Friday, August 15, 2008

The critical acclaim was nice, but now the made-over Chevrolet Malibu appears to be raking in something General Motors Corp. covets even more: cash.

Car buyers are paying $5,000 more on average for a new Malibu compared to the old models, according to J.D. Power and Associates.

After the vehicle’s much-hyped launch, the higher prices are holding up despite a rough economy and some tough competition.

It’s a singular feat for a new vehicle launch, especially by a domestic automaker with a history of lackluster entries in the midsize sedan segment.

“This is very significant and it’s a major plus for GM,” said Tom Libby, an analyst with J.D. Power’s Power Information Network. “It’s rare that you see that much of a jump.”

GM, with a dramatic makeover and massive promotional campaign, has transformed the Malibu from one of the worst-performing vehicles in the midsize field to a respected competitor.

The revamp has won praise among auto critics and pumped up dealers across the country.

“The Malibu is probably one of the most significant intros GM has had in recent history — it’s a very positively received redesign,” Senior Analyst Jesse Toprak said. “And now it’s legitimately competing against the Honda Accord and Toyota Camry, which is something no midsize sedan has been able to do.”

The car still isn’t convincing droves of customers to trade in their Camrys and Accords. Only 1.4 percent of Malibu buyers traded in a Camry, which has long dominated the massive midsize segment, according to J.D. Powers. Another 1.4 percent traded in a Honda Civic and 1.3 percent traded in a Nissan Altima. And fewer than 1 percent traded their Accords.

But those numbers are an improvement from the old model, which didn’t even register a measurable level of Camry, Civic and Altima trade-ins. Mostly, the Malibu is still wooing buyers who already owned a GM vehicle.

About 40 percent of those who bought the 2008 Malibu previously owned a Chevrolet, compared with 48 percent of owners of the old models.

Pricewise, however, the difference is striking.

The average transaction price of the 2008 Malibu was $22,358 through March 25, just $30 less than the average selling price in November, when the car was launched, according to J.D. Power. The 2007 models are selling for $17,075, down from $17,787.

A year ago, the old Malibu was the cheapest of seven key midsize sedan entries in the United States. A V-6 Malibu sold for $7,000 less than a comparable Nissan Altima, which topped the list in March 2007 with a $27,223 average transaction price.

GM included more standard options, such as stability control and interior lighting, in the new Malibu, Chevrolet General Manager Ed Peper said this week.

The automaker’s data shows the average Malibu buyer is 49, four years younger than for the previous model, and the vehicle is winning converts on the West Coast, where domestic carmakers have struggled to make inroads.

Buyers also are opting for more richly packaged models, Peper said. The highest trim level - the $26,795 LTZ model - comprises 21 percent of sales, compared with just 5 percent on the old model.

“There’s a ton of stuff in these vehicles, and people are willing to pay more,” Peper said. “They see the value.”

A price bump is expected in any new vehicle launch, but auto analysts say the size and consistency of the Malibu’s higher taking price is unusual.

Not all of the money will make it into GM’s coffers, since the automaker likely is spending significantly more to build the new models. The automaker also spent more than $300 million on a massive marketing campaign to sell new buyers on the revamped four-door.

But GM is earning more on the vehicle than on the old models, Chevrolet’s Peper said, without giving specifics.

GM is offering only about 400 configurations of the new Malibu, compared with more than 6,000 of the old models, he said.

Making fewer versions of a vehicle tends to simplify the manufacturing process, thus cutting down on production costs.

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