By Doron Levin
June 6, 2013

FORTUNE — General Motors Co.’s Chevrolet division is keeping fingers crossed that plastic surgery on its midsize Malibu sedan — plus some tinkering with its engine — will be sufficient to boost sales and pricing until an all-new model appears two or three years hence.

GM (GM) has been enjoying a spate of good news lately, particularly the increase in its shares above the public offering price of $33. Investors are heartened that the automaker has stabilized following four years of post-bankruptcy restructuring. Cadillac has posted big gains of late; and GM’s new pickup trucks, the Chevrolet Silverado and GMC Sierra had received positive reviews as demand rises for pickups. Best of all, the U.S. Treasury is selling its stake in GM, which soon will render the “Government Motors” moniker obsolete.

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The Malibu, the family sedan entry for GM’s most important brand Chevrolet, has been a fly in the ointment. Introduced in 2012, the Malibu’s mission was to recruit shoppers in the segment from competitors such as the Nissan (NSANY) Altima, Honda (HMC) Accord, Toyota (TM) Camry and, most importantly, Ford (F) Fusion, GM’s crosstown rival.

Instead, Malibu pulled up somewhat lame. “What sparked the update was several things, the first being our own acknowledgment that Malibu needed to be even more competitive in this segment,” said Chad Lyons, a Chevrolet spokesman. Feedback from owners played a role, he said. To make the Malibu more competitive, Chevrolet engineers increased room in the rear, improved fuel efficiency, and redesigned the exterior.

Michelle Krebs of said: “The changes in the Malibu are about all GM could do in that short period of time. I’m not sure consumers will notice there’s much of a difference between the two.” She attributed Malibu’s difficulties, in part, to haphazard and insufficient marketing — a charge GM disputes.

Through the first five months of 2013, the Toyota Camry was the top seller in the midsize segment with sales of 171,756, a decrease of 5.5% from last year. Second was Honda’s Accord with 155,183, up 22.9%; Nissan’s Altima sold 140,883, up 4.1%, and Ford dealers sold 136,833 Fusions, up 21.7%. Chevrolet Malibu brought up the rear with sales of 89,812, a decline of 18.4%.

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“The Malibu is in the most hotly contested segment, the midsize segment, where there have been so many new redesigns in the past year and with so many loyal buyers,” said Alec Gutierrez, senior analyst at Kelley Blue Book. “The (new) Malibu looks much sleeker than its predecessor, which was just redesigned a year ago and should help boost sales but will still have a hard time beating the Camry or Accord for the No. 1 spot.”

The stakes, of course, are far bigger than bragging rights. GM’s fullsize pickup trucks generate enormous pre-tax margins for the automaker, while GM’s cars struggle financially. GM’s car models keep getting better — but they haven’t closed the gap with the top performers from Asia. Cadillac, for example, has turned itself into a stronger competitor among luxury car models, though not yet in the same league with Audi, Lexus, Mercedes, and BMW, meaning it can’t command higher prices.

The next few months should be telling for the facelifted Malibu. If GM’s midcourse corrections are effective, sales volume and pricing should improve right away. Let’s see if GM’s marketers can rebut the critics and communicate a resounding message that a better Malibu is available at dealer showrooms.

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