GM Plans to Sell Utility Vehicle Inspired by the Suzuki Samurai
General Motors, seeking to cash in on the extraordinary popularity of the Suzuki Samurai utility vehicle among college students and other young buyers who tend to shun domestic cars, plans to sell a slightly larger version of the Samurai beginning next year, GM and Suzuki officials said Monday.
GM’s version, to be called the Chevrolet Tracker, will carry a slightly higher price tag than the Samurai, and it is likely to appeal to a slightly older crowd when introduced in the fall of 1988.
But GM still hopes to make a dent in the surging market for bare-bones mini-utility vehicles--a niche that Suzuki effectively created when it introduced the Samurai in November, 1985.
“I think GM should do well with the Tracker,” said John Hammond, an automotive analyst with J.D. Power & Associates, an automotive marketing-research firm. “It’s in such a new market segment that GM will still be getting in on the leading edge.”
Both GM and Suzuki will sell versions of the Tracker. Suzuki’s model, which will be sold alongside the Samurai, has not yet been named. Initially, the vehicles will be imported from Japan, but a GM-Suzuki joint venture plant in Canada will begin producing them when it opens in November, 1988, according to Doug Mazza, general manager of Suzuki of America, Suzuki’s U.S. sales arm.
Cousin of the Sprint
The Tracker will be the second Suzuki product in GM’s model lineup. GM--which owns 5.3% of Suzuki--already imports the subcompact Chevrolet Sprint from Suzuki and it now sells more Suzuki-built products in the United States than does Suzuki’s own American sales arm, which currently offers only the Samurai.
It’s easy to see why GM is attracted by the Samurai, a sales success in the midst of a very sluggish market for both imports and domestic products. Suzuki expects to sell 75,000 Samurais in 1987, up dramatically from its first-year volume of 47,732 in 1986.
But more importantly for GM, the Samurai appeals to the kind of very young, upwardly mobile consumers who have been put off by GM’s more traditional cars and light trucks. According to a 1986 survey by Suzuki, the average Samurai buyer is 29 and earns $36,300; Samurai customers are also concentrated in the Sun Belt, where Detroit has been hurt the most by imports.
No Direct Competition
One reason the Samurai has been so successful is that it still doesn’t have any direct competition. It is smaller than most Jeep-type utility vehicles and has a rougher ride, which attracts young drivers.
And it’s a lot cheaper than anything else in the sport-utility market. Although its price has gone up nearly $1,000 over the past 18 months because of the rapid appreciation of the Japanese yen, the Samurai’s $7,495 base price is still far below those of its rivals, which range from about $10,500 to $18,000.
In fact, analysts say the Samurai competes more directly with inexpensive subcompacts than it does with higher-priced light trucks and utility vehicles. “The market that the Samurai is in is very price sensitive, and it’s competing mostly with low-cost cars from the Third World,” said Hammond.
But the Samurai won’t be alone for long. Over the next two years, the mini-utility vehicle market will start to get a little more congested. Daihatsu Motor Co., a small Japanese auto maker, plans to introduce its Rocky utility vehicle in late 1988, at about the same time Chevrolet will introduce its Tracker.
Meanwhile, GM is apparently on the verge of getting yet another low-cost utility vehicle, this time from the Third World. San Fu Motors of Taiwan has just started to produce the Isuzu Trooper utility vehicle for export to the United States and Canada under contract with Isuzu of Japan and GM, which owns 38.6% of Isuzu. Isuzu already sells Japanese-built Troopers here, but both Isuzu and GM will now sell the Taiwan-built version in North America.
Isuzu is likely to sell the Taiwan-built Troopers in the United States, while GM will sell them only in Canada. Isuzu said it has expanded Trooper production to Taiwan because of a shortage of factory space in Japan, but also in part to avoid Japan’s high manufacturing costs, which have soared as a result of the yen’s rise.
