General Motors Co.'s product chief, Mark Reuss, said the new
versions of the high-volume Chevrolet midsize and small cars will
earn the auto maker $1,500 to $2,000 more "variable profit" per
sale than the models they replace.
Mr. Reuss, speaking to reporters at a product unveiling in
Detroit, said the Chevrolet Malibu and Cruze have better margins
due to better use of the company's purchasing and engineering
scale. Vehicles in the small and midsize car markets often sell at
high volumes, but are generally far less profitable than the trucks
and SUVs that are popular with U.S. buyers.
The disclosure indicates GM may get a solid contribution from
Chevy's bread-and-butter passenger cars in its quest to earn 10%
operating margins in North America. The auto maker is short of that
goal right now, which it has set for 2016.
Mr. Reuss also said GM is moving to an electrical architecture
that will allow vehicle software to be upgraded via the cloud. The
company is experimenting with that technology in some of its
vehicles currently on the road, such as the Chevrolet Volt plug-in
hybrid, but it will eventually be deployed on a larger scale. This
will allow for faster software updates, Mr. Reuss said, and that
will help GM keep up with a technology war that is bubbling up in
the global auto industry.
Over-the-air updates are deployed by some competitors already.
Mr. Reuss said GM has extensively tested the security of its
over-the-air updates, including benchmarking Boeing Co. and the
U.S. military, and is confident the auto maker can keep information
safe, he said.
Write to John D. Stoll at john.stoll@wsj.com
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