover but ahead of the Chevy Tahoe that posted sales of more than 105,000 units last year.
“We’re super bullish on the car, no doubt, but I’m really bullish on this notion of that Chevrolet hasn’t lost our mind,” Steve Majoros, head of Chevy marketing, said of cutting its least expensive vehicles. “These are the vehicles that Americans want, and Chevrolet hasn’t forgotten about that.”
New Envista and Trax
The Envista and Trax feature a number of standard safety and convenience features, above what GM has historically offered on entry-level vehicles. Both vehicles are powered by a 1.2-liter turbocharged inline three-cylinder engine, producing 137 horsepower and 162 pound-feet of torque.
The new Trax and Envista are sibling vehicles as they share the same platform and have similar interiors and silhouettes. The vehicles are differentiated through front and rear design tweaks as well as controls in the vehicles.
“The entry vehicle is evolving from the typical sedan and hatchback with frumpy styling to compelling alternatives. GM reimagined the roles of the latest Trax and Envista and resulted in expressive options for entry-level buyers,” said Paul Waatti, manager of industry insights for AutoPacific. “They should both revive GM’s sales at the lower end of the portfolio and start to backfill some of those entry-level models that have been broomed away.”
Both vehicles are priced under more traditional, smaller crossovers for both brands: the Chevy Trailblazer and Buick Encore GX. Those vehicles sit more upright and have more of a compact look compared with the longer and arguably more spacious Trax and Envista. However, the Trailblazer and Encore GX do not offer all-wheel drive.
Executives for both Chevrolet and Buick said they believe the new vehicles will attract a significant number of new buyers to the brands, assisting in growing sales and market share for GM.
“The Encore GX is what we call our loyalty play. The role it has to play is build off the success of the first generation,” Buick’s Russell said. “The Envista, the vision is this is our conquest champion.”
GM’s U.S. sales through the first half of this year were up more than 18% to roughly 1.3 million vehicles sold, as the auto industry’s supply chain problems stabilize.