• by Karl Greenberg , January 7, 2008

General Motors' ad push for the 2008 Chevrolet Malibu says the highly touted vehicle is a car American consumers can't ignore. That may be true, but they also can't get them.

The company conceded this week that the Camry fighter is in short supply. While that may be salubrious news for the No. 1 automaker's efforts to make a mainstream sedan that can sell at MSRP, it's a big problem for marketing.

Some analysts say the shortage of product in showrooms reflects the kind of blood-brain barrier between marketing and production: The launch came with a $150 million awareness-building ad push starting in the fall, but dealers must hope consumers hold out until spring.

According to Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, the company won't be able to meet demand until then. GM is counting on the car, which went on sale Nov. 1, to conquer buyers of vehicles like Honda Accord and Toyota Camry.

Toyota sold close to half a million Camrys last year in the U.S. General Motors says sales of Malibu were 128,312 this year--a 21% drop versus last year, which GM says reflects fewer rental sales. The company says retail (excluding rental) sales of the Malibu were up nearly 100% in December. GM sold 12,172 of both the old and new Malibus in December versus 11,406 during the month last year.

Says Todd Turner of Car Concepts, Los Angeles: "The car is selling okay but they have a long way to catch up" because, he says, GM missed the September/October launch window for the new car, it didn't have them in showrooms and had meanwhile sold down existing inventory of the older 2007 model.

Robert Farago, who publishes TheTruthAboutCars.com, says GM doesn't have the luxury of dangling consumers until spring.

"They created demand, and there are no cars to satisfy it," he says. "That's fine if it's an iPhone or a niche vehicle like a Toyota Prius, but not for a mass-market vehicle."

He argues that the problem is exacerbated by the fact that Honda launched a new Accord in the fall. "There are loads of them on the ground now, in different sizes, engine specs, options. Consumers will go elsewhere. And they will, even customers who are in the GM fold."

George Magliano, head of automotive industry research at Waltham, Mass.-based Global Insight, agrees that the key is when GM will have the cars on the ground. "Sure, it's good that you come out and there's more demand than supply--it's a good sign--but that can only last so long. This is a highly touted vehicle, but it's not a Porsche 911 Turbo. People won't wait around for it."

Haig Stoddard, who overseas research on North American light vehicle production for Global Insight, says GM will make the early spring deadline.

"They have finally launched them at the Orion [Mich.] production plant, and I think they will be full production by the end of this month," he says. "I don't think it will hurt that much because the end of the year is not the high-volume."

He argues that the company is correct to be volume-conservative because prognosticators see a slow 2008 for car and trucks sales, especially if recession hits. "If things get worse, GM could end up with too much inventory in May," he says.

Says Turner: "Remember, everyone raved about the Saturn Aura, and Saturn is putting $2,200 [in incentives] on it now." He says a strong year for Malibu would be 200,000 "If they don't sell any to Avis. They have the potential to do it with this car. But I want to see that number at 250,000 four years out.

"There are two success targets: one to hit a certain goal with very limited daily rental in first year. But the bigger success is to maintain that through the entire lifetime of vehicle. When you look at Corolla and realize that it sold in its last year as well as it did in first year, that's success."