Well, the debate over the viability of the Chevy Volt has been well and truly joined, as political and auto writers around the web spent the last week weighing in on the issue. Needless to say, a scan of these opinions shows that my NY Times Op-Ed has drawn a wide variety of reactions, ranging from complete agreement to utter contempt. But, in a phenomenon that seems all-too common on the internet these days, very few commentaries on my opinion (positive and negative alike) bring more detail or nuance to the issue. Which is too bad, because I’d be the last person to argue that I’m capable of doing complete justice to an issue as complex as the Volt in only 900 words. The variables and unforeseeable consequences floating around the Volt’s future are so vast and varied, no writer could possibly hope to cover them all. And one such problem didn’t even emerge until the day after I wrote the Times Op-Ed: dealer markups on the Volt.
Edmunds AutoObserver got one California dealer to admit that he plans on charging $20,000 on top of the Volt’s $41,000 base MSRP. And as AutoObserver’s Bill Visnic points out
Unlike typical gouging for high-demand vehicles, the Volt situation transcends mere dollars and cents and moves into the political realm. Will GM sit on dealers scheming big-time price-gouging on the Volt – a car that features a $7,500 federal tax subsidy funded by the same taxpayers who already bailed out GM?
And what would President Obama think – he drove a Volt last Friday and defended GM’s controversial $43-billion bailout – about dealers demanding an incredible markup for a car that’s supposed to help the U.S. auto industry move into a new era and become self-sustaining again?
The market has proven time and again that customers who pay big markups for in-demand models end up the sucker, so caveat emptor. But dealers clipping the very people who helped keep them in business is a new and ugly twist on an age-old auto-industry phenomenon.
A reader at Autoextremist wrote in to say that another dealer was planning on charging $10,000 over the Volt’s MSRP [incidentally, I rarely agree with Pete DeLorenzo as much as I did with his latest rant on the Volt, which may be one of the best pieces on the topic I’ve read in some time].
But whether dealers charge $10k or $20k almost doesn’t matter, considering how crazily expensive the Volt is already. So what’s GM going to do about it? GM’s Rob Peterson tells the Freep
We don’t control any pricing at the dealership, However we have suggested strongly that they keep prices in line with what we have offered
Which means that the debate over the Volt’s price has been entirely academic thus far, since nobody knows just how much one will actually cost at a given dealer. Sure, the Freep found one dealer who promised to charge nothing on top of MSRP, but after the rough couple of years that most Chevy dealers have had, that honest soul is probably going to be in the minority. Even an informal poll at the Volt’s officially-unofficial fan site gm-volt.com indicates that gouging will be rampant. Well, it would if the majority of die-hard fans ever get around to talking to a dealer instead of simply commenting about how the Volt is, in fact, the future of motorized transport. On the other hand, gm-volt’s “dealer gouging” forum offers plenty of reasons to simply run away screaming.
A Volt at $41k is one thing… and I’m sure that early adopters will snap up the first year’s run of 10,000 units at that price. But at $60k? And what dealer is going to offer a lower-cost lease when they can simply auction Volts off (as it appears some are doing). GM might not have a ton of leverage to stop dealer gouging, but shouldn’t The General be trying to do something?