New CAFE regulations set to roll in over the next decade has already culled a number of Zeta-based large sedans for Chevrolet, Buick and Cadillac, but according to GM Inside News it has also killed the Kappa II program. The current Kappa design, which features an independent suspension set-up and hydroformed rails, is expensive to produce, with some claiming GM could be losing thousands of dollars on every Kappa model it sells.
The new Kappa II was set to address these problems by being loosely based on the larger Zeta architecture. GM was also planning to build its new Kappa II models in Mexico. Without a new low-cost platform, managers may be forced to nix the current range of Kappa-based cars after the current model cycle. The first generation of cars, especially the Pontiac and Saturn, are thought to have been introduced as costly image-building cars that GM could afford to lose money on for a short period.
Another reason why GM would likely drop plans for the Kappa II platform is because it is currently developing an additional RWD small car platform for a new Cadillac compact sedan. Furthermore, a non-premium version of this architecture is also expected to spawn vehicles for Holden, Pontiac and Chevrolet.