Malibu Shows Road to Revival Is Bumpy By KEVIN HELLIKER and JOHN D. STOLL Ryan Mercer, Alyssa Merrick, Antonio Michaelis, Julia Noschang

One of the biggest issues facing General Motors Corporation: Even when General Motors Co. builds a prizewinner, many Americans still favor a Toyota or Honda.

Last year, shoppers in metropolitan Kansas City bought nearly twice as many Camrys as Malibus -- 2,185 to 1,262. "I'm satisfied with Toyota, and I don't think the American cars are equal yet,“ Terry Ruby, a retired Kansas City investment adviser said.

People are skeptic to buy American made cars because of the perception that American made cars are of inferior quality. "Toyota has just more consistently done a good job," Robert Neighbour from Kansas City

This week, the Obama administration cited the redesigned Malibu, which hit showrooms in late 2007, as evidence that GM is making higher- quality cars. Under President Barack Obama's restructuring proposal, the government would negotiate or impose severe cost cuts and debt reductions on GM, enabling cars such as the Malibu to pave a new path to profitability. But the government can't impose upon car buyers a belief that GM makes worthy vehicles, even as the company prepares to roll out a host of new designs.

As the latest Malibu collected honor after honor -- including a recommendation from Consumer Reports -- the Toyota Camry outsold it 437,000 to 177,000 last year in the U.S., according to Autodata Corp. It took decades for Toyota and Honda to steal big chunks of the market from GM, and it would require years for GM to steal it back.

Ten years from now, will the U.S. auto market have mostly foreign or U.S. cars? The current financial crisis could actually play in GM's favor. A just-released R.L. Polk & Co. survey of 713 vehicle owners found that 72% were extremely, very or somewhat likely to "consider buying a domestic vehicle to support the U.S. economy."

An influential J.D. Power & Associates study found GM's Buicks to be the most reliable vehicles. Toyota's Lexus brand was dethroned from the top spot, which it had held for 14 years. A GM rep believes that “we'll have a handful of products pass Toyota for the first time." A Toyota rep argues back "Quality is a marathon, not a sprint.” Saying that it is too early to be naming GM as the most reliable vehicle.

Obama administration officials find the Malibu and Buick honors especially encouraging because they involve cars instead of fuel- guzzling trucks or sport-utility vehicles. Since 1980, the percentage of GM sales coming from trucks has risen to 57% from 22%.

GM is trying to shift the focus to smaller fuel- efficient cars because of increasing fuel costs. The hope for the Malibu is that it will launch a new era of car supremacy at GM's flagship brand, Chevrolet, which accounts for nearly 60% of the auto maker's sales.

The redesigned Malibu is the latest iteration of a nearly decadelong effort by Chevy to improve its cars' image. The next wave will arrive in coming weeks with the relaunch of the sporty Camaro, as well as the unveiling of the compact Cruze and the electric-powered Volt. GM officials say each of those cars will have undergone a design and engineering process as rigorous as did the 2008 Malibu.

Malibu was introduced in 1964 In 1983 it was phased out as gas-guzzlers lost popularity and as Chevy moved deeper into the truck market. In 1997, Chevy reintroduced the Malibu, hoping it would become a star in the largest category of vehicles in the U.S., the midsize sedan. In this category, buyers wanted fuel efficiency, reliability, low price, safety ratings, and ideally, pizazz- all of which Malibu offers.

A review according to cars.com in 2003 found the Malibu "acceptable" in a category where the Toyota Camry and Honda Accord were widely hailed as exceptional. The designers that remodeled the Malibu wanted it to have a rich, beautiful exterior design and an interior better than any offered by the Japanese 'Big Two,‘ [Toyota and Honda] Other qualities wanted: good handling and "great" fuel economy.

The goal of the redesign wasn't to improve upon the existing Malibu but to beat the competition. The assignment of the designers was to create a car with a base price starting just above $20,000 but with the look and feel of a luxury sedan.

When the work was concluded on the new version of the Malibu, critics heaped praise. "The new Malibu is arguably one of the best cars GM has ever designed and built," says Ron Harbour, an industry consultant. A Kelley Blue Book review said it looked like a $40,000 car. "This vaults Chevrolet straight to the top of the mid-sized sedan game," it said.

Even though the economy was tanking, the redesigned Malibu sold more than 50% more units last year than in Its share of the midsize sedan market rose to 8.4% from 5.7%, while the Camry and Accord percentages remained flat at about 21% and 17.5%, according to GM.

The awards and honors the Malibu has received has prompt more people to give it a chance. "Malibu, I think, has begun to break through the 'negative awareness' barrier," Mr. Lutz says.