GM's Chevy brand puts hopes for global growth on Cruze

GM's Barra unveils 2016 Chevy Cruze

General Motors on Wednesday unveiled the new-generation Chevrolet Cruze compact car, a linchpin of its effort to attract new buyers to the brand and a symbol of the U.S. automaker's competitive challenges.

The 2016 Cruze, which goes on sale early next year, will be larger than its predecessor but about 250 pounds lighter. It will generate $1,500 more profit per car than the old model, GM estimated.

Read More

Cool technology features are aimed at young buyers, including Android Auto and Apple CarPlay to link smartphone screens to the car's dashboard screen. GM sells the Cruze in 40 markets, including the United States, China, Brazil and India.

The more high-tech Cruze is part of a broader product strategy that GM Chief Executive Mary Barra points to when making her case that GM can thrive without taking on a partner, such as Fiat Chrysler Automobiles.

The 2016 General Motors Chevrolet Cruze is unveiled during an event at the Fillmore Theater in Detroit, Michigan.
Jeff Kowalsky | Bloomberg | Getty Images

GM's revamped compact sedan will drive into a crowd of competitors with similar performance, features and functionality in the same price range about $16,000 to $26,000 in the United States.

GM touted the 40 miles per gallon the car's new four cylinder engine should deliver on the highway. This would match the fuel economy rating for Ford Motor's competing Focus model on sale now.

Sales of the current Cruze in the United States, Chevrolet's largest market, lag those of the small car leaders, Toyota Motor'sorolla and Honda Motor's Civic.

Toyota has sold 159,486 Corollas in the United States through May 31 this year, while GM has sold 105,291 Cruzes. Many small and midsize sedans have taken a hit in the United States and China as consumers opt for sport utility vehicles.

GM Executive Vice President Alan Batey, global head of the Chevrolet brand, said Wednesday one of his goals for the new Cruze is to rely less on sales to rental car fleets. While that would dent sales, the expected gain in resale values for the car would help it in the long term, he said.

Batey said Chevrolet will not entirely abandon fleet sales for the Cruze, but going forward "somewhere between 15 to 20 percent is a pretty good number."

Chevy also plans to reduce sales to rental fleets of its redesigned midsize Malibu sedan due to be launched later this year.