General Motors will unveil a Chevrolet compact car at an auto show this fall, with production slated to begin early next year, say sources familiar with GM's product program.

Today Rick Wagoner, CEO of GM, announced a range of strategic moves for several GM brands. Most notably, Chevrolet will see a new compact car in its ranks besides the Cobalt and Aveo powered by a new 1.4 liter turbo engine producing between 120 and 140 hp.

In a desperate move to please US consumers, this new engine will find its way into the new and yet unnamed Chevrolet compact car which will be built at GM's Lordstown, Ohio plant starting mid-2010.

The new 1.4 liter turbocharged engine will be built at GM's Flint plant and boasts a 9 mpg improvement over GM's current offerings in the segment, the Cobalt for instance. Whether this new compact car will replace the Cobalt is unclear at the moment, and they may just co-exist side-by-side. Both cars will be based on the same Delta platform, just like the global Aveo.

Rick Wagoner also approved the next generation Chevrolet Aveo and the Chevrolet Volt has made some huge strides to making its official debut on schedule. "We intend to show a production version of the Chevy Volt publicly in the very near future, and we remain focused on our target of getting the Volt into Chevrolet showrooms by the end of 2010," Wagoner said.

"Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult," he said. "Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix." In light of the current events and shifting demand for cars, GM is seriously considering to either revamp the Hummer brand or selling it entirely. How GM could possibly revamp one of their largest and most gluttonous cars to be more appealing to an increasingly MPG minded consumer seems like a huge, if not impossible, task.

Chevrolet Announce Restructuring Plan Along with New Compact Car