GM Pins Big Hopes on New Chevy Cruze

It was a busy day in Ohio on Wednesday. While President Obama was speaking on the economy and fall elections in suburban Cleveland, about 50 miles east General Motors officials were unveiling the first Chevrolet Cruze small cars to roll off the assembly line in Lordstown.

Fittingly, the first three models to make their debut were red, white and blue, signaling the rebirth of the Detroit automakers' entry into the compact car segment.

"The Cruze is the finest compact car GM has ever made, period," GM North America President Mark Reuss, told a crowd estimated by GM at about 2,000, according to The Detroit News.

Starting at Under $17,000

GM has placed big hopes on the new Cruze, which replaces the underwhelming Chevrolet Cobalt, a model that had a hard time competing with the likes of Toyota Motor's (TM) Corolla and Ford Motor's (F) Focus, new versions of which are due in coming months.

The new Cruze arrives in dealer showrooms this month with sticker prices starting at just under $17,000 for base models.

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In addition to reviving GM's image, the Cruze is an important piece of the automaker's vehicle sales mix. With the ability to achieve 36 mpg on the highway, the Cruze can help boost the company's overall corporate average fuel economy, offsetting less fuel efficient trucks and large SUVs.

A even more gas-stingy Cruze model goes on sale in November. Called the Cruze Eco, it has a manual transmission capable of giving the car 40 mpg on the highway through the use of light-weight materials and other enhancements, GM officials have said.

While stressing gas mileage, GM is also promoting upscale options found standard in the Cruze, such as an upgraded interior and power windows, as well as safety features that include 10 air bags and antilock brakes.

Though GM hopes the Cruze will compete head-to-head with the Corolla as well as Honda Motor's (HMC) Civic -- two of the most popular compact cars in the U.S. market, the automaker hasn't yet released sales goals. While Toyota and Honda recorded about 20% of their U.S. sales volume from small cars last year, GM saw less than half that percentage.
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