GM unveils reworked Chevy Malibu

DETROIT General Motors (GM) is hoping that a hurry-up makeover of the Chevrolet Malibu will move it from also-ran to a top performer in the key midsize car segment.

The company unveiled the 2014 version of the car Friday, hoping it will catch on in the heart of the U.S. auto market now dominated by Toyota's Camry, Honda's Accord and Ford's Fusion.

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The rapid revamp comes just a year after the current version of the Malibu reached U.S. showrooms. But it shows how increasing competition is forcing automakers to quickly make changes if their cars don't catch on with consumers. In midsize cars, the largest piece of the U.S. auto market, the Malibu looks old when compared with new versions of the Fusion and Accord.

Sales of the 2013 Malibu are down 12 percent through April, while Accord and Fusion sales have risen more than 25 percent. The drop comes even though GM is discounting Malibus more than any of its competitors. In April the average Malibu sold for $23,685, almost $2,000 less than the Accord and Fusion, according to the TrueCar.com auto pricing site.

The 2014 Malibu will reach showrooms in the fall. It will feature a new engine in the base model that boosts gas mileage, more back-seat legroom, a restyled front end, an updated interior and suspension changes that will improve the car's handling, GM engineers said Friday as they unveiled the new model.

The changes are in response to consumers who told GM that the 2013 Malibu had bland styling and a cramped back seat, and its fuel economy wasn't as good as the leading cars in the segment.

GM began work on the 2013 version just before the company went into bankruptcy protection in 2009, said Mark Reuss, the company's North American president. The bankruptcy delayed its development, and even before it emerged from the process, GM began to upgrade styling that wasn't progressive enough to beat the competition, Reuss said.

The quick change, he said, is a sign that the new GM is serious about fixing problems.

"We're not going to sit around and wait for validation in the marketplace,'' Reuss said. "We're going to go right at it.''

General Motors Co. is putting an all-new 2.5-liter, 196-horsepower, four-cylinder engine in the base version of the Malibu. The motor has about the same horsepower as the current model, but it has a new valve system that lets the engine use less fuel under low loads such as freeway driving. The new car also has technology that shuts off the engine at stop lights and restarts it when the driver releases the brake. The changes raise combined city-highway mileage by one mpg to 27. But the base Nissan Altima now gets an estimated 31 mpg, while the Accord gets 30.

Designers also changed the front end to give it a more modern grille with chrome accents and a hood that slopes downward. Engineers also gave back-seat passengers 1.25 inches of added legroom by reshaping the back of the front seats. The chassis and suspension, including new springs inside the front struts, will cut body roll in turns and improve the ride, GM said.

"The ride is completely different from a '13,'' said Ken Althouse, the car's lead development engineer.

The outside of the new car isn't greatly different from the current one, but the interior changes should be enough to get the Malibu on people's shopping lists, said Bill Visnic, senior editor at the Edmunds.com automotive website. Shoppers in showrooms found the interior confusing and were turned off by the cramped back seat, he said.

"In that segment, it could be make or break in the showroom,'' Visnic said.

So far this year, Chevrolet has sold about 71,000 Malibus. Ford (F) has sold over 107,000 Fusions and Americans have bought almost 122,000 Accords.

Normally, automakers wait about three years for updates, with complete redesigns taking place every five or six years. But faster revamps are becoming necessary because of tough competition in many segments of the U.S. market. Toyota (TM), for instance, delayed the launch of a revamped Camry midsize sedan last year to make changes due to competition, and Honda redid its Civic compact just 18 months after it came out, said Larry Dominique, a former Nissan product chief who now is executive vice president of TrueCar.com.

The revamp should help GM avoid heavy discounts, which can cost millions of dollars, Dominique said. "If you don't do it now, you've got four more years of a big problem,'' he said.

GM previously lowered the Malibu's base price $300 to $770, depending on the model, in an effort to spur sales. The move had limited success. GM wouldn't say how much the 2014 Malibu will cost, although engineers said it would be close to the current car, which starts at just under $22,000.

The makeover shows that GM is a more responsive company than the one that went into bankruptcy protection in 2009, Dominique said. Years ago, GM would have kept its factories running without change while selling more to rental car companies and raising discounts, he said.

"I think this is indicative of the new GM, to respond to market competitiveness and improve quickly,'' he said.