Alexander Alusheff

Lansing State Journal

LANSING – Despite critical acclaim and accolades, sales of the Chevrolet Camaro are down 8% since the Lansing-built sixth generation sports car hit the market a year ago.

“The sports car segment seems to be smaller," said Erin Davis, GM’s Lansing-based spokeswoman. “The market seems to be trending toward the SUV and truck market segment.”

Light trucks, which include crossovers, SUVs and pickups, offer more space and have better fuel economy than before, which make them more attractive to consumers, said Michelle Krebs, senior analysts at Autotrader. Cheaper gas prices have also spurred their popularity.

Across the country, consumers have bought nearly 3 million more light trucks than cars so far this year, according to statistics from the Bureau of Economic Analysis. The last time cars outsold light trucks was in 1998.

Car sales are trending downward from their latest peak of 7.7 million in 2014. Last year, they slipped 2.4% to 7.5 million, according to BEA statistics. From January to October this year, 5.7 million cars have been sold.

It’s not a good sign for plants such as GM’s Lansing Grand River Assembly, which produces the Camaro and the Cadillac ATS and CTS.

GM announced Wednesday that it plans to lay off nearly 850 workers at Lansing Grand River Assembly in January and discontinue the third plant's shift. The plant employs 2,700. Those layoffs are among 2,000 across the company.

"I'm not surprised from what I've seen in the last few years," Krebs said. "(Sports cars) are niche vehicles. The segment has softened a bit. There's the same trend in the luxury market."

In the U.S., Cadillac ATS and CTS sales are down by double digits. Sales of the ATS are down by 17.1% from January to October, sales of the CTS by 16.7%.

"Production all depends on market demand," Davis said.

Bulking up

In August 2015, GM reinstated the second shift at Lansing Grand River for pre-production of the Camaro.

►Related: The Camaro and the comeback for Lansing Grand River

The plant had rehired the 450 people laid off that January when it scaled back to a single shift because of low demand for the ATS and CTS.

When the new Camaro hit the market in November 2015, deliveries jumped 20% compared to November 2014. In January, the plant hired an additional 500 for a third shift to meet additional demand. The third shift launched in April.

The Camaro saw double-digit growth in January, 11.2%, and March, 15.5%. Then deliveries tanked in the summer. In May, they plummeted 40% to 5,827, compared with 9,753 in May 2015. The decline continued throughout August, though deliveries bounced back September and October by 25.4% and 18.7%, respectively.

Chevy spokesman Jim Cain said Camaro deliveries were skewed last year because there was an increase in fleet sales to rental companies as they phased out the fifth generation in anticipation for the launch of the sixth generation.

"It's not unusual," he said. "It's cheaper to buy as the new ones come out."

Since then, fleet sales are down sharply while retail sales are slightly up, Cain said.

"It's a balancing act," he said. "We're doing okay."

Camaro isn't the only one experiencing a decrease.

The Ford Mustang saw deliveries drop 12.7% in the same time frame. However, despite the sixth generation Mustang being released more than a year before the new Camaro, it still outsells its competitor.

From November 2015 to October, the Camaro has sold 71,481 while the Mustang sold 108,700 units, a difference of more than 37,000. In September and October, however, Camaro has outsold the Mustang.

Both brands received significant upgrades in their sixth generation, including being built on entirely different platforms. The reason Mustang may be selling more could come down to marketing, said Alan Baum, principal of Baum and Associates, a West Bloomfield company that provides automotive forecasts.

"The Mustang was better executed than the Camaro," Baum said. "The Camaro did go through some major changes. But, aesthetically, it did not change dramatically."

The Camaro was off the market, 2002 to 2010, may be a factor as well, he said.

Cain said it's a difference in sales tactics between the two companies.

"Mustang has a lot more rental car sales than we want to do," he said. "It's a different business model. We think we've got a better car."

While overall sales are slumping, Cain said the plan to generate excitement around the Camaro brand is to continue to add accessories and performance variants, such as the race-track capable Camaro ZL1.

Though the ATS and CTS are older brands, having been released in 2013 and 2014, Cadillac employs some of the same tactics. In the summer 2015, it introduced the ATS-V and CTS-V with updated technologies and safety features.

►Related:​ Analysts: Cadillac crossover coming to Lansing GM plant

GM tends to keeps its inventory low rather than over produce and offer incentives, said analyst Mike Wall of IHS Automotive in Grand Rapids.

New investment

It's not all gloom and doom for Lansing Grand River.

GM also announced last week that it would invest $211 million in the plant for new tooling and equipment as well as a 32,000-square-foot expansion of its body shop. The company also invested $174 million earlier this year in a stamping facility at the plant.

The new investment will go toward a future product at the plant that GM has not named. It's part of a $900 million investment across three plants in the Midwest.

Wall said that the product will likely be the new generations of the ATS and CTS. He forecasts that production to start in 2019. A new generation of the Camaro could be in production by 2020, he said.

"The good thing about this is that there is a light at the end of the tunnel," said Mike Green, president of UAW Local 652, which represents the workers at the plant. "A layoff is never good, but you might as well do something (the investment) while it's slow. It will be great for us."

Alexander Alusheff is a reporter at the Lansing State Journal. Contact him at (517) 388-5973 or aalusheff@lsj.com. Follow him on Twitter @alexalusheff.

GM layoffs impact suppliers

At least one auto supplier will be laying off workers in anticipation of GM cutting its third shift.

DexSys, which supplies exterior components to Lansing Grand River Assembly, will cut 40 temporary employees in January, according a news release.

The plant, located at 5589 W. Mount Hope Highway in Delta Township, employs 600 people.

DexSys is a manufacturing arm of Canadian auto supplier Magna International Inc.