By on January 23, 2012

With concurrent news that some GM dealers are trying to game the vehicle allocation system comes news that Chevrolet dealers are outright rejecting shipments of the Chevrolet Volt.

The gist of the story seems to be that dealers are waiting for the controversy over the NHTSA probe to die down, and GM’s reps aren’t putting pressure on the dealers to take on more Volt inventory. Automotive News reports that while 104 Volts were allocated to 14 New York City area dealerships, dealers only took 31 cars. Other eligible vehicles have a take rate among dealers of over 90 percent, making the Volt the least popular car among dealers in the NYC region.

Despite GM President Mark Reuss’ insistence that “We haven’t satisfied demand,” Volt sales were well short of their initial target, and GM has dropped their 2012 goal of selling 60,000 Volts worldwide, with 45,000 being sold in the United States.

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74 Comments on “Chevrolet Dealers Reject Volt Allocation...”


  • avatar
    gslippy

    Too much has been made of the Volt missing its 2011 sales target, but I think the 45k target for 2012 is far too aggressive.

    Dealers don’t want the Volt because they can’t sell $41k economy cars.

    • 0 avatar
      MrWhopee

      Well, how can you sell cars if dealers don’t even want to take the car? Something doesn’t jibe here. Dealers regularly trade cars between themselves. If there are people waiting for Volts, dealers will want to take a Volt even if they have no intention of putting it in their showroom. They can trade it for something that sells!

      • 0 avatar

        Yep, more bloody stupidity and lies from GM. I’d love to see what would happen if they made a Cruze PHEV or a Malibu PHEV, how their sales would compare to the Volt.

      • 0 avatar
        KixStart

        They are talking about a Cruze PHEV. Using the baby two-mode arrangement, I’d say it will likely be very expensive and equally hard to sell.

        Not quite what you asked for but the Malibu Eco is another over-priced, under-performing entry that will probably sell poorly.

      • 0 avatar
        Dr. Kenneth Noisewater

        As for my experience last Aug/Sep, I went to one dealer to drive and inspect the Volt they had listed and they had already sold it. As I dealt with a fairly polite and knowledgable salesman, I asked if he could have the other one in the area (same dealership different town, about 30mi away) trade to his location so I could buy it from him. He said that none of the dealers were trading Volts or Corvettes amongst each other, mainly pickup trucks and SUVs.

        Who knows, things may have changed, but I ended up going to that other dealer to get mine. And I don’t think NY tax credits are as high as those in CA, nor do I think they get single-seat HOV lane access, and electricity charges in NY are 3x or more what I pay for power..

      • 0 avatar
        Luke42

        @MrWhopee
        The problem is the way the Volt has become a political football.

        I’ve observed that, if you’re a certain kind of loyal Republican, you’re supposed to hate on the Volt and say something negative about “Obama” whenever the car is mentioned.

        When the Volt concept was unveiled back in 2005 (in the middle of Bush II’s presidency), everyone from across the political spectrum loved it, because it was about American technology and ran predominantly on American energy. Of course, it was also supposed to cost substantially less than $30k and be a people’s car, rather than have a price comparable to a Corvette and only be affordable to rich guys who enjoy new technology. But it’s still designed in Detroit (sort-of) and powered by West Virginian coal miners (sort-of), so I don’t get why it’s been turned into a political punching bag.

        But, then again, I frequently making the mistake of thinking that technology is about technology, and that people should make decisions based on technological realities. Boy do I ever get schooled for that belief!

        P.S. I was really hoping that the Volt would be better than my wife’s Prius in every way. But, alas, it costs more and gets lousy highway mileage, compared to what we’re used to, so it’s not better than the Prius in every way. It would use less fuel than the Prius during our daily commute, and that’s something that I value far more than the dollars saved, but it’s hard to justify spending $40k that we don’t have for a car that isn’t better in every way than the paid off old Prius in our driveway. :-( I still want a Volt, though, but it’s harder to convince my wife when it’s a trade-off as compared to the old comfy worn-in Prius-shoe, so I’ll just have to wait until I’m that much richer to buy a Volt (or a car with similar abilities).

      • 0 avatar
        fsuszka

        Mr. Whoppee:
        They don’t want to take the car for the same reason the American public won’t. Why have a piece of overpriced technology with safety issues taking up space in your dealership when you can invest in what is selling and move you’re inventory? Dealerships, like the rest of us are strapped for cash and assumed debt. The average age of cars on the road today is about twelve years. People are hanging on to them because of a cloudy forecast for the future. No one wants to assume more debt.

        How many people are waiting for Volt’s? By all standards not many. There was a safety issue GM glossed over for the most part by encasing or as GM put it, “Battery safety enforcement.” This was done to prevent a possible fire during a side impact accident. Casing, Plates? Isn’t that a band aide? A stop gap measure to sidestep the issue and placate the buying public? There are still dealers that are selling the car without the upgrade. Do they care about the buying public? No… They got rid of the dinosaur. Buyer beware. Remember the Hewlett Packard notebook fire issue with their batteries? You know the one. $425.000 for not reporting the fire hazard sooner? The fire hazard is only one aspect. Compare the cost of a Volt to say a Nissan Leaf. The Leaf costs about $7500.00 less and to the best of my knowledge, doesn’t have any fire issues.

        I’m not sure what advantage a dealer would have to buy an unsalable car, spend money to have it sit on the back lot keeping it clean and ready to go. Why should they spend money that could be better spent on other things like say parts for inventory that does sell? In your last sentence I garnered great humor from it.

        Let’s see??? I am a GM dealer in a small town located in a farming community, (As an example) I have a small inventory due to the fact times are hard. I have a few volts in stock I can’t sell and I want to trade them for something that sells better. I contact several other dealers and want to make a trade. They inform me that they are in the same situation as I. They can’t move the car either. People just won’t buy it. What do I do? I sigh and realize that I made a bad business decision. My service business has picked up but I’ve got the money to buy more parts tied up in the Volt I can’t sell. Soon I may lose business because I can’t buy the parts I need. I will have to layoff mechanics and possible sales people. And the beat goes on…

        This is a millstone around the necks of GM, the American people and our present admiration.

      • 0 avatar
        fsuszka

        Mr. Whoppee:
        They don’t want to take the car for the same reason the American public won’t. Why have a piece of overpriced technology with safety issues taking up space in your dealership when you can invest in what is selling and move you’re inventory? Dealerships, like the rest of us are strapped for cash and assumed debt. The average age of cars on the road today is about twelve years. People are hanging on to them because of a cloudy forecast for the future. No one wants to assume more debt.

        How many people are waiting for Volt’s? By all standards not many. There was a safety issue GM glossed over for the most part by encasing or as GM put it, “Battery safety enforcement.” This was done to prevent a possible fire during a side impact accident. Casing, Plates? Isn’t that a band aide? A stop gap measure to sidestep the issue and placate the buying public? There are still dealers that are selling the car without the upgrade. Do they care about the buying public? No… They got rid of the dinosaur. Buyer beware. Remember the Hewlett Packard notebook fire issue with their batteries? You know the one. $425.000 for not reporting the fire hazard sooner? The fire hazard is only one aspect. Compare the cost of a Volt to say a Nissan Leaf. The Leaf costs about $7500.00 less and to the best of my knowledge, doesn’t have any fire issues.

        I’m not sure what advantage a dealer would have to buy an unsalable car, spend money to have it sit on the back lot keeping it clean and ready to go. Why should they spend money that could be better spent on other things like say parts for inventory that does sell? In your last sentence I garnered great humor from it.

        Let’s see??? I am a GM dealer in a small town located in a farming community, (As an example) I have a small inventory due to the fact times are hard. I have a few volts in stock I can’t sell and I want to trade them for something that sells better. I contact several other dealers and want to make a trade. They inform me that they are in the same situation as I. They can’t move the car either. People just won’t buy it. What do I do? I sigh and realize that I made a bad business decision. My service business has picked up but I’ve got the money to buy more parts tied up in the Volt I can’t sell. Soon I may lose business because I can’t buy the parts I need. I will have to layoff mechanics and possible sales people. And the beat goes on…

        This is a millstone around the necks of GM, the American people and our present admiration.

    • 0 avatar
      highdesertcat

      Actually, the Volt has been instrumental in helping to sell the Cruze. There have been several cases where people walked into the dealership to look at a Volt and ended up buying a Cruze. This info from my poker-playing buddy who owns a GM dealership.

      Dealerships in my area have at least ONE Volt on their lots. Several have two or three unsold models. I can understand why they don’t want to buy more of them because it ties up their working capital.

      They also don’t want to accept any more 2011 Silverado trucks.

  • avatar
    Robert.Walter

    OEM’s are funny.

    They want their dealers to know their customer, they want them to be the voice of the brand in front of the customer.

    They are not so happy when they become the voice of the customer in front of the brand, or if they know their customers to the point that they know what will and what won’t sell.

    I know a guy who is an Opel dealer, he wanted to avoid the Ampera because he felt his customers would have no interest in the car. At the time, he said that GME had gone back to their bad old ways of handling dealers once the mother ship in Detroit felt that it might survive bankruptcy.

    Recently, I noticed that he has an Ampera on his lot. Guess they finally forced him to take one too.

    • 0 avatar
      Pch101

      They are not so happy when they become the voice of the customer in front of the brand, or if they know their customers to the point that they know what will and what won’t sell.

      I suspect that the problem for the dealer has more to do with the dealer’s costs than it does with either the customer or the automaker.

      As far as I can tell, there are no incentives paid to the dealer to carry the Volt, aside from holdback that is paid on the usual formula. So the dealer is left with floorplanning the cost of the car at full invoice (which is at minimum about $38,000 and well above the after-tax-credit sales price to the consumer), with no additional spiff to hold that inventory.

      In other words, if GM provided the same kinds of incentives to carry a Volt that it did to carry a lot of its other units, then the dealers would happily take them.

      That, and the markup between invoice and MSRP is pretty thin. Compare the spread between the Volt and a similarly priced car such as a 328i coupe, and you can see that the margin on the Volt is about half of what it is for the BMW. If the Chevy dealer can’t get away with either price gouging (sales above MSRP) or make it up with volume that can turn the holdback into a profit center, then it’s a losing situation for the dealer.

    • 0 avatar
      KixStart

      I’ve seen reports (of questionable reliability) that GM has 2500 deposits for the Volt in Europe. Perhaps it will sell well there. Fuel is, after all, very expensive in Europe and it seems like many countries are offering assists of various kinds to get EVs in the road.

      Until recently, GM didn’t seem to be reporting any Ampera builds but in December they reported building 2500. Actual sales figures can’t be too far away.

      • 0 avatar

        It comes down to the cost yet again. Even if fuel in Europe is twice is expensive, the savings are not going to carry a EUR 32,000 car, especially since small cars are pretty economical as it is.

      • 0 avatar
        Luke42

        Especially European small cars, even those made by American nameplates.

        Ford and GM have been holding out on us. Ford has started bringing its European/World lineup to the US, and I’ve started being interested in their new cars again. (I’ve bought a bunch of used Fords because the rapid depreciation makes them a good deal on my side of the used car market. It had never occurred to me that a new Ford would be appealing until I saw the new Focus. Perhaps a new C-Max will end up in my driveway after I get a major raise.)

  • avatar

    Reuss is right, they haven’t satisfied demand… the dealers are demanding that GM keep the Volt off their lots. like I’ve said before many times, this car was a disaster from the get go. General Motors is run by fools, nice people, just dumb as snot when it comes to selling cars. shame really.

    • 0 avatar
      mike978

      It may be true that “eneral Motors is run by fools, nice people, just dumb as snot when it comes to selling cars.” but how do they therefore sell 9 million vehicles and even if you exclude Chinese sales you are talking over 6 million sales which would still make them one of the biggest manufacturers?
      I am asking this out of genuine interest and not aiming to start a pro/anti GM thread.

      • 0 avatar

        valid question. answer is that the strength of GM is, and has been, their dealer body. you remember that group that got it stuck up their behinds. if you look at the last three decades of market share for GM you’ll see a steady decline year after year just like a flight of stairs. the only variances are when extreme events occur such as the Ross Perot buyout when they lost about 5 points as I recall, and the natural disasters/recalls that hurt the Asians recently. the decline will resume I assure you this year and once again the creative genius mindset at GM will produce their usual fresh crop of excuses for failure. at General Motors the results really don’t change, just the names on the office doors as they shuffle incompetent personnel and reorganize in order to give some semblance of managerial effectiveness. in the meantime the ship continues to drift at sea bouyed only by independent franchisees who understand retail and thereby move enough product to keep factories functioning.

      • 0 avatar
        jhott997

        Buickman is absolutely spot on correct. The dealer network is GM’s only strength. People buy a car from a dealer, their friend the neighbor, their business partner, the sponsor of a little league team in the town, whatever. If said dealer sold Toyota the town would buy Toyota.

    • 0 avatar
      jhott997

      BINGO!!!!!

  • avatar
    Oren Weizman

    Someone do the Volt dance right effin now …

  • avatar
    fincar1

    “40 thousand, 41 thousand, 42 thousand. Thanks! Now get this piece of junk off my lot!”

  • avatar
    KixStart

    Between the allocation process and the initially very limited production, the entire Volt rollout process has been a mass of confusion, obfuscation (much of it likely intentional), lackadaisacal sales volume and curiously overstocked dealer lots.

    Toyota with the Prius and now the Prius PHV, Nissan with the Leaf and Mitsubishi with the “i” all took orders to route cars to people that actually want(ed) them. It would seem obvious, to some, that this is the way to handle sales for a car where the demand is uncertain and probably geographically “lumpy.” For their own reasons, GM has not done this.

    The Camaro rollout was also one that involved allocations over customers, with reports of customers who had put down cash money, months in advance, for their Camaros driving by dealer lots and looking at Camaros with “excess dealer profit” markups on the windshields.

    When (maybe that’s an if) the Volt is approved by California for HOV lane use, we may see a surge in interest, at least in locales where an HOV permit is valuable.

    • 0 avatar
      jhott997

      “Between the allocation process and the initially very limited production, the entire Volt rollout process has been a mass of confusion, obfuscation (much of it likely intentional), lackadaisacal sales volume and curiously overstocked dealer lots.”
      That’s GM. A bunch of fools. Don’t doubt this fact.
      “intentional”. You bet it is. The culture of liars that exists inside GM is remarkable and not believable unless experienced.

      “When (maybe that’s an if) the Volt is approved by California for HOV lane use, we may see a surge in interest, at least in locales where an HOV permit is valuable.”
      Don’t bet on it. This car is an epic fail from a corporation that is no position, financially, to market it.

  • avatar
    CoolCreek

    Chevy Volt Tear Down courtesy of EE Times Video

    http://www.youtube.com/driveforinnovation

    Lots of electronics compared to an internal combustion engine. If I ever own an EV, I won’t own it longer than the warranty!

  • avatar
    Jack Baruth

    Those of you who are interested in the allocation process may be faintly amused by an article I wrote a long time concerning Ford Aerostars:

    http://www.speedsportlife.com/2008/02/08/avoidable-contact-8-dealer-vs-manufacturer-and-the-loser-is-you/

    • 0 avatar
      KixStart

      Most amusing!

      Of course, that system worked so well that some thousands of D3 dealers have been closed and 2 of the 3 D3 have gone Tango Uniform.

    • 0 avatar
      panzerfaust

      Thanks for the link to your story. You point out two crucial facts 1) “Never forget that the real customer for an automaker isn’t you, and it isn’t me. It’s the dealer.” And 2) floorplanning; i.e., ‘paying interest on the loan which covers their inventory.’
      It would appear that there’s neither the outright sales/profit incentive to have Volts on the lot nor (it seems) can the General apply enough leverage to take the Volt. The reason for the rejection of their allocations is no doubt there is no other item in the inventory that can offset paying month after month of interest on a herd of $40,000.00+ white elephants that smell like lemons.

    • 0 avatar
      Geekcarlover

      Excellent story. Years ago I had a Practical Economics professor who used his personal history as a Pontiac/Olds salesman in the early-mid 70’s to explain reality versus theory of supply and demand. What they did to clear Grand Am’s & Omegas has made me paranoid whenever I’ve walked into a dealer ever since.

  • avatar
    alluster

    Its about time GM kills the Volt. This car is too political and is not worth the negative PR. All of GM’s new cars and recent redesigns are selling well and have been well received by critics, fans, the automotive press and consumers alike. Profits and sales are way up, incentives are down, the balance sheet has never looked this good, the cost structure is also looking good so just kill this thing and build the cars/trucks you are good at, you know the ones that people actually buy.
    With sales, profits and market share up and incentives, costs down, the Volt has become the only tool for GM haters to bash them. They selectively ignore that the Volt still outsold several cars/trucks sold by Toyota/Lexus/Honda and Acura. The only hybrid from Toyota in this price range is the Lexus HS, which the Volt outsold 6 to 1. The volt outsold the half priced CR-Z, 3 to 1 and the half priced insight, 2.5 to 1.
    The EV and hybrid market is less than 3% a year, less so in other countries, especially emerging nations. It won’t hurt a bit to abandon the market, even though they have mild hybrids selling in good pace. Leave the hybrids/EV’s to other companies and introduce diesels. For comparison, the mini-van segment is three times as big.

    GM used it as a bargaining chip to get their bailouts. Now that they have got the money and are profitable, its time to put resources towards pressing issues like getting Opel back to profitability and increase margins. The Volt is too much of a distraction, for a car that sells .5% of the total sales. For Dec 1530 sales vs 235,000 total.

    Or here is an idea to GM. According to WSJ you got $45 Billion in tax breaks that are usually not provided to companies that go through bankruptcy. That’s $2.25 Billion gift from the tax payers every year, for the next 20 years. You know, in exchange for the bone we threw you two years ago, maybe you can use that $2 Billion a year and give use free volts, 50,000 of them at $40 K. You will probably sell another 10,000. That’s 60,000 unit a year sales target met to shut the critics up.

    • 0 avatar
      geeber

      Maybe GM should realize that this car needs to slowly BUILD an audience, and serve as a beacon for the “new” GM.

      Building “x” number of cars so that GM can say “We’re number 1” (as opposed to building “x” number of cars because that is how many customers actually want), and then forcing them on dealers who don’t want them, smacks of the old GM.

      • 0 avatar
        Pch101

        Building “x” number of cars so that GM can say “We’re number 1″ (as opposed to building “x” number of cars because that is how many customers actually want), and then forcing them on dealers who don’t want them, smacks of the old GM.

        There’s a lot of truth to that. But GM has had a tradition of making that situation more palatable for the dealers by paying incentives to compensate them for holding the extra inventory, and for holding it for longer periods. It doesn’t seem to be doing this with the Volt.

        Here’s an exercise for you — compare the spread between invoice and MSRP for the Volt with another GM vehicle with a similar invoice price, such as the Tahoe. You’ll see that the Tahoe carries about twice the spread.

        Then compare the incentives. GM provides far more incentives support to the Tahoe than it does for the Volt.

        All told, a GM dealer probably makes more money on the average Tahoe than he does on the average Volt, even though he is paying about the same price for either of them. Even if he can sell the Volt at the same pace or more quickly, he still makes less on it.

        Now combine this with the fact that he has to educate his sales staff about the Volt, but will sell far fewer of them, and it becomes evident that dedicating staff resources to the Volt provides lower bang for the buck to the dealer. The sales process is probably easier for the trucks, which makes the trucks even more appealing.

        Dealers are thieves, but those thieves still need to turn a profit. Squeezing them on the spread on a low-volume product that doesn’t seem to be selling itself is not an attractive proposition for the dealer. That would be true in this case, regardless of the amount of production (and I have to say that I do have to question GM’s commitment to this car, regardless.)

      • 0 avatar
        alluster

        “Maybe GM should realize that this car needs to slowly BUILD an audience”

        They will if the press and fox news would give them a effin break. Like I said, this car is too political and as long as the import-humping automotive press keeps the heat up, it will only be a unnecessary distraction for GM to please the very people who want them dead. Pre 2009, these sites made a livelihood by feeding off GM’s woes. You can’t blame them for catering to their customer base.

      • 0 avatar
        geeber

        Pch101: But GM has had a tradition of making that situation more palatable for the dealers by paying incentives to compensate them for holding the extra inventory, and for holding it for longer periods. It doesn’t seem to be doing this with the Volt.

        Which leads to another question – why isn’t GM doing this? I can’t believe that GM wants this car to fail.

        But I certainly hope the company doesn’t believe that all of the steps you outlined are unnecessary.

        The leadership of the GM can’t possibly be that incompetent.

        alluster: They will if the press and fox news would give them a effin break.

        If there are dealers who don’t want the car, and GM is forcing it on them (for the reasons Pch101 outlined), then it is news. I see no indication that this story is a fabrication. Wailing about news coverage isn’t going to help the new GM in the long run any more than it helped the old GM.

      • 0 avatar
        Pch101

        Which leads to another question – why isn’t GM doing this?

        I suspect that it’s a numbers and accounting game, one which GM can’t help but lose.

        If it discounts the sticker price of the car, then GM will have to cut the invoice price by a similar amount. There may be some additional sales volume, but probably not enough to make up for the price cut, thus producing larger losses for the corporation.

        If it provides more spread to the dealer by raising the price, then that could hurt sales.

        So as it stands, GM is trying to meet somewhere in the middle, but in the process, it is taking it out of the hide of the dealers.

        It strikes me that the Volt is one of those things that started out as more of a design exercise that, through circumstances, has spiraled into a production model. This car doesn’t really conform to the overall corporate culture or the existing dealer network, and GM isn’t the ideal company to be producing or selling such a thing.

        GM does best with low-technology, high glitz, high volume products, not with niche vehicles that are supposed to appeal to early adopters. Its incentive system and dealer network are oriented toward the high volume approach, not to something like this. Getting GM to turn that drastically is like trying to operate an aircraft carrier on a skidpad.

      • 0 avatar
        KixStart

        PCH101: “This is the definition of a niche. You’re trying to change the definition to suit your own purposes.”

        Then what I suppose I should have said was, “It is unsuitable as a niche vehicle on account of the development costs.”

        And GM’s not going to be getting more margin on it because, at what are alredy niche volumes, the price is already high. I doubt that they’ve got much margin on it as it is. After all, Lutz did once promise that they’d lose money on it for years. That I can believe.

        PCH101: “GM does best with low-technology, high glitz, high volume products, not with niche vehicles that are supposed to appeal to early adopters.”

        OK, I can agree with that… And they’re not breaking the patten with the Volt, either.

      • 0 avatar
        jhott997

        alluster: “They will if the press and fox news would give them a effin break. Like I said, this car is too political and as long as the import-humping automotive press keeps the heat up, it will only be a unnecessary distraction for GM to please the very people who want them dead. Pre 2009, these sites made a livelihood by feeding off GM’s woes. You can’t blame them for catering to their customer base.”

        Ahhh, yes. How refreshing. Blame the press for GM’s woes. Nice try.

  • avatar
    galaxygreymx5

    I suspect this has a lot to do with the HOV lane-qualified Volts shipping a month from now. Dealers in CA emissions states are sitting on a bunch of inventory while people wait for the SULEV models that will get them in the carpool lane and qualify them for a state rebate.

    It’s no wonder that dealers are rejecting the existing cars; they have plenty now.

    • 0 avatar
      KixStart

      One might think it was kinda’ dumb of GM to build Volts that wouldn’t qualify for the HOV lane stickers in the first place. Why didn’t they make the necessary adjustments before last summer’s lengthy D-Ham shutdown and hit the ground running in August with (the supposedly) more desireable cars?

      Right now, the GM/GM Volt FanBase remains in denial, saying “just you wait” for the HOV sticker model. I suspect GM itself is similarly in denial for that same reason. But Leaf sales aren’t going anywhere fast and the number of Volts they’re going to sell because people will pay way too much for a car simply to get an HOV sticker is going to be somewhat limited.

      The car has to “play in Peoria” or it’s doomed.

      • 0 avatar
        geozinger

        The car has to “play in Peoria” or it’s doomed.

        Maybe not. The Prius really didn’t get traction until the CARB allowed the exemptions to run it with a single driver in the HOV lanes. That plus the other generous tax breaks and incentives really sent the interest and sales skyrocketing.

        Many other states fell in line with incentives for Hybrid cars after the California decision, even states where there wasn’t a demand for such incentives to boost sales.

      • 0 avatar
        Pch101

        The car has to “play in Peoria” or it’s doomed.

        It’s quite the opposite. It’s a low-volume niche vehicle. Trying to sell a niche vehicle to everyone would be a guaranteed failure. Imagine if the MINI attempted to compete head-on with the Civic or Corolla, and what a disaster such an effort would be.

        GM needs to appeal to a relatively small group of early adopters who will willingly pay a premium, and then evangelize on the company’s behalf. But I suspect that the dealer network hasn’t been sufficiently prepped to serve those people, and that most of the pool of early adopters already discovered the Prius.

      • 0 avatar
        KixStart

        PCH101,

        If you look at its sales volume, you’re right, it is a niche vehicle. However, you can’t spend a billion or two to develop a niche vehicle. GM needs volume sales to recover that.

        Nor is it a niche vehicle in terms of market served, except by drivetrain type. Once it’s in dealerships, it’s another tranportation appliance from which to choose. There is a certain number of people who want an EV at (almost) any price but that strikes me as more of a submarket.

        geozinger,

        The Prius took off when it was a pretty good value as a car. The 200-2003 Prius wasn’t any great shakes but Toyota built a better Prius and held the line on price, as I recall. It offered a lot of utility and previously unequalled fuel economy for not much more money than a midsize sedan. That’s highly approchable.

      • 0 avatar
        geozinger

        @Kix Start: Without research I can’t say for sure, but IIRC, the price wasn’t all that inexpensive, but with the HOV exemption (in CA) it pushed the price up. I can remember reading reports about the bidding to get Priuses with the HOV sticker.

        All of the hubbub around the Prius and the HOV exemption is what brought it to the national consciousness at the time. Combine those two things with a good redesign the car took off. But with gasoline prices in the $2.00-$2.50 range in most of 2003-04, there was no huge incentive for the average Joe to trade in his Canyonero for a Prius. That didn’t happen until 2008.

        I still believe the sales would have been much lower if it hadn’t been for the distortion of the market by the incentives.

      • 0 avatar
        Pch101

        If you look at its sales volume, you’re right, it is a niche vehicle.

        This is the definition of a niche. You’re trying to change the definition to suit your own purposes.

        GM needs volume sales to recover that.

        No. When selling into a niche, a company needs **margin** to recoup its costs.

        A product is profitable if a company can price it to a point that it can recover the costs through the volume. The lower the volume, the higher that the price needs to be.

        The challenge for GM is striking the balance between volume and margin. That does not mean selling the car in Peoria, who are the latest of adopters, but by getting early adopters excited about it.

        Early adopters will happily spend extra money to be the first on the block, but they have to believe that they are on the cutting edge. I think that GM will have trouble convincing such people that the Volt is a radically different solution from what is already available from the Prius. That will especially be the case when the plug-in Prius hits the market in the spring.

  • avatar
    thornmark

    What is a sale? GM books sales when shipped to a dealer. Is that what we’re discussing?

    How are retail sales?

  • avatar
    galaxygreymx5

    GM should have had the thing HOV-qualified in 2011, Toyota did it in late 2003 for crying out loud.

    As for “playing in Peoria,” the next Volt has to. The current one has to sell to loony tunes like myself on the coasts until costs come down.

    I have one that I bought because I don’t care about the sticker (I have a motorcycle for HOV access) and like the technology. Volts are stacking up on lots here in Los Angeles while the dealers are simultaneously making lists of buyers for the HOV cars, so don’t underestimate the amount of people willing to drop a lot of money to have two hours of every day back to themselves.

    Used Prii with valid stickers were VERY hot commodities until they expired, sometimes commanding more money than a brand new model without said sticker.

    As an aside, there’s a ton of cost to be pulled out of the Volt. It’s way, way overbuilt with lots of content that should be pulled from the base model. It’s obvious that GM engineered the crap out of the Volt cause they couldn’t afford the resources for a proper product development during their implosion.

    I suspect that before this generation of Volt is up (and there’s no way they’re moving 45k of ’em) GM will drop it to a $37,495 base model which will put the car right at $29,995 after credits. That plus HOV will keep the project alive.

    Next gen will be $5,000 cheaper, 500lbs lighter, roomier, and more fuel efficient (electrons and gasoline). I could pull all of that out of the current car myself and I’m nowhere near being an engineer. This car is the equivalent to the first-gen (US) Prius which had the same “issues.”

    • 0 avatar
      KixStart

      “Next gen will be $5,000 cheaper, 500lbs lighter, roomier, and more fuel efficient (electrons and gasoline).”

      Only if they get a real break on battery pricing or packaging. Yes, those things could happen but Toyota or any other manufacturer can take advantage of battery cost and improvement, too.

      GM isn’t even getting leadership with the Volt… the Leaf is selling better.

      • 0 avatar
        galaxygreymx5

        If Honda’s use of Toshiba’s battery chemistry in the Fit EV is any indication, GM will soon be able to utilize far more of the pack’s total capacity and, therefore, use far fewer batteries.

        GM uses about 9 kWh of the 16ish kWh pack in the Volt right now so they can expand the scope of usage as the pack ages. LG and Toshiba both have chemistry available now that can use a much higher percentage of pack capacity while lasting far longer than their predecessors.

        In theory GM could halve the pack size with the new chemistry, simultaneously cutting half of the biggest cost component of the Volt and reducing weight by two hundred pounds.

        Dropping in a proper aluminum engine instead of the de-turbo’d 1.4L iron block Cruze mill will drop another 50 or 100 lbs while reducing cost and increasing range.

        My particular Volt is a base model and has a lot of stupid excessive feature content for no apparent reason. It has smart key sensors on every door (like a Lexus) instead of just the driver’s door and hatch (like a Prius). It’s got an auto-dimming mirror, capacitive center stack, XM, *three* 12V power points (including one in the dash-top sunglass holder?!), an unnecessary second 7″ hi-res touch screen (I don’t have navi), etc. etc. Tons of content for a base car.

        Strip out this over-contenting, dump half the batteries but keep the same capacity, reduce weight and cost, improve packaging, and this car could make the same leap the 2003 Prius made to the 2004+. The Volt could start to make sense on more than an emotional level.

        And because of all of GM’s endless prognosticating they won’t be able to announce “150% increase in Volt sales!” next year, but instead will have the “missed sales targets by 50%” headlines to contend with. Stupid.

      • 0 avatar
        KixStart

        First, I am fairly certain that GM is using 10.5 of the Volt’s 16kwh, so there’s less to be gained in using a greater fraction of the charge. And GM can’t switch chemistries without a lot of confidence that the new chemistry will hold up for ten years with minimal degradation. It takes time to reach that level of confidence.

        Second, Whoa! They’re NOT already using an alloy engine?! WTF is wrong with those people? I was of the opinion that they made some crazy choices in the engine (premium fuel?!) but I didn’t know about this.

        Third, that extra content costs relatively little and helps the car have some whiz-bang presence and I’m sure GM thinks this helps sell the car. Certainly, the stories from people that do buy it tend to focus on the perceived quality and then the value from the gadgets and the torque from zero, as opposed to the price. But I suppose that’s partly rationalization.

      • 0 avatar

        the next gen could be $1,000 cheaper and 1,000 lbs lighter and it would still be no more useful than a paperweight and qualify as one of the world’s leading causes of lot rot.

      • 0 avatar
        Herm

        Battery prices have already dropped by more than half ($450/kWh) compared to when the Volt was announced.. perhaps LG has given GM a break. Going to an aluminum block on the 1.4L will save 7lbs.. that iron block has been weight optimized.

        There are potential savings going to the Toshiba Sicb chemistry but it does take money to certify and re-engineer the battery pack.

        I suspect GM will increase the size of the engine a bit, to 1.8L and then atkinsonize it.. increasing the economy in the hybrid mode past 37mpg combined. The Volt outsold the Leaf this past two months..

    • 0 avatar
      Dr. Kenneth Noisewater

      GM should have had the thing HOV-qualified in 2011, Toyota did it in late 2003 for crying out loud.

      CARB has changed their rules since then, and run out of stickers.

      http://www.hybridcars.com/local-incentives/carpool-hov-lanes.html

      And in 2015 they’ll change ’em again to get the BEVs and CNG-powered cars out of the HOV lanes as well.

      • 0 avatar
        galaxygreymx5

        I understand this, but there’s no rocket science in making a 1.4L gasoline engine qualify for SULEV. This should have been an integral part of Volt development.

  • avatar
    jeoff

    Even if GM had not sold a single car, the Volt served its purpose. GM hyped the car for years; it was part of the justification of its government saving GM.

  • avatar
    jhott997

    So I read the automotive news article.
    More proof GM has its head up its own ass: GM thinks dealers don’t want the cars because they are waiting for a “resolution” of the NHTSA investigation.

    “”There’s a lot of misinformation that has swirled over the past month,” Peterson said. “Dealers are kind of waiting for things to settle down.”
    Again, GM thinks its customers are idiots because they get caught up in the “misinformation”. The arrogance of GM is epic.

  • avatar
    Carlson Fan

    “Hedrick and other dealers say that their GM zone reps aren’t pressuring them to take more Volts. “They haven’t jammed us,” he says. “I think they’ll just give them to somebody else.”

    Enough said.

    “I understand this, but there’s no rocket science in making a 1.4L gasoline engine qualify for SULEV. This should have been an integral part of Volt development.”

    Time and money. Many of the components used in the Volt are “off the shelf”, including the electric motors that drive it. Lots of opportunity to make some substantial improvements with the Gen 2. The Volt was designed with emphasis on EV mode perfromance, unlike the plug-in Prius which is designed to perform in the gas mode.

    “That will especially be the case when the plug-in Prius hits the market in the spring.”

    Differentiating the Volt from the plug-in Prius is pretty easy. The PIP has about a 1/4 of the EV range the Volt has and won’t go over 50 MPH before it starts burning gas. We demo’d a Volt for 3 days and never burned a drop of gas. The PIP would have burned gas all three days. Actually within minutes of leaving the dealership.

    • 0 avatar
      KixStart

      Carlson Fan: “Time and money. Many of the components used in the Volt are “off the shelf”, including the electric motors that drive it. Lots of opportunity to make some substantial improvements with the Gen 2. The Volt was designed with emphasis on EV mode perfromance, unlike the plug-in Prius which is designed to perform in the gas mode.”

      If they couldn’t get it right in 2011, maybe they should have waited until they could get it right. It’s heavy, seats 4, uses premium, gets lousy DBFE and is hyper-expensive. What’s the point of even trying to sell such a car?

      Carlson Fan: “Differentiating the Volt from the plug-in Prius is pretty easy. The PIP has about a 1/4 of the EV range the Volt has and won’t go over 50 MPH before it starts burning gas. We demo’d a Volt for 3 days and never burned a drop of gas. The PIP would have burned gas all three days. Actually within minutes of leaving the dealership.”

      First, it’s 62mph.

      Second, So? The PiP will probably work pretty well for some (I wouldn’t burn any gas in my commute, nor would my wife) and it’s cheaper, so it’s a better and easier decision for some.

      In any event, the Volt DOES burn gas. Hereabouts, in this weather, it burns a substantial amount of it. The difference between the PiP and the Volt is quantitative, not qualitative. At great expense, the Volt will use no gas on short trips and more gas on the long ones. For less money, the PiP will use no gas on shorter trips and less gas on the long ones.

      By the bye, the 62mph would not be much of a problem during rush hour. This morning, nobody was doing over 20 on I-94. In the metro area, the posted speeds are 55 and on the beltway, it’s 60.

      Maybe somebody from Toyota went out and actually looked at the road signs or used radar to measure oncoming traffic speeds when they decided how to set up the car.

      • 0 avatar
        Herm

        The only way that GM will stop recommending premium for the Volt is if they install an automatic Stabil additive dispensing system to deal with aging fuel.. GM engineers talked about this months before the Volt was released, it may actually save them money if they can go back to a conventional plastic fuel tank instead of the pressurized/sealed thick gage steel one they use now.

    • 0 avatar
      Pch101

      Differentiating the Volt from the plug-in Prius is pretty easy.

      Differentiation is in the eye of the beholder. Unfortunately for GM, I seriously doubt that there are very many beholders like you.

      Having a few more more miles of all-electric range just isn’t that meaningful to very many people. As far as value propositions go, it’s just not that exciting. People who are that concerned about that aspect of the vehicle will just a buy a Leaf.

      The problem for the Volt is that it’s too much like a Prius to steal very many of the traditional hybrid customers, and not enough like a Leaf to capture what little there is of the EV market. GM wants to pretend that it isn’t a hybrid, but it basically is in every way that counts.

      If the Volt sells even 25,000 units this year in the US, I’ll be surprised. I may be proven wrong (and I won’t mind it if I am), but I doubt it.

      • 0 avatar
        Lokki

        This.

        There is a niche of people who really, really care about saving the planet through using only purely electric cars. The niche is not particularly big particularly when you start weeding out the intenders from the actual purchasers. There are no doubt many women who would ‘seriously consider’ an all electrical vehicle when surveyed, but who will actually buy SUV’s or van for practicality and safety (not nothing to do with electricity, everything to do with mass).

        There are many young people who believe and who would purchase, but don’t have the bucks.

        There is a much larger group who will consider a hybrid because of gas mileage but who don’t really care about the variations of gas/electric electric/gas or plug-in/don’t plug-in. However, I think that there is enough understanding of ‘range anxiety’ and inconvenience to discourage pure electrics from very seriously appealing to this group.

        I think that 21st century electric cars will get a larger share of the market than they did at the turn of the 20th century, but are once again ultimately doomed to fall back into obscurity till the next resurection at the turn of the 22nd century.

    • 0 avatar
      gslippy

      @Carlson Fan: Agreed on the differentiation. The Prius is cheaper, cleaner, and seats 5. There. Nobody cares about the technology to do this.

  • avatar
    Signal11

    The problem I see with this vehicle is that the plug-in aspect is utterly impractical for the people I know who are its target demographic. IE, people who were early adopters of early hybrid tech.

    They’re all urban dwellers. They don’t garage their cars. The cars are on the street. The particularly suburban ones are in townhomes without garages.

  • avatar

    Volt Death Watch? GM Death Watch? Hello?

  • avatar
    Educator(of teachers)Dan

    My local Chevy dealer (Amigo Chevrolet) has been alocated 1. It has VOLT on it in giant 2 feet tall vinyl tape letters. The interesting thing is they are also a Toyota dealer and have sold most of the Prius in the local area. We’ll see how long it takes to sell the Volt.

  • avatar
    Jimal

    What GM should do is abandon the sales goals for this version of the Volt and use what they can and have sold as the proof of concept while finding other platforms to adapt the Voltec system. The core problem with GM that encompasses all of GM’s problems is consumer skepticism. GM has a long track record of not doing innovative things well. I thiink the Voltec drivetrain in general is a winner in the long run, and perhaps if gas prices spike again the Volt will do well. The last thing GM needs to do is make another short sighted decision and kill it.

    • 0 avatar
      gslippy

      The Cadillac Converj was killed once because it would have cost $60k and gone only 20 miles in EV mode. I suspect it will be killed again.

      If GM can’t sell the Voltec platform under the Chevy name, how will they sell any under another badge, and certainly for more money?

      The Voltec platform is a technological wonder, but has too long of a payback for short-run commuters, and poor fuel economy for long-run commuters. Its price and association with the bailout are buzzkills.

      As for gasoline prices, gas is cheap, since it’s at the same inflation-adjusted level as 1979. Just witness how many F150s and GM trucks are sold.

  • avatar
    Carlson Fan

    “By the bye, the 62mph would not be much of a problem during rush hour. This morning, nobody was doing over 20 on I-94. In the metro area, the posted speeds are 55 and on the beltway, it’s 60.”

    It’s ridiculous to use yesterday as an example when the highways were a virtual parking lot due to weather. If I drive 60 MPH on Crosstown, 94, any highway during rush hour, I’ll be the slowest car on the road in the Twin Cities. I think your wrong about the 62 MPH but I’ll look into it. My point is unlike the PIP, the Volt has no limitations in EV mode and 4X the range. It truly is an EV. The PIP, not really.

    • 0 avatar
      KixStart

      On the East end of town, 94 often backs up to 3M and when conditions are bad or there’s an incident it can back up to 494.

      The idea here is to provide some EV capability for commuters. Most commuters are going to encounter slowdowns along the way. Use the EV miles there. On a 20-mile round-trip commute, between using secondaries to get to the expressways and then creeping along in traffic, much or all of the EV mileage will get used up.

      The Prius PHV isn’t a perfect solution… it’s just a reasonable approach designed to hit a price point that makes it tolerably attractive. After the small battery goes dead or when the road clears up and you can do better than 62… you go on gas. It’s not a car for the EV-freak purists. For the typical commuter, it will likely use considerably less gas than the already thrifty Prius.

  • avatar
    fsuszka

    MrWhopee, political football? Why is that do you suppose? We bail GM out with our tax dollars that could better be spent on other things, they owe us billions and haven’t paid back one dime to date and oh yes, the poor performance of the vehicle, the safety issues and the outrageous cost of ownership. Obama tells us that GM is doing well and they turn around and are thinking about building the Volt in China? They what? Yes you read correctly. Why not, GM workers are being paid upwards of $75.00 an hour so why not build it off shore and save on labor costs. Not to mention giving away more of our high tech technology. So what do we have? A president that isn’t telling the truth, “again” and an overpriced poor performing car that will eventually become their “Edsel” at our expense. It doesn’t matter what political party you belong to. It boils down to the fact the car is an overpriced failure that no one wants. (You know, like Obamas failed economic policies.) You even said the Prius is better. Hard to believe you said that in light of the content of your post. You also said, “I’ve observed that, if you’re a certain kind of loyal Republican, you’re supposed to hate on the Volt and say something negative about “Obama” whenever the car is mentioned.” Not only the car Mr. Whopee, don’t forget the “bailed out” financial institutions. Oh, by the way Mr. Whopee, I hold no allegiance to any political party in case you want to use that in a reply. I am non-partisan and always have been. The bottom line is economics.
    As you so aptly pointed out, this was a “concept car” back in 2005. Pointing out that Bush was in office is like blaming him for Obama putting us in debt. What if, (I like playing this game), what if Obama was president at that time. What would you say then? You have presented a biased reply. Obama wants everyone to buy “electric cars” in the hopes of reducing energy, producing clean air and getting away from foreign oil. Hmmm Right. In theory it works well. In actuality it leaves a lot to be desired. You’re “sort-of” isn’t a political punching bag. It’s reality. Drive electric cars, use more energy, burn more fossil fuel and pollute the air more. Yeah that makes sense to me. Why not.
    You stated you frequently mistake thinking that technology is about technology and people should make decisions based on this? Why? In these hard times I think about the technology but base my decisions on what I or in this case, my family and I can afford. I’m not going any further in debt to have one of these overpriced poor performing vehicles regardless of what Obama says. What will it cost me to own this better than sliced bread technology. I’m pleased you get schooled on this belief. I would imagine that the schooling comes from you very astute and intelligent wife. I commend her for her observations if this be the case. Your post script has many well put points. It negates most of what you said in the bulk of your post. With the economy being what it is and jobs being hard to find, I would stick with the shoe that fits. If I want technology in a vehicles, I will look toward a more even keel kind of car… I mean after all, the Ford Eclipse gets what??? 40MPG, parks itself and talks to you? BWG Listen to your wife. More men should listen to their wives. The would have less trouble.

  • avatar
    chiefhighliner

    Another person said it perfectly: you can’t sell a $41,000 economy car.
    I will never buy an electric car in this lifetime.
    The people who control the energy will just raise the rates.
    Since we drive gasoline-powered cars, we are at the mercy of the oil companies. They can charge whatever they want and we have to pay it or we can’t drive.
    If everyone had electric cars, the price of electricity would quadruple or quintuple, just like gasoline did. In 2001, it was about $1.05 a gallon. Now it is $4.00 a gallon and higher.
    So, no matter what we do, the greedy corporations will always take advantage of the poor.
    There is no way under the sun I would pay $41,000 for a car unless it was a cool car like a Mustang or a Camaro.
    I think better still–since 90% of all commuters who drive have no passengers–is a cost-effective and safe jet pack. We need to rise above the traffic. Hang it all, it’s 2012, how long do we have to wait for our cool invention??? The telephone, the phonograph, the TV, personal computer, what have you. Where is our really innovative invention that can change the way we live? And I’m not talking about a 4-G cellphone or some chinzy gadget, but a life-changing invention. A revolutionary invention. Something that gets us off the ground!

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