Chevy Cruze Offers 40 MPG for Under $19,000

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Wouldn't it be great if there was a gasoline-powered car that could get near-hybrid gas mileage at a low price? In September, there will be. That's when Chevrolet's new Cruze mid-size sedan will hit showrooms. A model with its new 40-mile-per-gallon "Ecotec engine" will cost as little as $18,895. This vehicle shows the kind of innovation needed by a GM brand.

The Cruze will come in several different versions, but the Cruze Eco is the one with the most impressive gas mileage estimate. It contains a 1.4 liter turbo six-speed transmission. It's the sixth gear that provides the ability for the really impressive 40 mpg. Of course, the flipside is that in the city it will be in different gears that provide only around 27 mpg.

But what kind of performance can a 1.4 liter engine provide? According to Mike Danowski, the Chevy Cruze product manager, the turbo-charger provides quite good performance. And this isn't your circa-1980s turbo engine (read: awful!). The Ecotec contains a contemporary design where the turbo charger is housed in the exhaust manifold, eliminating turbo-lag. American GM engineers have also worked with their European counterparts to create a longer-lasting turbo-charger by water-cooling the oil around the bearings, enhancing their life expectancy.

What was Chevy trying to accomplish by designing the Cruze? Danowksi says:

It's an efficient way of getting a balance of performance, fuel economy, and pricing for the customer. You're going to get near-like hybrid fuel economy from this model at a fraction of what the cost would be for a hybrid.

So let's compare it to the Toyota Prius. That gets 51 mpg on the highway, a bit better than the Cruze's 40 mpg. But the Prius also starts at $22,800, several thousand more than the Cruze's $18,895 starting price.

And how does it compare to a similar non-hybrid? The lowest-priced Ford Fusion model gets 34 mpg highway, and starts at $19,695. So it's slightly more expensive, but has worse fuel efficiency. In fact, the Ford Fusion Hybrid only gets 41 mpg highway, but starts at $27,950 -- far more expensive than the Cruze with similar top fuel efficiency. This should make the Cruze an attractive alternative for anyone who cannot afford a hybrid but wants good fuel efficiency.

Of course, Chevy also has its plug-in Volt hybrid coming out later this year, which boasts a whopping 240 mpg. But it also may cost buyers as much as $32,500 -- even after a government tax credit. So while the Volt may appeal to wealthier Americans who are conscious of their carbon footprint, Chevy's smart to provide an additional lower-priced option for consumers looking for solid fuel efficiency for under $19,000.

Developing a vehicle like the Cruze is a good strategic move by GM: it broadens its spectrum of autos. Once the Volt is introduced, the automaker's product offerings will range from plug-in hybrid to turbo-inspired Ecotec to regular gas-powered sedans to workhorse trucks and SUVs. In a sense, the automaker is hedging its bets. This is prudent as uncertainty clouds future consumer demand for cars. For example, if plug-ins don't catch on, then GM has plenty of other vehicle offerings. But if they turn out to be all-the-rage, then the company can expand that lineup instead. Either way, GM will be able to adjust quickly to satisfy consumer demand.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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