Impala’s Leap Points to US Car Rebound

Once a muscle-car icon and a symbol of U.S. automotive dominance, the Chevrolet Impala had more recently seen its image suffer. Bloated and generic, the critics said. More suited for the rental car fleets that accounted for most of its sales.

Consumer Reports three years ago panned its sloppy handling and second-rate fit and finish.

So it marked a stunning turnaround when the Impala in July secured the influential magazine’s top overall rating among sedans – a distinction held by Japanese and European models for at least two decades. Posting the third-highest score ever, the Impala ranked behind only such distinguished company as the Tesla Model S and BMW 135i.

The critical acclaim is emblematic of a resurgence by U.S. automakers in sales, profits and consumer perceptions of quality and imaginative design. General Motors Co. and Ford Motor Co. each posted second-quarter profits of $1.2 billion, numbers not seen since before the Great Recession and GM’s bankruptcy and bailout.

Recently redesigned models such as Ford’s Fusion sedan and Chrysler’s Ram pickup truck are proving a hit with critics and consumers, said Jake Fisher, director of automotive testing for Consumer Reports.

“There are no more excuses,” he said. “They can make world-class cars.”

Finally, the domestic automakers are focusing on exterior and interior design instead of just hitting sales targets, often with the help of fleet sales, said Alec Gutierrez, an analyst at auto information company Kelley Blue Book.

The improvements are paying off in sales and profits, Gutierrez said. The city of Detroit is in bankruptcy, but the domestic auto industry is booming.

The turnaround has come surprisingly quickly: The recession nearly ruined Ford, and toppled GM and Chrysler Group into bankruptcy restructurings.

Sales are robust. Through the first half of this year, the Detroit automakers sold 3.6 million vehicles in the U.S., a 10.3 percent gain from the same period last year. And they have grabbed a full point of market share from the big Asian brands, according to Autodata Corp.

The Big Three are spending some of the new revenue on a hiring binge.

GM has added almost 6,000 U.S. workers in the past six months. Chrysler has added 17,000 U.S. workers since emerging from bankruptcy in 2009. In July, Ford said it will hire about 3,000 salaried workers this year, about 800 more than it had projected in February.

The restructurings at GM and Chrysler, as well as labor agreements that help Ford, are contributing to the industry’s success, said John F. Hoffecker, an auto-industry consultant with AlixPartners.

“Now they are in a much more level playing field with their global competitors,” he said, and that’s given the car companies the revenue and breathing room to develop better vehicles.

But domestic automakers still face significant challenges, said Christian Mayes, an auto analyst at financial firm Edward Jones.

“No doubt they are in a better financial position than they were before the downturn,” he said, but they need to continue spending heavily on developing new models.

Their Japanese competitors have a financial edge right now because of the slide in the value of the yen, which makes the U.S. sales of those import brands more profitable. They’re using that advantage to add features and offer discounts on the cars they sell overseas, a trend that will probably show up on U.S. shores, Mayes said.

Cars such as the Impala could blunt those advantages, analysts said.

The Impala proved a huge hit for Chevrolet after its introduction in 1958. By 1965, the car had shed its garish tail fins and morphed into a sleek, square icon of the muscle-car era. Chevrolet sold 1,068,614 Impalas that year, making it the bestselling car in the U.S. Nearly 1 in 10 cars sold in the U.S. that year were Impalas.

But during the 1970s, the Impala went the way of most American cars, as GM got clobbered by rising foreign competition and demands for decreased air emissions and increased fuel economy. The Impala grew smaller, less distinctive and much less powerful. The muscle-car era had passed. Sales dwindled during the latter half of the decade and into the 1980s. The Impala nameplate was retired in 1985. It wouldn’t return until the 2000 model year.

By last year, GM was selling 80 percent of the Impalas it produced to rental car companies and fleet customers. Consumers didn’t want them.

Now GM is hoping that the new Impala regains some of its former stature.

“The Impala with LTZ trim compares well with the Lexus ES 350,” said Dave Sullivan, manager of product analysis for automotive consulting firm AutoPacific Inc.

Sullivan said driving the new Impala was one of the biggest surprises he has experienced in years of testing and evaluating new models.

“My expectations were pretty low, but it far exceeded anything I thought GM was capable of doing,” he said. “It is probably the best product they make right now.”