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Old 08-14-2006, 01:36 PM   #35
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Toronto Star

Camaro to roar back on scene in 2009
GM to bring back legendary coupe

Oshawa in running to build new model
Aug. 11, 2006. 01:00 AM

The buzz has turned into a roar for the legendary Chevrolet Camaro but some analysts are already wondering whether the growling will wind down to a whimper when the legendary muscle sports car finally arrives in showrooms.

Rick Wagoner, chief executive for General Motors Corp., announced yesterday the struggling auto maker will start selling the Camaro coupe again in early 2009 after a seven-year absence.

The move follows big buzz at the North American International Auto Show in Detroit in January for the Camaro concept.

However, analysts said, among other things, the model could be coming to the muscle car party too late to make any lasting noise in a shifting marketplace.

"There is some serious downside," said auto watcher Dennis DesRosiers.

Wagoner didn't disclose where GM will build the Camaro but its pending flexible manufacturing complex in Oshawa and a sports car plant in Wilmington, Del., are the leading candidates.

Analysts argue it will be difficult for GM because rivals already have a good head start in the small muscle car segment; low and high-end roadsters are cutting into the niche; expensive insurance dampens interest and fuel prices show no sign of easing for the traditional gas guzzlers.

The success of the Ford Mustang in recent years renewed interest by rivals but, DesRosiers said, the number of models will make it tougher to make money.

Mustang sales in Canada and the U.S. topped 170,000 last year. Seeing the potential, DaimlerChrysler reincarnated the Dodge Charger and is bringing back the Challenger in 2008.

Meanwhile, numerous companies from DaimlerChrysler to BMW have introduced roadsters to their lineups in recent years. Those vehicles cater to the particular needs and desires of consumers who might have also considered a muscle car in the past, according to analysts.

In GM's case, the company can't keep up with demand for the Pontiac Solstice sports car. It also produces the popular Saturn Sky. Auto watchers say the Camaro's return will result in some "cannibalization" within the GM lineup of sports cars.

Consumers have also shifted to smaller, more fuel-efficient vehicles because of record gasoline prices in the U.S. and Canada. That continues to reduce the potential for muscle cars, according to analysts.

"Oil prices will likely stay in the $65 (U.S.) a barrel range for the next year or so," said Carlos Gomes, senior economist and auto industry specialist at Scotiabank. "I think it will be somewhat of a head wind for the muscle car segment."

But those factors are not deterring GM. It says the 2009 Camaro version will not only appeal to fans from a generation ago but women and younger drivers.

The car features V-6 or V-8 front engines with up to 400 horsepower, independent rear suspension, manual or automatic transmission and some of the same distinct Camaro styling cues from a generation ago including long hood, short deck and wide stance.

Wagoner said the Camaro, which went out of production in 2002 after a 35-year run, generated an overwhelming positive response with the showing in Detroit and reminded him of the "iconic place our products can have in customers' hearts."

"Camaro is much more than a car," he said. "It symbolizes America's spirit and its love affair with the automobile."

Insiders say the Camaro could be a "halo car" that would help attract customers to other GM models and boost overall sales.

"In that way, it could be very significant for GM," said DesRosiers.

He said sales of the Camaro should easily surpass 100,000 annually in the first two years but the model needs to maintain that level in subsequent years to justify the investment.

DesRosiers, president of DesRosiers Automotive Consultants, said critics question whether it would have made more business sense for GM to invest in big volume models than a niche product like the Camaro, regardless of its halo potential.

GM has not announced the names of the models for the manufacturing complex in Oshawa later this decade.

Insiders say the complex will likely build two or three high volume rear-wheel drive, mid-size models and possibly the Camaro.

GM built the aging Camaro and the Pontiac Firebird sports car at its Ste. Thérèse, Que. assembly plant, but closed the operation in August 2002 because of declining sales.
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