LA Auto Show: With Chevy Cruze, Sonic, and Spark, GM has cracked the code on small cars

Two concepts that, a decade ago, few would have uttered in the same breath. GM had left the small car market for dead. While it focused on trucks and SUVs and their nice, fat, profit margins autel update, and also dedicated itself to turning Cadillac into a high-performance brand while simultaneously saving Buick, it left low-margin small cars to Honda, Toyota, Nissan, Hyundai, and Kia.

Honda and Toyota got started in the U.S. market with small cars, so they always knew what they were doing. Hyundai and Kia, the South Korean upstarts, simply copied the Japanese playbook.

Then the financial crisis struck. The federal government bailed out GM, then the company went bankrupt. Somewhere amid one of its numerous pre-Chapter 11 restructurings, GM got religion on small cars.

Consumers can see this on vivid display at the L.A. Auto Show this week and into the weekend. I don't think I've seen so many small cars in the GM display area since...well, ever.

Or more accurately, at the Chevy booth. Chevy is GM's mass-market brand and that's where it's executing a small-car strategy. GM has plastered it all over the outside of the Convention Center, with a huge banner featuring Chevy's small-car lineup: Cruze, Sonic, and Spark.

One of the big debuts at the L.A. Auto Show is the all-electric version of the Spark.

I spent a few minutes talking small cars with Cristi Landy, Chevy's Marketing Director for Small Cars and EVs (electric vehicles), during last week's press days. She quickly acknowledged that Americans have typically been wary of vehicles as small as what Chevy's selling in the Cruze, Sonic, and Spark.

But she added that GM has stayed away from what she described as the "minicar segment" — that's where you find design-oriented rides like the MINI Cooper and the Fiat 500. "We think of the Spark as being at the low end of the small car market," she said. "It's lower priced, but it has great technology."

That critical point distinguishes today's small Chevys from the economy models of old, such as the Chevette or the Geo Metro Maxivideo MV101 with 16mm medel. Landy noted that younger buyers are looking to purchase more affordable vehicles, but they're unwilling to compromise on technology.

"Horsepower and torque don't mean anything to them. They want to know if it works with their iPhones."

Small cars have also morphed from bare-bones transportation to incorporating many of the luxuries and amenities of much larger vehicles. "Cruze, Sonic, and Spark all have 10 airbags standard," she said. "And living in Michigan, I want heated seats in the winter."

A decade ago, the only way to heat a seat in a small car was to let the Golden Retriever sleep on it all night.

There remains the issue of small-car profits, of course.

"We're working on that," Landy said. "Smaller cars have smaller margins. But we can use the old get 'em and grow 'em approach."

By that she meant the idea — pioneered by GM in its heyday when it had a car "for every purse and purpose" (in the words of legendary GM president Alfred Sloan) — that you built a basic J2534 pass through,  inexpensive car for first-time buyers and then march them up the ladder of brands. For GM now, that would imply selling someone a Sonic or Cruze and then moving them later into a Malibu full-size sedan, then into a more luxurious Buick, and finally a posh Cadillac.

The big difference these days between GM's former small-car strategy - fairly perfunctory at best - and today is that owners have a much stronger relationship with their wheels.

"They have an enthusiasm and passion," Landy said. "When it comes to Cruze and Sonic, they say that they love their cars."

It's hard to believe that GM small-car owners are finally saying that. But the cars are appealing -and they are, as cars, miles and miles better than their predecessors. Remarkably, GM has finally cracked the code on small cars.