GM building a "Prius killer" really a Prius matcher could happen pretty soon.GM is bring in a replacement for one of the Saturns(the Ion I think).The replacement is an Opel hatchback that is a huge seller in Europe-apparently it outsells the Ford Focus(a well regarded car in Europe) and is the biggest seller in its class-165" long hatchback.This car will be important because it is offered with ~10 or more motor/trans options.A couple of these options are high mpg TDIs.Once the NOX problem is solved GM will be able to plug a high quality TDI right into this vehicle.It is roughly between the Prius and Fit in size.
GM has several of these "Prius matchers" of various sizes in production already.The Corsa(roughly Yaris sized), the Saturn(OPEL) I mentioned,AND THE Zafira( a stubby 8 passenger TDI minivan-nothing like it in the USA, but it could be the "road trip" vehicle of the future once folks decide they don't want to drive 22 mpg (hy)12mpg( city) minivans with $4 gasoline.It will get better than double normal minivan mpg.
GM's Euro and Asian brands aren't the tiny small volume producers I -and most others-generally think of them as.They also have significant engineering experience and resources. GM competes very well on the level playing fields of Europe and Asia(not as well).The Duramax Diesels come from Isuzu.Isuzu is a HUGE producer of modern big and small diesels.Their little 60 hp diesel pickup was a decent seller here in the 80's.A buddy of mine had one-1987 model.He got 400,000 miles out of it before it was totaled in a wreck.This is quite an accomplishment-many of the products of that era were BIG RUSTERS.He was in Louisiana-no salt-.It got an honest 38+ mpg hy and 30 mpg city.
GM's problems are pretty much limited to the USA,and they have a simple origin-labor costs that are tough to lower because of UAW contracts.GM is being slowly driven "offshore".It is working to lower labor costs, but the UAW is in a tough spot also.You really can't expect a union to allow labor costs to suddenly drop to 65% of current on the hopes of saving jobs 15 years from now for workers who are 10-15 years from being dues paying members. It is a tough problem.Luck,Charlie