Detroit News April 15, 2005



This may be the vehicle that the ailing General Motors Corp. -- and its even more troubled Pontiac brand -- have been waiting for.

GM is to start taking orders on its Pontiac Solstice two-seat convertible today at 2 p.m., after an expensive and splashy launch on NBC's Thursday night "The Apprentice" show. The first 1,000 vehicles will have exclusive badging and a certificate of authenticity.


Chrysler Group sponsored the popular reality show last year but pulled out because the asking price rose too high -- at least $50 million, Advertising Age magazine reports.


But GM's Pontiac decided to pony up an undisclosed amount to promote its hot new convertible on the show aimed at young professionals.


GM has recently released a series of vehicles that have, arguably, received a lukewarm response in the marketplace, such as the Buick LaCrosse and the Pontiac G6. So the edgy Solstice could be the shazaam the sore GM has been seeking.


While the Solstice will be a low-volume vehicle, and GM won't reveal its sales goals, the design is undeniably bold and emotional. More importantly, the starting price of $19,995 might be just right. The vehicle is expected to hit showrooms this summer.


"I think the pricing point is very, very attractive," Jesse Toprak, director of pricing and market analysis at the automotive Web site Edmunds.com, said. "I think it's going to do very well. ... It will be one of the factors to help GM's brand image and capture the young buyers they so desperately need."


GM has recently been criticized for developing unenthusiastic products, pricing them too high and then heaping on hefty cash back to sell them, a move that destroys brand image, resale value, and ultimately, sales and profits.


But the low price on the new Solstice undercuts all the competition in the two-seat convertible category.


Long one of the GM's pricing critics, Toprak said the world's largest automaker got it right this time, so right, in fact, he made this bold prediction: "We think the initial selling price might exceed the MSRP, at least for the initial months." MSRP is the manufacturer's suggested retail price.


And, yes, you heard that right: Edmunds said the Solstice could be so hot that GM might not need incentives, and it might even sell above sticker price for awhile.


Selling above sticker is a high compliment, especially in today's dog-eat-dog auto market. In recent years, only a few vehicles have accomplished that feat, Toprak said.


The lauded Chrysler 300C sold above sticker price in some markets after its initial release. So did the Ford GT, which has been selling for about $231,000, well over its $139,995 sticker price. The Mercedes-Benz SLR McLaren sells for about $87,000 over its $450,000 sticker price. The trendy Toyota Prius hybrid and PT Cruiser have also sold above sticker.


Next week, GM expects to report one of its worst quarters in years, a loss of nearly $1 billion, and its stock has been lurking at 10-year lows. At the same time, GM's share of the U.S. market slipped to 25.7 percent in the first quarter of the year, from 27 percent a year ago.


The Pontiac brand hasn't helped. Rather, it's been one of the anchors helping to sink the world's largest automaker. Pontiac sales for the first quarter of the year were down 17.1 percent compared to the same quarter a year ago.


Last month, GM Vice Chairman Bob Lutz said the automaker could not rule out eliminating one of its more damaged brands, such as Pontiac, if sales don't turn around in the next few years. "We'd have to look at a phase-out," Lutz said in response to questions at a conference in March.


The GM executive later explained he was speaking only hypothetically and that the automaker had no plans to eliminate a brand.


Toprak said GM would be wrong to have Pontiac first in line at the chopping block, citing other divisions he would kill first. "They have so much money invested in Pontiac advertising and product right now," he said, "it would not be viable to kill Pontiac at this point."


Mark-Hans Richer, the marketing director for Pontiac, who also oversaw the much-hyped Pontiac G6 giveaway on the "Oprah Winfrey Show," said he hopes to reposition Pontiac as a progressive, performance-oriented nameplate. While the brand will have a rebellious edge, he said it won't be of the macho Dodge variety.


To that end, he said, Pontiac's competitive targets are Nissan and Mazda.


Pontiac, Richer said, will be for performance-oriented consumers who don't want to be like everybody else, but are also more sophisticated than the bling-bling set.


"We wouldn't be taking all of these risks if we were planning on going out of business," Richer said.