Ask The Best And Brightest: Will Low Gas Prices Blow The Volt Launch?
Pity the automotive industry. With a minimum three-year lead time for new product development, timing vehicle launches to coincide with appropriate fuel price levels is never easy. Chevy’s Volt, for example, was developed and hyped during the gas price spike of 2008 when it seemed almost anyone would pay a hefty premium to ease some of the pinch at the pump. Now though, with gas prices holding steady at around $3, there’s reason to question whether consumers will flock to unproven, expensive vehicles like the Volt, absent a pressing economic incentive to reduce gas consumption. The Freep takes on this topic today, asking with gas prices so low, will anyone buy a Volt? And this is not mere media hype. Bob Lutz fretted about this possibility last year, when he said
If gasoline stays cheap, then the American public says, “I’m not interested in that; I will keep my Tahoe longer.” It puts us in the industry in a position where we are at war with the customer
This would be a depressingly familiar position for GM to find itself in, especially since it would be a product of The General striving to do something different. Gas prices are slowly beginning to go up again, but there’s no sign that this summer will see the kind of energy price volatility that will have the Volt and Cruze (let alone the Nissan Leaf) flying off dealer lots. Do you see gas prices going up soon? How expensive will gas need to be before Americans see cars like the Volt as a mainstream option? What happens to the Volt if gas prices stay level, or even drop? No only are these intrinsically interesting questions, but there’s also lots of money (including lots of taxpayer money) riding on the outcome. What say you?
Wait until the feds DRASTICALLY increase fuel taxes to assist in paying off the ever-growing deficit. Of course, the HUGE increase I anticipate will be labeled as assisting the environment, increasing patriotism, to support the troops AND to "protect the children."
It's becoming more and more obvious that the key to success these days, at least in terms of high volumes automotive sales, is having a diverse product line coupled with a flexible manufacturing line, and aggressive scheme to update platforms regularly. This way, you're never caught without at least a few vehicles hitting the niche, the dealerships never get polluted with unwanted lot barnacles, you can easily transition from one previously high volume product to another, and you've got one or two vehicles a year that are still considered "new".
I'm usually against government strong arming private business into doing anything (unless specifically stated in the Constitution), but if BP was forced to filter the crude from the gulf, refine it, and sell it back to us taxpayers for about 99 cents a gallon I think I could get behind that.
Got to remember too that Volt like drivetrain will filter through the four brands, or at least the three passenger car brands. Now Honda has a sub $17K hybrid, it's green for everyone! http://green.autoblog.com/2010/06/28/report-honda-to-offer-fit-hybrid-for-16-570-let-the-price-war/