Autoblog

Ed Peper (cont.): So we had a great start Saturday night and then we got to the hall here in Detroit yesterday morning and were fortunate enough to win the North American Truck of the Year award for Silverado, and also, Saturn won with the Aura as Car of the Year. This is the first time General Motors swept both of those very prestigious awards, and then we introduced the Chevy Volt concept vehicle. That has been one of the hits of the show and one of the most talked about vehicles that we have out there. An electric vehicle concept that will actually run after the batteries or the charge goes down a little bit -- which will run on either a gasoline engine or potentially a hydrogen fuel cell and continue to pump energy back into those batteries and get amazing fuel economy. In some cases, if you just drove 40 miles in a day, you wouldn't need any gasoline at all. And so then we top it off tomorrow morning (Tuesday, 1/9) and introduce the new Malibu to the marketplace, which will be one of our most significant announcements for Chevrolet in years.


Autoblog: Getting back to the Volt for a second: One of the discussions we had internally was over whether you guys ever consider using a diesel engine as the powerplant.

Ed Peper: Well that powerplant can be provided, because we wanted to use it globally as a product. You can potentially use biodiesel fuel, you can use E85, you can use gasoline, you could use hydrogen fuel cells. There are a variety of ways to provide fuel to that engine and absolutely one of the things we would be looking at would be diesel.

Autoblog: How production feasible is the Volt set up? Is it something that's really being seriously considered or is it just a pie-in-the-sky concept?

Ed Peper: Oh no, it's definitely being very seriously considered, but obviously there are a lot of factors involved, you know, with a vehicle like this. There are batteries, and (the question of) what kind of batteries you can get that might allow for greater than a 40 mile driving range, and there really aren't any out there right now in the marketplace.

Also, we have to look at what is going to happen with hydrogen fuel cells. We're going to do a huge test at the end of this year. We're going to try 100 Equinox fuel cell vehicles in Southern California and in the New York area and we are going to give them to consumers and media and celebrities and get real time feedback about hydrogen fuel cells. It is really important that the only by-product when you use hydrogen is water, and we think that's another important fuel-saving technology that we can develop. So we have a lot of things on the drawing board.

This particular one is not a short-term issue, but the reason Chevrolet was selected to do the Volt was because we're a big volume brand and a mass market brand and I think ultimately, you know, we have to find a solution for consumers -- for our children and our children's children in terms of what they are going to drive in the future to help save the environment.

Autoblog: Let's get back to the trucks for a moment.

Ed Peper: Sure.

Autoblog: Obviously the Silverado won the two big awards this week (International and North American COTY). Toyota has also pulled the wraps off their Tundra CrewMax.

How does GM perceive the threat Toyota presents in that segment. Obviously, Toyota is very serious about going after the domestic truck makers. How confident are you that you have the right product to fend them off?

Ed Peper: Well, winning the award yesterday for North American Truck of the Year when you have a panel of 49 journalists that independently decide if your product is the best in a particular segment. That really helps, but in addition, we have been selling trucks and pickup trucks for a long time. We sold 636,000 Silverados last year and we have had a very, very strong truck brand in Chevrolet that we have had for some time and we're going to continue to build on the strength of that brand. We have got an even more improved product.

Our previous product also sold great. We gained share last year in the full-size pickup segment in the with a six-year-old truck so we've got a great brand name. We have excellent and enthused owners who are out there – and you can't cultivate owners overnight – and we have cultivated this truck brand for a long time. We have a new advertising campaign that we've really tried to connect with our consumers out there to remind them this is what happens in our country and this is the truck that so many of you used for so long. For almost 90 years you have used our trucks and we are going to continue to really be aggressive. There are always competitors coming in and out of the marketplace though in various segments and you have to have the best product and best value and you can compete.

Autoblog: Speaking of the new truck platform: obviously, you have the GMT900 SUVs out on the floor, including the new hybrid versions of the Yukon and Tahoe. You state that it's good for a 20 – 25% improvement in fuel economy. Discuss how that translates into real numbers for our readers.

Ed Peper: On the highway, you're looking at 4 to 5 mile per gallon improvement in fuel economy. The current rating of 22 miles per gallon on the highway (5.3L V8, 2WD) with that vehicle is very impressive for a full-size utility. We have the best fuel economy in that segment by far, and I think that's very, very important to people.

Autoblog: Obviously, the cost of fuel has been an issue of late, and that has clearly impacted the large truck and SUV segment across the board. With that in mind, do you have any volume projections for the hybridized SUV's?

Ed Peper: No volume projections at this point. I think it's probably going to be around 10 to 12 percent of sales. We – we can give you maybe a little bit more accurate number. Obviously, if there's more interest, we can ramp up production.

Autoblog: Let's change gears and talk performance. Obviously, there's Corvette, but let's stay away from that for the moment and focus on the Camaro. You've already mentioned the convertible concept which obviously telegraphs your intent to do a production version.

Ed Peper: Yes.

Autoblog: The styling's been a hit for both the coupe and the convertible. How closely are you looking to match the concept's styling -- especially the interior -- on the production version of the Camaro.

Ed Peper: It's going to be very, very close. I have seen the production coupe, and if you saw the two of them side by side -- the production coupe and the concept coupe we introduced last year -- you wouldn't be able to tell the difference. It is very minute. I mean, obviously you have to make some exceptions when translating a concept to production, but it's going to be very, very close. This is not like a wild concept that we come back and can't realistically build the same sort of vehicle for production. No, it is going to be very close.

Autoblog: Have you guys arrived at a final decision for the top powertrain?

Ed Peper: No, not yet. We will have a V8, a couple of V6s -- you know, we'll have a fuel efficient V6 and we'll have a high performing V6 and we will have a high performing V8 but we haven't settled on the engine in that yet.

Autoblog: 500 horsepower appears to be the magic number with the musclecars that the other manufacturers are coming out with, so is that your target?

Ed Peper: Certainly we haven't made a decision yet, but it's in our scheme – it's in our scheme of thoughts, yes.

Autoblog: Is there concern about stepping on the Corvette, power-wise?

Ed Peper: No. Because again, the capabilities of a Corvette are world class. I mean, we are talking about a vehicle that competes in the American Le Mans Series with Aston Martins and all –no, there is no concern because what the Camaro is going to be is what it has always been, which is a really great looking vehicle that will have a muscle car or muscle car set of derivatives with it, but that will also have a fuel efficient version. It's a vehicle that you really, really can drive every single day -- a four seater and so forth, while Corvette is in a class all by itself. It's one of our ultimate brands at the company that just continues to do well. We try to keep the production, you know, in line and not build too many so it keeps a very strong demand. The Z06s are some of the fastest turning vehicles that we have.

The dealers just can't get enough of them and, you know, we intentionally in some ways want to keep it that way because we want to make them very, very tight and hard to get and that is what builds a really strong brand.

Autoblog: The Viper has 600 horsepower now, so what's the plan for Corvette?

Ed Peper: We're looking at some things going forward. I can't talk about them right now, though.

Autoblog: Fair enough. You brought up the American LeMans Series. Talk about the importance of the research that goes into the C6.R and how it gets put back into the regular Corvette and, in particular, the Z06.

Ed Peper: Achieving the endurance required to run a race car like that for 24 straight hours teaches us all kinds of lessons. There have been many, many things we've learned from the racetrack that we've incorporated into the regular production vehicles, absolutely, so it's very important.

Autoblog: The new Malibu will be unveiled tomorrow (Note: full coverage & photo gallery of the Malibu unveiling here). It's about as big a change as you can get compared to the current Malibu, which is not the most stylish vehicle around. The Malibu that's coming shares its basic architecture with the Saturn Aura and Pontiac G6. That said, it's very much its own car. Talk to us about the thought process that went into bringing about this new Malibu and how GM has, in general, managed now to differentiate the styling of those three mid-size sedans.

Ed Peper: Yes, that's the Epsilon platform you're referring to. If you look at a Saturn (Aura) or you look at the new Malibu, you see that there's no shared sheetmetal at all. You will see a completely unique vehicle and when you look at the interior of this car, it's completely different as well.

Autoblog: Tell us some more about the interior.

Ed Peper: The fit and finish of the interior materials on this vehicle, is probably one of the finest executions we have ever done. Combine that with its classy looks and good handling and our fuel economy, which, if it's not the best in class, we tied for best in class. Those are all things that, you know, midsize car segment intenders are looking for, uh, we're – we are going to make a real statement with this vehicle. It is going to be a huge seller for us.

Autoblog: The two tone interiors – do you see them as being a sort of heritage element in a modern car?

Ed Peper: Not so much heritage. It is actually more of a modern, future trend. (Cadillac General Manager) Jim Taylor talked about it today with CTS about looking at Coach purses and all these different things; if you look at these interiors and how they are stitched and how they're finished, it's really different for us.

This is not a plain Jane interior. This is really fashionable and we are going to make that point with this vehicle. Its exterior looks supreme and the interior is like a luxury vehicle. The ride is the best in a midsize class sedan and we hope to do all that for under $20,000.00 as a starting point.

Autoblog: Another differentiation you guys are going to offer is the Ecotec four-cylinder with the six-speed transmission. As you've pointed out in your press materials, this the only midsize that will offer such a combination. What kind of volume are you predicting for that, as it's obviously going to be the most fuel efficient powetrain at launch.

Ed Peper: From a segmentation standpoint, it may well be up there in the 60 to 65 percent range the four cylinder with best fuel economy but you know, again we are going to be able to gauge that and either back it off or ramp it up a little bit. I think folks in the midsize class -- they want to kind of have it all and they would like to have the fuel economy as well. Our six-cylinder edition will get really good fuel economy, too but the four will be even better if they really want to do that.

Autoblog: There's a plan to do a hybridized version like Saturn's Aura Green Line, correct?

Ed Peper: Yes, absolutely. There is. It will be out very shortly after we launch the vehicles in the fall. In fact, two to three months later we will have a hybrid version of Malibu.

Autoblog: Let's get back to sport and performance vehicles again. One of the debuts you have on the floor is the Equinox Sport. With that, you've transformed the whole character of Equinox because you swap out the 3.4L V6 -- which is not powerful -- and replace it with the 3.6L V6 used in Aura and Malibu.

In the past, that's something that Chevy would have probably put an SS badge on. Talk to us about the plan for Chevy to reinvigorate the SS brand because it has been widely used and admittedly, the SS brand has been diluted because of its use on vehicles that don't necessarily deserve it.

Ed Peper: Yeah, there are four absolute criteria in terms of ride, handling, horsepower, braking. These are the things where there's a certain threshold that you have to be above. For example, with the Equinox Sport, there's certainly more than enough horsepower. It is like 263 horsepower but it might be just a little bit shy in some of those other areas and we have a very stringent criteria for SS going forward and if it does not meet all the criteria, it is not going to be an SS and we have been really -- all of us on the team, this is from Bob Lutz to the designers to the guys who market and sell them like we do -- it has to meet a certain criteria to be SS and you are right. There are probably a few vehicles in the line up right now that have an SS badge that, you know, if we used the same criteria might not be SS.

Autoblog: And going forward, we could see a changeover from SS to Sport on some vehicles to bring them more in line with that philosophy?

Ed Peper: Absolutely. You'd have a regular model. There may be, you know, an SS and something in between that isn't as extreme as an SS but it is a performance-oriented, sportier step up.

Autoblog: Now, Impala is clearly a big seller for the Chevy brand...

Ed Peper: Tremendous.

Autoblog: ...along with Cobalt...

Ed Peper: Yes.

Autoblog: ...but Impala is obviously due for an update and you are going to switch over to rear drive. When is-- and I know you may not be able to say -- but when is that due?

Ed Peper: There is a lot of conjecture – there is a lot of conjecture about that.

Autoblog: Can we expect to see something this auto show season?

Ed Peper: No. I would say very possibly next auto show season, and it probably would be something we would highlight, I am sure. That would be my sense of the whole thing. But you know on the current Impala, the sales are up 25 percent for the year. We sold a bunch of them, and have done extremely well with it. It has been a real good-looking, solid car with great fuel economy. It delivers great value and that's what we're all about at Chevy. Every segment where we compete, whether it's Cobalt, whether it's Impala, whether it's Silverado, Tahoe -- we want to provide the best value in every segment where we compete. That's our goal. You know, we attack the marketplace.

In fact, if you look at our midsize car lineup together -- if you combine Malibu and Impala --sales are astronomical. You're in the 400,000-plus* range.

Autoblog: That's about all we've got time for. Ed, thank you for taking time out to speak to us.

Ed Peper: My pleasure. Good to be with you.

*Editor's note: Impala/Malibu combined sales for 2006 were 453,721.