GM scraps cookie cutter for 2 compacts

They may sound like the titles for two new TV shows, but the success - or failure - of the new Beretta and Corsica compact cars could determine the future of General Motors' largest division, Chevrolet. How the new models do could also influence the direction taken by the automaker's four other car divisions.

Since the beginning of the decade, General Motors' share of the new-car market has plunged from about 50 percent of all American-made cars to just over 41 percent last year.

Analysts list a variety of reasons when asked why GM has fumbled, including increasing foreign and domestic competition. But simply put, many say, American new-car buyers are rejecting GM's decision to market a host of look-alike models.

``GM has been using common platforms with very little differentiation in sheet metal in cars sold by its separate divisions,'' says John McElroy, auto analyst and editor of Automotive Industries.

``The only things they've allowed the divisions to play around with are the front ends - the grilles and the headlights - and the lights on the rear end.''

The problem was driven home by a cover story in Fortune magazine that pictured side by side the midsize cars sold by four separate GM divisions. From the photo, it was almost impossible to tell which model was which.

The only automobiles unique to each division have been specialty models, such as the Pontiac Fiero or Chevrolet Corvette sports cars. At least that was so before the arrival of the new $8,995 Chevrolet Corsica 4-door sedan and its cousin, the $9,555, 2-door Beretta coupe.

Though these compacts use many of the same mechanical components found in GM's subcompact J-cars, such as the Chevrolet Cavalier, and the N-car compacts, such as the Pontiac Grand Am, their ``skins'' and interiors are sharply different from any other GM products.

Sales projections call for volume of these new compacts to reach 500,000 annually, or 20 percent of total Chevrolet car sales.

``The Corsica and Beretta should turn out to be benchmark cars for us, right alongside the 1955 Chevy,'' Robert Burger, Chevrolet's general manager, proclaimed at their introduction early this month.

William Pochiluk, an auto analyst with Autofacts Inc., agrees that the Corsica and Beretta ``are extremely important, because it is in the middle of the market, and that is where Chevrolet's largest customer base is,'' and where Chevy and GM have been facing a steady erosion of market share.

General Motors virtually abandoned the true compact segment several years ago when it stopped production of its troubled X-cars, such as the Chevrolet Citation. Some sales spilled over to the J- and N-cars, but a good number of potential buyers defected to other carmakers.

The Beretta and Corsica have so far received strongly favorable reviews from analysts like Mr. Pochiluk and in the popular automotive press. An article in the current issue of Car and Driver compares the high-performance version of the Corsica with a number of import competitors.

But looks and performance are not necessarily enough to help Chevy regain dominance in the compact niche.

While its styling limitations have hurt GM's sales, so have the quality problems that have accompanied the launches of several recent vehicles, including the new Buick Riviera and several Cadillac models. So to avoid damaging the cars' reputation, Chevrolet is sacrificing some early sales to keep production problems in check.

The two Corsica and Beretta factories, in Wilmington, Del., and Linden, N.J., are being brought up to full-speed production at an excruciatingly slow pace. No more than about 200,000 of the cars will be built this year, about 40 percent of the plants' capacity.

The company also issued some of the vehicles in advance to major car rental companies to see how they held up under such demanding conditions.

If, as many analysts expect, the two cars do curry the favor of consumers, the big uncertainty remaining is where those sales will come from.

``We expect them to bring back the customers who've been going elsewhere for the compact type of car,'' Mr. Burger says, referring in particular to the increasing number of Japanese products in this market segment.

But not everyone is so certain.

Michael Luckey, auto analyst with Shearson-Lehman Brothers, says the cars will ``cannibalize sales of other Chevrolet [and GM] products, especially the J- and N-cars.

Most analysts believe it is unlikely that more than a small percentage of Corsica and Beretta sales will be so-called ``conquests,'' buyers who will trade in Toyotas, Nissans, Fords, or Chryslers.

Even so, if the Chevy compacts do sell at or near capacity, they will deliver a strong message to GM officials: that American car buyers are looking for vehicles that are virtually unique, and which do not require the beholder to study minor headlight details to determine whether they are viewing a Chevrolet, Buick, or Cadillac.