Just built the dam car already and STFU!!!!

If the Volt is not all conquering and make the Prius look like a 1970’s car then GM has failed and will loose even great market share.

My point was that GM was saying that, ignoring those fixed costs, their costs to buy the materials alone that made up the Prius were higher than the MSRP. Toyota’s costs on said parts are clearly much lower.

Plus, a lot of the initial investment in the Prius was in the engine. That investment is now spread amoungst all of Toyota’s (and Lexus’s) hybrids, not just the Prius.

Toyota makes money on the Prius, and not just in a public relation sense. They have recovered their fixed costs and their variable costs to build each vehicle are less than the amount they sell it for.

http://www.autofieldguide.com/articles/100302.html

I found this:

“At this point, there is an oft-heard objection regarding Toyota selling the Prius at a loss and subsidizing the cost of the vehicles. Here’s Masao Inoue, Prius chief engineer, Toyota Motor Corp.: “Toyota has largely recovered its initial long-term investment in the first-generation Prius.” Here’s Dave Hermance, executive engineer, Regulatory Affairs, Toyota Technical Center, U.S.A.: “The product is profitable.” How profitable is a question that’s unanswered. At least at this point in time. Presumably, in the years ahead, that will be something that should become clear.”

These statements were made around 2004, so the phrase “largely recovered” could very well mean that they are still taking a loss on these. That really doesn’t surprise me. Japanese companies often operate that like. They’ll spendi 10 years or more to build a new market or become a major player in one they are not part of, loosing money in it the entire time, learning from each failure or mistake, until they eventually show a return on it.

The only companies I have seen in the US that operate like that are outfits like Microsoft and many of the dot-coms.

Maybe it’s that moonshot mentality Michel was talking about.

This leads me to believe the Prius is actually profitable (as Toyota claims)-otherwise they wouldn’t make it. It’s probably not as profitable as some of their other models, but income from sales of it are definitely greater than Toyota’s costs.

This is the problem for GM to overcome with the Volt: The next gen Prius will probably have a very limited plug in range (less than twenty miles, maybe less than ten). But it will cost the same $20-25 thousand that the current Prius costs. GM won’t sell many Volts unless they price it in the same range-and it appears that GM’s cost per Volt will be double the list price of the Prius. So, either GM loses $20k or more per car, or the things won’t sell. This is probably why there is talk about a lower-end Volt with a 20-mile plug-in range (instead of just the standard model with a 40-mile all-electric range)-so they could have a product with a price point closer to the Prius. But then it loses it’s unique advantage of the longer all-electric range, and just becomes a GM copy of the Prius.

Also remember that the Volt is a compact, four passenger sedan, while the Prius is a midsized, five passenger sedan. The new Prius will probably be slightly larger than the existing one. The bigger size is another plus for the Prius over the Volt.

However, if a 40-mile Volt costs the same as the new Prius, it will sell very well indeed. It might sell so well that it will help push GM into bankruptcy (since it appears they will lose tens of thousands of dollars for every one sold). Of course, they will probably severely limit production to reduce losses, which means that the dealers will probably slap $10k mark ups on the few that GM actually makes.

Since the Volt probably will be a limited production item, it can’t, by definition, be a game changer. If it’s not mass produced, it’s merely a PR exercise, like the EV-1 was. And, considering how poorly GM handled the PR for the EV-1, it will probably be a costly PR disaster in the end.

Now that they’re apparently serious, it’s too late. They’re going to be behind the new Hondas and the next-gen Prius; they don’t have a prayer.

The lesson is: Cut out the FUD. Only a monopolist can get away with it, and even there it’s unethical; anywhere else it’s just stupid.

It has cost them plenty… but it’s definitely not their history.

GM started abandoning nameplates during the Roger Smith era, when Pontiac and Chevrolet began ditching names like Malibu, Nova and LeMans. The practice spread to Oldsmobile in the mid-1990s. Buick and Cadillac started abandoning nameplates in the late 1990s and early 21st century.

The era of badge-engineering really started in the early 1970s, when every division except Cadillac got a version of the Nova – the Pontiac Ventura, Oldsmobile Omega and Buick Apollo. The main distinctions were the grille and taillights. The great downsizing that began in 1977 accelerated this process…by the mid-1980s, all GM divisions except Cadillac were competing more with each other than with the import competition.

Steven Lang: GM actually has a better history with keeping names and (trying) to build equity than any of the big three… by a very wide margin.

In the meantime, Toyota’s nixing the Supra, Mazda and Nissan’s constant state of euthanasia with their models (killing em’ when the market dies down), and Honda’s languishing of the NSX is considered to be… a fluke? Sorry but whether we like it or not, ALL of these companies focus far more on the bottom line than any of their PR departments would ever like to admit.

GM and the best of the Japanese are mirror images of each other. GM has done a better job of keeping the specialty stuff – Corvette, Camaro – on target, while letting the bread-and-butter models languish. It also rolls out a new name each time a new model in one of these segments is introduced.

Since the early 1980s, in one critical segment, Chevrolet has gone from the Malibu to the Celebrity to the Lumina to the Impala. Today, the NEW Malibu fills the segment that used to be occupied by the old Citation. Through it all, only the current Malibu has matched the class leaders.

Honda, meanwhile, has stuck with Accord since its 1976 introduction, and worked very hard to keep it at the top of its class. Same for Toyota, which has stuck with the Camry. But they have been quick to abandon the niche models – Prelude, MR2, Supra.

Steven Lang: Meanwhile we have the Solstice and the Sky. They have the nerve to be in their third season when… wait??? Toyota built the Tercel and Echo for how many years without a redesign? Don’t tell me the lowly Dodge Neon, Ford Escort, Chevy Cavalier and Saturn S-Series regularly kicked them right in the sales charts for how many years?

The concern with the Solstice/Sky isn’t that it has gone three years without a major change. The question is whether GM will once again abandon a promising model that it didn’t get quite right the first time, instead of building upon its strengths and correcting its flaws with a second-generation version.

The Solstice/Sky is like the very first Corvette – a promising model that needs a fair amount of work to really shine. The promise is there…will GM follow up on it? Can GM AFFORD to follow up on it?

Steven Lang: In the meantime, it may be worthwhile to find out how Japan’s Ministry of International Trade and Industry (MITI) helped Toyota become a dominant manufacturer in the first place.

Realistically, Toyota’s basic philosophy and approach to car making are more important than any government aid.

Steven Lang: By the way, the promoting of the Prius was also done in correlation with an SUV and truck strategy for North America that completely missed the boat on fuel economy. I certainly wouldn’t blame them for missing it since virtually the entire developed world was largely unable to see what was brewing in the energy industry.

Very true…I’m always amazed at the pass Toyota gets because of the Prius. Meanwhile, it has been pursuing the full-size truck and SUV market quite avidly. But Toyota did keep the Camry and Corolla up to date, so that when the truck market went south, it wasn’t caught completely with its pants down…

FUD. Cars charge at night, when the grid isn’t under load. If you need an official source, the DOE says we can have 180 million electric cars charging at night with the existing grid.

So is that going to be a coal burning plant in your town or would you prefer nuclear?

I, for one, would love a nuclear plant in my town. The NIMBY and FUD attitudes of the rabble will work to get me cheap electricity rates.

Great article! This is a major problem for all of the Detroit automakers and one of the main reasons they’re losing out to Toyota, IMHO. Instead of iterating their products they cost save them to death until they can’t even use the name anymore or they scrap whole platforms and start over. When they do focus all of their energy on a hot product, they usually do well. Detroit has the engineering talent to make great products, but a complete lack of managment discipline and vision.

“And you only have to look at the Cobalt, the Colorado, the G6, the Equinox, the TrailBlazer and several other models to see GM’s product development philosophy in action:”

This has only been a recent turn of events for GM. In fact, the groundwork for the ‘musical marques’ got it’s first infusion with the Jack Smith era and has been given a ridiculous level of traction in the Wagoneer/Lutz era.

It has cost them plenty… but it’s definitely not their history.

GM actually has a better history with keeping names and (trying) to build equity than any of the big three… by a very wide margin.

If you want to compare the Corvette to anything in the market… try the Mustang. A car that has managed to have been given only minor modifications for usually over a decade before a ‘redesign’. GM has manged to put plenty of money into the Corvette despite the fact that the Mustang’s niche would have likely been a far rosier and more profitable one given enough investment in the Camaro.

In the meantime, Toyota’s nixing the Supra, Mazda and Nissan’s constant state of euthanasia with their models (killing em’ when the market dies down), and Honda’s languishing of the NSX is considered to be… a fluke? Sorry but whether we like it or not, ALL of these companies focus far more on the bottom line than any of their PR departments would ever like to admit.

Meanwhile we have the Solstice and the Sky. They have the nerve to be in their third season when… wait??? Toyota built the Tercel and Echo for how many years without a redesign? Don’t tell me the lowly Dodge Neon, Ford Escort, Chevy Cavalier and Saturn S-Series regularly kicked them right in the sales charts for how many years?

Yep, thought so. I’ll say it once and probably a thousand more times before this is all over. GM’s problem is not based on marques, or quality, or even management. It has to do with having to manage too many brands, and legacy costs that effectively put Detroit behind the eight ball with every car and truck they make. Until those issues are fixed for good, GM will continue to struggle.

It will also likely take a subsidization of the American auto industry, and possibly even a few successful legal challenges to our nation’s franchise laws, for GM’s North American operations to become successful in the long run. If anyone here would like to hem and haw about that, feel free. In the meantime, it may be worthwhile to find out how Japan’s Ministry of International Trade and Industry (MITI) helped Toyota become a dominant manufacturer in the first place.

By the way, the promoting of the Prius was also done in correlation with an SUV and truck strategy for North America that completely missed the boat on fuel economy. I certainly wouldn’t blame them for missing it since virtually the entire developed world was largely unable to see what was brewing in the energy industry.

Well okay… perhaps Soichiro Honda and Elvis may have figured that one out. But of course we know that they’re too busy throwing darts in a heavenly bar somewhere near the pearly gates.

DOA, if it ever gets that far.

well, maybe it does. i cannot confirm the absolute truth of what i am about to share with readers here but, for what its worth – i was speaking casually, and frankly, with a relatively new aquaintance in my neighborhood just this morning.

our conversation eventually turned to cars and the prospect of things to come. then to electric cars, and then i asked him if he had seen the movie, ‘who killed the electric car?’ he hadn’t – but without missing a beat, the guy tells me his uncle was heavily involved in the development of that car and then he asks me if i knew why gm took them all away?

i said no and he said: the biggest problem, from gm’s point of view, was that almost nothing ever went wrong with them!

I really don’t understand this line.

The traditional critics of hybrids have used an argument that has pretty much exploded in their faces: hybrids are bad for the enviroment; hybrids have toxic batteries; the batteries will die soon; hybrids don’t justify their costs;
hybrids are ugly, etc….These folks have expectations of a paradigm shift?! A paradigm shift for them would be if the world suddenly popped back to 1964. So how are they delaying the things they claim to want?

If you’re talking about the Volt vs. Prius naysayers, you’re talking (mostly) about the classic “teams” or “tribes” lining up behind their standard bearer (GM or Toyota). But I still don’t understand how their critiques of the other’s product “delay the very thing they claim to want”.

BTW, I’m not a critic of the Volt; I’m a critic of how the poject is being handled, in the usual dumb GM way. I think the Volt will work fine, sooner or later. And it will be a good addition to the coming fleet of hybrids/plug-ins and EV’s. I do think that the Volt’s approach (range-extending EV) is not what I would have done (a good parallel hybrid and a pure EV). It’s trying to do both, and will have to live with the resultant compromises.

I was truly excited when the Volt was announced, but GM’s mishandling makes me nauseous.

Let’s face it. The EV1 was a huge money-loser. The thing had a price tag around $100,000(that was almost 10 years ago), was as practical as a Triumph, and wouldn’t even meet crash standards after 2002.

Let’s get the facts straight.

1) The EV1 had a price tag of about $40k, not $100k.

2) Honda never really stopped its EV’s. After the original EV retired in 1999, it’s renamed the FCX and focused on fuel cell. There isn’t even a single time gap there. Right now, Honda is leasing out the second gen FCX in CA. This will be Honda’s trump card in a few years to compete with Toyota for the world’s top auto maker title.

I was reviewing the design on Wikipedia earlier. Amazingly simple.

I think the fact that your initial post used the phrase “After all, the Corvette still sits on leaf springs and even Clarkson raves about it.”

is what Michael was clarifying. Saying that the Corvette still sits on leaf springs implies that it is no more advanced than a 1967 Camaro or a pickup truck, when in fact the transverse composite leafs in C4/C5/C6 Vettes are a very high tech solution to designing a suspension in a low slung sports car.

I suspect from your comments that you already know this, but most people who mention the Vette “still” uses leafs (and pushrods, for that matter) usually need a bit of an education that a Vette is indeed a refined, world class high technology showpiece, and not Chevy’s version of the comparatively crude Viper.

The one thing nobody ever mentions about electric cars is the electricity. And just where will all of it come from? We already talking about shortages of electricity and the inability to plan and build the power stations that we are “projected” to need, even without electric cars. So is that going to be a coal burning plant in your town or would you prefer nuclear?

Actually, I’ll have solar panels on the roof, largely paid for by tax credits, thanks. Self-sufficiency is a wonderful thing.

Now someone should kvetch about the environmental impact of battery production so we can discuss the impact and lifecycle of various nuclear fuels and/or “clean coal.”

Seriously, energy is something we need to address on myriad fronts and the very-slowly-ramping-up grid drain from plug-in hybrids and/or electric cars is (and will continue to be) the least of our problems. If you want to attack electric cars, you need to find a more sustainable argument.

Let’s see, Michael…how many millions of cars have been powered by small block Chevy V8’s and 3800s (which were essentially 75% of a SBC) in all their iterations?

Just within the past two decades we’ve seen L98s, LT1s, LT4s, LS1s, LS2s, LS3s, LS4s, LS6s, LS7s, and LS9s, and all the 6 cylinder variants, including turbo and supercharged iterations….

My point being, they have all been at least competitive, if not class leading motors, and all of them OHV. Excellent fuel effiency and compactness for a given torque output, low cost, reliable, and lighter weight/lower CG than most, if not all the competition. Say what you will about the shortcomings of the cars they’ve been put in, but the pushrod GM motors themselves have been a bright spot in the company’s otherwise erratic history.

Saying that GM has produced “one world class pushrod operated engine” is like saying “Apple made one world class MP3 storage device.”

When Ford introduced the streamlined Lincoln Zephyr for 1936, it was careful to include a pointed “prow” for a grille, so that it looked “normal” to customers, and the car sold reasonably well.

Well you’re missing my point. The automakers were all, obviously, forced into a program none of them had any intention of following through with.

Toyota and Honda kept their small, enthusiastic EV customer base happy by modifying the original program to do so. At the same time, they learned a lot about batteries, motors, controllers, and software to launch successful hybrid initiatives.

Toyota and Honda turned lemons into lemonade, while greenwashing their image, allowing them to grow their market share on conventional and hybrid models with knowledge learned through their (forced, non-starter) EV programs.

GM did their best to piss off CARB, SCAQMD, and their customers, all while relinquishing any forward progress they made on battery technology rights to an oil company. GM brownwashed their image and now, when a non-enthusiast car buyer thinks of a green, efficient, technology leader to buy a car from, GM is about dead last on their list. Market share followed in lock step.

That’s my point.

And again, the EV-1 was a $100,000 vehicle almost 10 ago. There was no way the EV-1 could ever been a viable vehicle.