GM unveils car marking return to Japan manufacturing for first time in six decades

Monday, October 22nd 2001, 12:00 am

By: News On 6

TOKYO (AP) _ General Motors Corp. marked its return to manufacturing in Japan for the first time since 1939 by unveiling on Monday the Chevrolet Cruze _ developed with local partner Suzuki Motor Corp.

After years of struggling to sell American-made cars in Japan, General Motors is embarking on a new strategy of working with Japanese partners to gain a foothold here. GM owns 20 percent of Suzuki, 49 percent of Isuzu Motors and 20 percent of Fuji Heavy Industries, the maker of Subaru cars.

``We are taking a different tact,'' said GM Chairman Jack Smith. ``We will still import name brands from the U.S. market, but they are not going to give us the kind of numbers that we should be doing.''

Cruze looks like a Chevrolet, with the golden cross logo prominently in the front, but its 1.3 liter and 1.5 liter engines are designed and made by Suzuki and will be produced at a Suzuki plant in central Japan. GM and Suzuki are hoping to sell 20,000 Cruze cars in Japan a year.

The car will roll into Suzuki and GM dealers in Japan on Nov. 1, starting at $9,900, considerably higher than compact cars from Japanese rivals. The Toyota Vitz starts at $7,600.

Based on the production of the Cruze compact car in Japan, General Motors' Japan unit is planning to apply for membership in the Japanese Automobile Manufacturers Association, an influential industry group, GM Japan President Mitsuru Sato said.

JAMA includes Toyota Motor Corp., Honda Motor Co. and other Japanese automakers, but no foreign automakers. JAMA spokesman Satoshi Honda said the group has not yet made a decision on GM's membership.

Sato acknowledged the GM's Chevrolet has an image problem in Japan as an overpriced gas-guzzler. But Chevrolet will grow into a major brand through alliance products like the Cruze that respond better to Japanese needs, he said.

Analysts said GM will remain an underdog in Japan.

``Cruze is not a product with any outstanding features in a very competitive segment,'' said Toru Shimano, analyst with Okasan Securities Co. in Tokyo. ``GM's situation is not likely to change soon.''