DETROIT -- General Motors Co. won't make much money on the all-new Buick Regal in its first year, Vice Chairman Bob Lutz said.
When the Regals hit the U.S. market this spring, GM will import them from Germany. The automaker's plant in Oshawa, Ontario, will take over production in the first quarter of next year.
Making the car in Canada will slash costs, but GM can't abruptly cut the Regal's price once that happens, Lutz said today in an interview at the auto show.
“We have a choice of either pricing it where the Euro-dollar exchange rate would want it priced, which means it would be almost sales-proof, or we forgo any significant profitability until we get the plant going,” Lutz said.
“We kind of picked Plan B because it would be ridiculous to overprice it through the first eight or nine months and then drop the price.”
The high cost to GM also will limit the number of Regals the automaker brings to the United States, Lutz said.
“I really hope that we don't get into this whole thing where the media writes, ‘The Regal is a flop because they've only done about 35,000 in the launch year,' ” he said. “It has to be low-volume … until we can get the plant going.”
GM last posted an annual profit in 2004.