Though Nissan has recently disclosed some details on how to order the LEAF EV, GM has not officially released the Volt’s MRSP or sales mechanism yet, and claims they won’t do so until the summer.
I did have the chance to discuss issues about how these decisions might be made with Jim Campbell who is GM’s new Chief of Chevrolet
Do you anticipate a conventional pricing scheme for the Volt or are you looking at a surprise or battery lease?
Obviously we haven’t priced the Volt yet. That’s going to be my job on the Chevrolet side to lead that effort with our team. One of the previous assignments that I had was to manage our retail advertising. I’m familiar with a lot of the different tools we have in our toolbox, and I’ve been involved in my whole career on pricing activity when I was at Chevrolet previously. We haven’t priced it yet, we’ll look at all the options we have to make a smart business decision and proposition to the consumer. That’s going to be one of the tasks at hand as I start my new assignment.
So you have two very dramatic and intense tasks managing the demand and the price of the Volt .
Yes those are both very important.
Do you expect to do a special pricing/selling scheme or straight MSRP?
That will be part of the whole pricing process. We’re already deep into it but I don’t have anything to announce yet. The pricing responsibility is in my shop.
Can you say if battery leasing is being considered?
No.
Is there any chance GM will get the cars out earlier than November?
I would just say we’re on our plan to bring it out by the end of the year, and that’s where we’re at right now. I’m excited to be back at Chevy on this team to prepare the launch of that vehicle and other new vehicles like the Chevy Cruze. We’re on our plan, well produce them by the end of the year.
I heard Maria Rhorer was reassigned. Will there still be a position of Global Volt marketing director?
There definitely will be, there’s no question about that. I’m in the process right now of identifying the person. In the meantime, I’m heavily involved with members of my executive staff.
I’m in the process right now of identifying who’s going to lead that process for us leading the Volt.
What do you anticipate the lifecyle to be from when Gen 1 launches to Gen 2?
We talked about early adoption of technologies. If you look at new technologies in other categories sometimes those generations one two and three come very quickly, sometime it takes a little more time. So I’m really counting on our engineering leadership to really set the timing on that and to make the right decision on that front.
This entry was posted on Tuesday, February 16th, 2010 at 7:20 am and is filed under Launch, Marketing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Feb 16th, 2010 (7:31 am)I’ll take two – one as an EREV, one to scrap the ICE and use as an EV platform.
+10
Feb 16th, 2010 (7:32 am)Lyle,
Alas, his response on battery leasing is clear as mud.
“Can you say if battery leasing is being considered?
No.”
As in, he can’t say if battery leasing is being considered. Nice try.
+2
Feb 16th, 2010 (7:34 am)How could they have not priced out the Volt yet? By this point in time, they know the cost of each part that will be used to build the car. They have built enough to have a close idea of the labor required. And the capital costs to get the plant into operation should have all been detailed. The R&D costs are already spent, so those numbers are there.
This just sounds like doubletalk to me.
So what will they know in May that they do not know now?
Or do they price their cars by flipping a coin?
I guess I would not do very well in “big business”…..
+8
Feb 16th, 2010 (7:35 am)Nothing new here. We want a price ASAP. On a side note, it is good to see the LEAF get press, if nothing more than competition. I want my Volt!
+7
Feb 16th, 2010 (7:36 am)Boy, *he’s* slippery! Shrug.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (7:42 am)Well, it sounds like things are proceeding along on schedule. Meantime the roller coaster ride continues. We just need to stay t.. . oh, no I did not say that did I?
+32
Feb 16th, 2010 (7:42 am)At least with Bob Lutz, you know exactly where the guy stands. You may not like what he has to say, but he gives you an answer to a question…………
This guy uses 100 words, but says nothing, IMHO.
GM needs decision makers, not rule by committee weenies that are afraid to tell you the time for fear of making a mistake that will cost them their job.
+9
Feb 16th, 2010 (7:43 am)I’m sure they know the “cost” side of the equation, but until they know the mileage formally (to be tested this Spring) they don’t know what to sell it for – if it gets 30 mpg in CS mode – or if they get 60+ mpg in CS mode – big difference. I hear (on here) that pricing usually happens a few months before a car’s release.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+6
Feb 16th, 2010 (7:48 am)I’m not “in the business” like some that contribute, but the *major* new variable will be the startup of manufacturing in March. I’d guess that they need about 2 months of debugging and then they will have an idea of what the real labor content will be on the assembly line.
Also, I would guess that because some key components are purchased (traction motor, controler, generator) there may be any number of costs involved in getting a smooth flow of components.
+6
Feb 16th, 2010 (7:52 am)“Can you say if battery leasing is being considered?
No.”
********************************************************************
All he’s answering here is he can not say to the public if it is being considered. That does not mean it is not being considered.
+2
Feb 16th, 2010 (7:56 am)The worker bees have probably developed a range of pricing options, contingent on factors to be finalized much nearer to launch. Pricing is an iterative process, but Cambell will make the final call. Two factors leap out, the price of the competitors products (Prius PHV) and the price of gas.
Feb 16th, 2010 (8:00 am)Lyle, FYI, I’ve had to turn “compatibility mode” back on using IE8. This is because sometimes IE goes into a loop processing scripts, usually after most of the content has been displayed. This in itself causes some negative effects, (the poster’s name partially overlays the line below it).
+18
Feb 16th, 2010 (8:01 am)Right. And I am not buying a car for $32k-$40K and then have to lease the battery.
+4
Feb 16th, 2010 (8:02 am)Tag: Don’t you really think that by now they know exactly what the CS mode mpg is? It is less than nine months from delivery, and that number is pretty important. We are just not being told, which I think is for competitive reasons, and that I agree with. There should only be minor software tweaking going on at this point, don’t you think?
John K: I am not in the auto business either, but there has to be some long lead times for major components. I would think that purchase orders for those items have already been placed with pricing agreed upon. These are not off the shelf items, and can’t be sourced on short notice.
Or am I missing something???
+4
Feb 16th, 2010 (8:03 am)Just as a point of interest – at the Detroit auto show, the rep that was showing the Volt DID say that leasing was being considered and also selling the Volt minus the battery for $5000 less to accomodate leasing the battery.
+1
Feb 16th, 2010 (8:04 am)Old habits die hard! (lol). You only raised the hair on the back of my neck – on the *left* side (g).
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+1
Feb 16th, 2010 (8:07 am)No, but I can imagine that there may be signifcant cost items involved in transporting, expediting, overtime (when scheduling gets out of wack), … I imagine that the first few months of components are already in house or on the way, but when they crank up the volume all kinds of things can go wrong. Economies of scale can actually be negative if things go wrong. I have to believe that some key components are made outside the USA.
Feb 16th, 2010 (8:09 am)Good point. I *always* seem to assume that they are already producing them. Even if they *were* knocking a few out now, they’d still need to do those things you mention.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
-1
Feb 16th, 2010 (8:09 am)*********************************************************************
GM does not have to give out information if it can gives it’s competitors an advantage.
Toyota must be run by “committee weenies” because you can not find a more secretive company.
+3
Feb 16th, 2010 (8:15 am)Yeah, Jim, I think they have a very good idea, but the EPA testing will actually determine the number that they are allowed to use. Kinda like studying for the college boards, but not knowing what your score will be. JMO. I’m anxious to know too – price AND mileage!
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+4
Feb 16th, 2010 (8:21 am)Well, *that’s* concerning! When I buy a Volt, I want to own all of it. Leasing is a deal-breaker for me (and it’s hard to think of many other things that fit into the category of deal-breakers). Poor fit and finish would be the other one, but I’m getting off topic!
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (8:23 am)i am sure that they already know what the labor content is and are involved in building operator assignments by working in their team.
One thing being watched very closely would be the competition and their pricing in preparation for their new model releases.
Also they will be keeping a close eye on the oil futures and the political situation overseas.
Would expect they would dearly like the feds to allow the $7500 to be applied to the purchase price someway.
+2
Feb 16th, 2010 (8:23 am)Rashid, I agree completely with you. That would be a double whammy, especially after the teaser of possibly releasing it with a price in the low $30′s.
I am a guy who has for several cars steadfastly refused to consider a vehicle over $20K. So now I’m looking at $40K and even being comfortable with it. But if they jerk us around too much I don’t know… I’m willing to pay a $15K premium just to be an early adopter (well, maybe before the $7500 rebate) and in this regard I feel like it is a public service to help make it affordable to others.
I hope they don’t press us too hard. But to some degree that is part of the game I guess. They have to test the waters.
+31
Feb 16th, 2010 (8:25 am)Lyle,
Why do you even bother to talk with this guy?
You interviewed him back on Feb. 8th and he contributed nothing to our knowledge of the Volt, and he has done the same in this interview.
Interview me next time, and I’ll give you the answers (pick from the following std responses):
1) We are still reviewing that
Stay tuned
2) That’s my responsibility but we haven’t made any final decisions
3) NO!
4) Blah, Blah, Blah, Chevy Cruze, Blah, Blah, Blah
5) We’re still on track
6) I think so
7) I’m not going to make any announcements right now
+4
Feb 16th, 2010 (8:38 am)The questions that comes to mind are: How will answering the questions harm GM? What is in the answers that GM is afraid to mention?
I give credit to Mr. Campbell for speaking with Lyle. This in itself says a lot about GM wanting to keep a finger on the pulse of the EV buying base.
=D-Volt
-2
Feb 16th, 2010 (8:43 am)The car is really too heavy to be suitable for use as a pure EV. I would suggest you take a look at Tesla if you are serious about a pure, well engineered, light wt EV.
+5
Feb 16th, 2010 (8:44 am)Why are they always eager to shove a Cruze down our throats when asked about the Volt? How many people do they think are going to go into a showroom and say, “oh you don’t have any Volts and won’t have any for 6 months…ok give me that Cruze over there instead”?
I’m all for promoting across the brand, but know who you’re talking to. That’s not going to work for the guy from gm-volt.com nor its readers.
Feb 16th, 2010 (8:51 am)I dito that as of yesterday.
+5
Feb 16th, 2010 (8:56 am)BillR,
I’m totally with you on that. This guy was a big waste of time.
-1
Feb 16th, 2010 (8:56 am)Already have a Tesla, not going to tear it apart.
At the worst, I by pulling the ICE (etc.) out of the Volt, I have a 40 mile range EV. What to do, what to do – the possibilities are endless.
Feb 16th, 2010 (8:57 am)Lyle,
I change my post to “as of today” IE8.0 still hangs on the site.
+2
Feb 16th, 2010 (9:12 am)John, I suggest that you get FireFox. It is a superior browser with none of the problems you are experiencing with Microsoft.
http://www.mozilla.com/en-US/products/
Happy trails to you ’til we meet again.
+5
Feb 16th, 2010 (9:13 am)For the 2010 Equinox, they were reporting 30 mpg highway up unitl the last minute. Then they tested and got 32 mpg highway for the final.
For the same, they were still adjusting the transmission software shifting logic 5 months after the production began. Things probably are far from settled with the Volt and they are on a tighter schedule.
I give them the benefit of the doubt. There is nothing nefarious going on. They are simply producing a car on a tight schedule with many things coming together just in time.
Go Volt.
+9
Feb 16th, 2010 (9:19 am)_______________________________________________________________________________
GM’s Jim Campbell said:
“…That’s going to be my job…our team…assignments…toolbox…my hole career…proposition to the consumer…assignment…pricing process…in my shop…in the process right now…I’m heavily involved with members of my executive staff…I’m in the process right now of identifying how’s going to lead that process…I…I…I…process…process…process…”
Mr. Process Jim Campbell: -1
Hope he doesn’t do too much damage to the Voltec Program.
_____________________________________________________________________________
+4
Feb 16th, 2010 (9:19 am)This may not work for the electric car nerds (for which I am one) at http://www.gm-volt.com but it is a real benefit to the public at large.
The Cruze will actually be sitting on the lot and GM can actually sell them in large numbers. That is not true for the Volt. It is wise for GM to try and remind people about the cruze. If it truly gets 40 mpg highway, it will be a great car for the masses.
GM needs to cruze to make some money. This benefits the Volt too. If GM’s plan is to rely solely on the Volt to make money, GM will not be around in 5 years.
+2
Feb 16th, 2010 (9:27 am)From bits and pieces of information coming from the GM test drives and interviews. Seems like the CS mode mpg in the test mule was about 38-39. Factor in the advanced areo of the production Volt. And time tested driveline and tire tuning. I would expect upper 40′s mpg. This raises the question: Why the recently added aggressive air dam on the front of the Volt? Perhaps to achieve an even 50 mpg? Sounds a lot better than 48 mpg. And is just enough to top the Prius.
=D-Volt
+1
Feb 16th, 2010 (9:38 am)sounds like he didnt really want to talk with you. Comes across as an a$$ to me.
+5
Feb 16th, 2010 (9:40 am)It’s nice to know that he knows just as much about the final price as I do.
+12
Feb 16th, 2010 (9:55 am)Give GM a break guys! The Volt is still a work in progress. Remember, we are talking about the best engineered, most revolutionary car in automotive history. And the most transparent development process in history. Our problem is it is hard to be as patient as we need to be. Hang in there, it’s only a few more months.
+4
Feb 16th, 2010 (9:55 am)Cars are not priced based on the cost-to-build. They are priced for the market based on where the product sits with competitive offerings, within the current lineup and the actual market in which they are sold (among other factors). The price-to-sell has a little to do with the cost-to-build, but not much.
Ever hear of a ‘loss leader’? Cars are sold with this and other marketing tricks involved. Trying to analyze the cost of the build to the price to the consumer is a good way to go crazy.
+3
Feb 16th, 2010 (10:00 am)It is interesting to me that this guy would grant an interview and then not say anything. Sort of reminds me of a politician on any issue in debate: “I agree with you to the extent that what you say you have a right to say but you could have chosen a better way to say what you said and I am not sure that I agree with that?”
+3
Feb 16th, 2010 (10:08 am)Although it’s clear Mr Campbell had very strict limits on what he could disclose, credit to him for ‘showing up’ to talk.
——————————————————–
You are correct, the Voltec Program and any other successful program lives and breathes by process. If your processes are poor the program WILL fail.
Process planning/maintaining isn’t sexy, but without solid processes you are planning to fail.
+9
Feb 16th, 2010 (10:16 am)Quite possibly, (and please excuse this over-simplification of the many co-variant factors obviously involved), but my team and I have, for quite some time now, been remarkably successful at working toward substantially clearer and prioritized goals and objectives, from which, in due course, we expect will coalesce reliable and doable estimates of a largely sustainable, competitive set of price point levels, and eventually quite possibly, the final (pending board approval) MSRP may likely emerge, within of course, a reasonable range.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (10:16 am)We have a friendly pool going in the forum (Engineering Section) on CS Mode MPG. The slots are in 2 MPG increments and the estimating competion is for the EPA HWY sticker mileage. Sharpen your pencil, use the best tools you can find to hone your estimate and enter to win the respect and admiration of all fellow Voltheads:
http://www.gm-volt.com/forum/showthread.php?t=4177
+10
Feb 16th, 2010 (10:20 am)Amen to your post. They have to let the engineers work, and drama build … now I know how my Dad felt when we kept asking “are we there yet” when taking the long car trip to Grandma’s. Nobody wants a half-baked cake.
+2
Feb 16th, 2010 (10:22 am)You obviously haven’t got it clear in your head that they are planning on and absolutely have to sell a LOT more Cruze’s than any other model in the next few years.
This isn’t a conspiracy, it’s because it is their entry into the highest volume sector in the market.
If you want any CHANCE of getting a Volt then they NEED to sell a lot of Cruze(es)!
For GM to survive the Cruze needs to be a hit.
I would hope that the folks here at GM-VOLT.com are smart enough to understand this fundamental truth.
I think most are.
+2
Feb 16th, 2010 (10:27 am)Tag my friend, you are funny!
+5
Feb 16th, 2010 (10:33 am)This is all new steps for auto industry….there’s no other cars like the volt to compare.
Even Toyota and Honda are very different from Volt technology.
Remember that there are many variables involved…
Fuel prices,
fiability of battery packs,
new softwares,
new clients than never buyer a chevy(like me)
and the principal issue:
the other brands are watching volt project like a satelite!
Any wrong move can be desastrous to chevy.
So, i thin. They are trying to see what will hapend to all this variables until the Volt is in the market.
I hope I get one soon( Opel Ampera )in Portugal Because I believe in the Volt.
Be good
+2
Feb 16th, 2010 (10:43 am)Thanks for pointing out all the positives that we are blessed with here at gm-volt.com! Without Lyle’s site (and GM’s choice of a transparent development process), it’s literally hard to imagine how much we’d have missed so far. The Volt is only recently popping up on other sites (mostly green sites) and even then it’s only one of hundreds of other low emission/low gasoline options in development.
I shudder to think of waking up to find that my Volt “fix” is missing. Even worse is the thought of what it would have been like to not have had gm-volt.com at all.
+1!
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+1
Feb 16th, 2010 (10:46 am)THANK YOU Loboc! OK so I only took 2 economics courses in college, but I have to admit they were eye openers. Price is not determined by cost of production + x% profit, but more like by “what the market will bear”. If people are willing to pay $100 for a widget that costs you $1 to build, are you going to sell it for $1.50 or $100? Chevy probably won’t price the early Volt at the price they really could, the fact that people will buy them and re-sell them immediately at a profit shows that the item is underpriced.
Of course the final goal is to set the price and production to maximize (profit on each)*(number sold), but in the initial stages they’ll have limited production. Early buyers should just be happy they’re not setting the price based on what the market would bear — the highest possible price that just barely gets the cars off the lots.
And as Loboc said, sometimes an item is priced below the cost of production, either to build a customer base, or to put the competition out of business (cough, Microsoft tactics, cough).
Wow, my edukaychun wasn’t a total waste! So I’m no econ whiz, but the the point is that the cost of production is a non-issue.
+1
Feb 16th, 2010 (10:58 am)What a lovely tap dance!
He said nothing except that he’s responsible, and he has nothing to say.
-1
Feb 16th, 2010 (10:58 am)Just as an aside…
I DID install Firefox because gm-volt.com kept crashing my IE8 install but lets be clear, IE8 opens in about 5 to 7 seconds on my older laptop where Firefox takes 75 to 90 seconds before it is usable.
I have yet to try the ‘new’ site on IE8 but might just do that today.
Just trying to keep it real.
Feb 16th, 2010 (10:59 am)This guy is in CYA Mode. His comments are geared more toward–How fortunate GM is to have me here–Lee
+1
Feb 16th, 2010 (11:14 am)Thanks, Muddy RR (g). Was I clear enough?
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (11:14 am)Is he the one that financed the incredibly bad “dance?” commercial…?
He seems to be a bit self centred….. (be grateful that I (GOD) am here..)
also… I am using IE7 and the names and dates are jumbleup and the comment number is too big as it is getting cut off…
just saying….
+2
Feb 16th, 2010 (11:18 am)===================================
Cost of production is a non-issue????? Are you kidding me?
No wonder GM went broke, if that is how the corporation is run!!
I can understand a short term introductory pricing scheme, to beat up competition or build a customer base, but to ignore costs completely???
Aveo is a loss leader, the Volt should not be, IMHO. This is new technology, so why do people think it should be priced the same as the Prius, whuich has had ten years to work on getting the costs as low as possible?
This car is a better design than any existing hybrid. So why price it like a K-Mart blue light special right out of the gate??? I think that is a mistake….
+1
Feb 16th, 2010 (11:23 am)The best way to get the Media to leave you alone is to always be boring and tell them nothing.
I suspect this guy wants to be left alone and not be interviewed again.
Who agrees that Lyle should do that?
(Voting can tell Lyle the answer.)
Feb 16th, 2010 (11:23 am)why is everyone ignoring the quote from Bob Lutz yesterday?
““GM will lose money on hybrids,” . . . . –and the cost will be spread across other cars.”
There’s an amazing amount of creative accounting to allow GM to price the VOLT however they wish.
“The high-efficiency air conditioning that was developed for the Volt can be used in 3,000,000 other cars (per year for the next 10 years). We’ll spread the cost of development over all the cars that will use it”
or
“We’re getting a pile of carbon credits for each Volt produced, we’ll take it all off the price of the Volt and spread it over 6,000,000 other cars”
or
“The factory has a (10 year, 20 year, 30 year, 40 year) depreciation. It’s not all for the Volt, so we’ll only apply a small percentage.
or
“Let’s lease the factory, we’ll give them a 99-year lease so we can depreciate it twice as long”.
GM can price the car wherever they like and come up with some way to justify it (BTW, wasn’t a LARGE amount of the development cost erased with the bankruptcy?)
Feb 16th, 2010 (11:27 am)Lyle, we do very much appreciate your efforts to keep us informed here. I’m sure it is difficult to come up with material some days so I was wondering if you might be able to find out more information on the Bose sound system? I understand it will be lighter in weight and much more efficient while still producing quality sound. I am mostly interested in what kind of speaker drivers and how many there will be. I would like to know if there will be 2 active equalizers and or any other specs. Thank you
+3
Feb 16th, 2010 (11:28 am)Having been in a manufacturing environment, I can tell you that they probably do NOT have all the final numbers. The price we pay for a few hundred parts on a pre production run of a prototype, is VASTLY different than when we ask for pricing on 10,000 units, economies of scale and all that.
likely they are tendering out for fixed prices based on expected volumes at this point to get that number, then they need to do marketing to find what will sell.
it is NOT a WAG, pricing is very involved, a bit of costs, expenses, competitive prices, and a dash of “what do I think I can get for it”..all must be balanced. (obviously this is a MAJOR oversimplification, and believe me, many meetings are held where I am now to analyze where to position your pricing)
It is interesting, I ran a retail parts store, and our best brake pads (in quality terms) were sold at a minimal profit due to the fact they were not “lifetime” warranty, but the piece of crap off shore, we could sell them at more than the best because of that warranty, we sold a TON of em and made HUGE margins. that was the “what can I get for it factor”
Feb 16th, 2010 (11:30 am)Pretty much.
Quite true…though a lot of amazingly bright people have been involved in business failures over the years.
Feb 16th, 2010 (11:32 am)Well over a hundred posts yesterday is hardly “ignoring”. We beat that horse till it wasn’t moving much. JMO
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (11:38 am)allow me to rephrase.
“why is everyone ignoring the quote from Bob Lutz yesterday IN THIS THREAD?…
Feb 16th, 2010 (11:43 am)from an article analyzing the Tesla IPO documents, it looks like they’re getting more than $11,000 per car produced in carbon credits. I assume GM will also be getting credits for the Volt that can be applied to other models, but I would think that they could reduce the price of the Volt by an equal amount.
“What’s Tesla selling besides cars? In addition to sales of the Roadster itself, Tesla has drawn $11.1 million in revenue by selling zero emission vehicle, or ZEV, credits to other automakers since June 2008.”
http://earth2tech.com/2010/01/31/tesla-ipo-12-things-you-should-know-about-tesla/
+2
Feb 16th, 2010 (11:52 am)#32
Yeah, I finally broke down and did it after all of you guys suggested it. It really is better, IMHO. +1
-1
Feb 16th, 2010 (11:54 am)yaknow, I have always wondered how in the he11 does a company sta afloat selling at a loss for years? But that’s just me.
That’s a big yes, they flushed the debt all away, so theoretically there should be no attempt to recover R&D costs from before the BK. But there is still R&D going on so technically there’s cost. Not anywhere close to as much as they flushed down the BK toilet that accumulated for 3 years but there’s still some cost.
I did not read the previous posts over the weekend (no internet @home) butit sounds like they will spread the loss of the Volt sales accross the other cars? So does that mean the Cost of a Cruze will increase or will include loss cost for the volt and the same to th rest of their models? Sounds like crap to me.
Feb 16th, 2010 (11:56 am)I dunno…if I was in that position I would be most concerned about creating a price now (low volume introduction)that would have some kind of rational relationship to the pricing schemes that evolve over time and not freak out all the stakeholders. From my outsider view it seems many of the connections to a pricing model are broken, dynamically and moving away from predictable position.
With all of the variables casacading off of a brand new line with newly marketed technology, the changing consumer, environmental, governmental and technological expectations in a economy arguably with no prior precedent, the price chosen today likely won’t make sense soon.
So my question is how will you set a price today and adjust it over time without upsetting the apple cart. I had always surmised that part of the answer would be to let other iterations like the Converj absorb some of the pressures. Which may work of costs trend higher for the Volt than predicted. Also gen II and III are clear points for price adjustments – and hopefully downward.
I apologize if this makes no sense at all, I’m definitely not a pricing expert. Just airing questions I’ve had all along.
Feb 16th, 2010 (11:57 am)Not sure why Firefox would be so slow to boot. I’ve used both on several relatively old machines and FF *always* booted more quickly than IEx. I could see why that’d be a hassle.
Was it you who had someone else install it for you? Maybe they changed the security settings to max or enabled addons. I’d try uninstalling FF and downloading a new copy to install. The spell checker alone in FF is worth it for me. JMO.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (12:05 pm)I did read the posts over the weekend and didn’t come away with the idea of cost spreading at all that I can remember. I may have missed it, or Prowler’s post may just be the one that caught your eye. SHRUG. Maybe someone can point me to it, if I missed it.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+1
Feb 16th, 2010 (12:05 pm)To piggy back on his message, most large companies are MS shops (like us) and FF is not allowed, except for IT nerds. It would be wise to make sure both browsers render the same.
Just a thought.
Feb 16th, 2010 (12:07 pm)Just a moment ago the problems (except for the +- numbers obscurred under the thumbs up/down) have gone away for the browsers being run under Vista OS. Never had the problems with XP. As earlier Firefox 3.5 and IE 8 render virtually the the same.
Feb 16th, 2010 (12:08 pm)Here you go tag…..
““GM will lose money on hybrids,” he told reporters. “We will continue to build them–they are required by (Corporate Average Fuel Economy regulations)–and the cost will be spread across other cars.””
From yesterdays post: http://gm-volt.com/2010/02/15/lutz-hybrids-and-evs-wont-surpass-10-of-us-market-share-for-10-years/
+1
Feb 16th, 2010 (12:15 pm)Of course, the cost of production matters! They’re not going to sell the Volt below marginal cost. (What it costs them to produce each extra unit.) Period. However, not all compensation takes the form of cash from consumers. It can also be expected additional profit from other models from having met cafe. It can be benefits from advertising and perception, etc….
However, for the Volt to be a success, they also need to recoup their fixed costs. And, if we ever expect them to increase production, the Volt has to sell at a sufficient margin to justify further fixed costs. Or at least, they have to expect future Volts to sell at sufficient margin justify further fixed costs to increase the volume by a set amount. (Of course, the initial development costs are a huge part of the fixed costs, and there are economies of scale, etc…) It’s complicated.
Feb 16th, 2010 (12:15 pm)They likely have a “good idea” of costs, but its a matter of nailing it down, Kaizan”ing the line, where can we save, they have 8 months, set a price now, and if gas spikes this summer (like it is expected) then maybe you can massage the #’s a tad to “get what you can” If the price of gas is at a buck, then they must price it low as no one will want to pay a premium. but if gas is 6 bucks, then you go up, becuase high mileage will be infinitely desirable.
don’t count on a fixed price for some time…
Feb 16th, 2010 (12:19 pm)Captn,
Just went back an “searched” the comments yesterday for the word “spread”. It’s used in the quote from Bob and in a different sense in ONE comment. I’m choosing to not read every comment, but I still don’t think that spreading the price was much of a concern voiced yesterday. Could be wrong. At least one of us isn’t concerned about it (g).
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (12:21 pm)Welcome back LauraM.
Be well,
Tagamet
/going afk for a bit. bbs
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+1
Feb 16th, 2010 (12:22 pm)You’re hired…can you start today!!!
+1
Feb 16th, 2010 (12:27 pm)I’m near the end of lunch break and only down to post #42, but just HAVE to say this.
You guys are just great! An interview that has almost nothing new, but still the comments are very informative and uplifting. And though I haven’t noticed one yet today, but even a troll helps lift the spirits from time to time.
LJGTVWONT – NMST
Feb 16th, 2010 (12:29 pm)How do you do this without driving future buyers, previous customers, the board, media, government/shareholders, future investors & would be bondholders plum loco? Can prices fluctuate for cars and not make OEMs look incompetent and dealers look rapacious? Opportunity to adjust level of incentives on a brand new hot model will not exist yet.
+2
Feb 16th, 2010 (12:35 pm)Hey, the voting thingies are back!
Feb 16th, 2010 (12:36 pm)Re: my last comment (78), makes me wonder: how many of you folks really are in “the business”. And if this is true, what does it mean for the appeal of the Volt? Just askin’.
+1
Feb 16th, 2010 (12:40 pm)OT but something for all those advocates for Nuclear Power and power Independence…
http://business.theatlantic.com/2010/02/5_reasons_to_cheer_obamas_nuclear_ambitions.php
“Today, the Obama administration is expected to announce the start of a new campaign to ramp up nuclear power production in the U.S. after a three-decade lull…..”
+2
Feb 16th, 2010 (12:43 pm)Plus one for this comment. You can see why GM got in the fix it’s in. Other than telling you how important he is and all the things he is responsible for, and all the things he’s done, he’s a fount of nothing but corporate psychobabble (“tools in the box” etc). This may be totally unfair but it looks like the Peter Principle at work to me. Probably should have stayed in retail advertising where he was probably successful, though GM hasn’t exactly set the standards there. This type of performance gives empty suits a bad name.
+2
Feb 16th, 2010 (12:45 pm)Because they’re not losing money on a marginal cost basis. Only on a fixed cost basis. Which means that the more they make and sell, the less money they’ll lose when you take all the costs into account.
The auto industry, in general, has a high ratio of fixed costs to marginal costs. The fixed costs aren’t just the R&D and product development and marketing. (All of which have to be ongoing.) It’s building and renovating factories. And the tooling for the individual the assembly lines. Which is expensive. And, to make matters worse, the UAW has managed, to a large extent. to make labor a fixed cost.
This, by the way, is why for the past 20 or so years, the domestic auto industry has spent less on fixed costs than the Japanese companies. They anticipated lower margins, so it didn’t justify as much investment. No one goes into a business trying to lose money on a total cost basis.
As far as staying afloat–they haven’t. However, they are GM. A company that, historically, was one of the most profitable in American history. So they were able to borrow lots of money, at a much lower rate than they would have been if people had realized what was going on.
And, to be fair, the auto business can be very profitable. And they did make money on financing. If some of their investments had paid off, or market conditions went their way. They might have been able to pull it off.
Feb 16th, 2010 (12:50 pm)This quite possibly might be the funniest thing ever written on this site. You might have the makings for a second career writing for the Colbert Show! My only suggestion would be that you’ve emphasized “the team” more than he would.
Feb 16th, 2010 (12:53 pm)Hmm, I think you nice people misunderstood. Yes, 99.5% of the time you will price the item above the cost of production and make a profit, and you can bet that GM has calculated the cost of production of a Volt and that figures into things. But to think that they add up the cost of each part and the labor, and then add a fixed x% profit to calculate the price, is very naive. I admit that’s what I thought before taking ECON-101.
I recently bought a model airplane part for $15 from Hong Kong. I just saw the same part from a domestic vendor for $75. Why $75? Because that is what they think consumers are willing to pay for it. If they lowered the price to $20 they wouldn’t sell all that many more, so they might as well soak a smaller number of buyers and maximize profit.
The Chevy and Buick come off the same assembly line, use many of the same parts, have the same cost of production and yet the Buick costs more. OK dumb example but you get the point.
Feb 16th, 2010 (12:55 pm)I understand what you’re saying but I kinda doubt they’re looking at it this way. They have strategic reasons for pricing, most of which is positioning, and they need to contend with factors like the fact that dealers like to make a profit and they don’t want transaction prices way above MSRP. Plus fixed and marginal costs are great in textbooks but it’s difficult in the real world to sort this out.
+1
Feb 16th, 2010 (12:56 pm)Basically, some of the compensation GM expects to get from the Volt (and the Cruze) is in the form of being legally allowed to build and sell more Corvettes and Camaros. At least, that’s how I read it.
Feb 16th, 2010 (12:59 pm)Can we know if this is susainable this early?
Quarterly vs. long term outlook? High legacy costs vs. protection of large export oriented businesses bias.
Feb 16th, 2010 (1:00 pm)Thank you.
Feb 16th, 2010 (1:01 pm)You think there may be a little more to it than that?
+1
Feb 16th, 2010 (1:01 pm)Carbon credits? Like what prowler @64 sez?
If not that, what kind of compensation do they get?
Pardon my ignorance on this issue.
Feb 16th, 2010 (1:04 pm)Hey, site renders fine in Google Chrome too!!!
+1
Feb 16th, 2010 (1:05 pm)It sounds to me like he was told to give Lyle an interview, but he wasn’t allowed to answer any of the questions Lyle asked. I think he did a great job of equivocating.
Feb 16th, 2010 (1:09 pm)This is why it’s so difficult to go from a ‘push’ model to an ‘order’ model. They need to build a certain amount of cars to spread the cost over more units. If they push out product with little regard for demand, then, they get their cost-per-unit lower.
Unfortunately, if you over-produce, you need to take a profit hit to move the product (or dump it in another market). They are basically using marketing budget as direct incentives and have done so for years.
The bankruptcy was the incentive (directive?) to stop the madness. I think we will see leaner inventories going forward with the ability to get better option choices.
Feb 16th, 2010 (1:10 pm)I dont think so, someone explained it on this site a few months back.. if I remember correctly the credits and expenses of developing the Volt got transfered to the New GM company, so that they can make it and sell it.. if it had remained in the Old GM then the tech could be sold to the highest bidder.
I think the cost of the Nissan Leaf and the plug-in Prius will strongly affect the final price of the Volt.. GM cant afford to see Volts languishing in the dealerships while $20k Leafs fly off the lots.
Has the Carbon Credits/Tax thing been implemented yet?.. I thought it was recently killed.
Feb 16th, 2010 (1:15 pm)Oh I agree. Even the theory is a lot more complicated than that.
I was trying to explain why they continued to product cars at a loss. Or why they would theoretically speaking. And what I should have said is that there is a huge difference been the cost of producing one more car, and the actual average cost of that car. Which is why OEMS sometimes continue to produce cars they’re losing money overall on.
Feb 16th, 2010 (1:16 pm)I’ll bet he looked over the job description, what happensed to the others before him and some recent history; and he never uttered the words, this is my kingdom and I’ll do what I please!
+2
Feb 16th, 2010 (1:22 pm)Of course not. But I doubt GM will continue to produce them if they’re losing money on a marginal basis. (After taking all forms of compensation into account. Financing profits. Direct margin. Cafe. Etc. )
+3
Feb 16th, 2010 (1:26 pm)Cafe. If they want to produce a certain number of Corvettes (which are very profitable), they have to produce a certain number of more fuel efficient models. Since the Cruze will also almost certainly help them with cafe, they might charge less for it than they otherwise would.
+1
Feb 16th, 2010 (1:29 pm)Update; Just the + numbers are obscurred, someone has been cooperative and added some minuses and they are not obscurred by the thumbs up/down symbols. (Vista OS and IE 8, Firefox 3.5)
+1
Feb 16th, 2010 (1:38 pm)Bell sounds, prize winning answer for LauraM!!!!
Can they do that though after telling the world the Volt is the look, feel, heart, soul and aspiration of GM for the Cars2.0 millenium? Gen II had better be hot on it’s unsucessful heels if that’s the (business) case.
+2
Feb 16th, 2010 (1:44 pm)#36
“From your lips to God’s ear” +1
+1
Feb 16th, 2010 (1:46 pm)#42
True that. +1
+2
Feb 16th, 2010 (1:49 pm)Sunk costs are sunk costs. Bankruptcy or no bankruptcy, how much GM has spent on developing the Volt should not affect the price. However, that doesn’t mean that they shouldn’t try to make as much of a profit as they possibly can. GM should try to get the maximum compensation from their Volt sales. They have to if they want to stay in business. However, compensation takes many forms. Reputation. Good will. Perception for future EREVs. Financing. Cafe. As well as money from the consumer. And they need to balance all of those out.
Hopefully, that compensation will exceed their total costs of development. After all, if we want them to continue to invest in the Volt and EREV, future expected profits have to exceed the cost of development. Also, if we want other automakers to enter the space–the development costs probably won’t be lower for them than it was for GM.
+1
Feb 16th, 2010 (1:50 pm)Could they still be working on upping the aero numbers since the work for the hood to meet Euro pedestrian safety regs. initiated such a late redesign?
+1
Feb 16th, 2010 (1:51 pm)#43
Spoken like a true blue Management Consultant, LOL. +1
Methinks you may have been reading too much “Dilbert”.
+1
Feb 16th, 2010 (1:51 pm)With an existing item, that is the kicker..once you set it, you cannot bounce it all over, generally its a very scientific guess. we run many scenarios if this costs, x and that cost y, + / – 5% and the price of srteel is w, and cooper at t..then we sell at “zulu”, but if its this, and based on that, here is our alternative. errors are usually adjusted at annual or semi annual price adjustments. ie last year we had slow sales, but raw material cost increases. slow sales meant lower volumes and higher costs, plus increased materials, so we had a price increase.
More than likely they will likely have fixed costs determined. it tracking and determining variables.
Don’t hold your breath to hear price. Nissan made a huge error IMHO announcing theirs
with a new product, its similar, but as something no one else has you lack history, bad pricing no matter how good can kill you, and backtracking shows you were full of opportunistic $hit.
Feb 16th, 2010 (1:52 pm)Aw man, are we going to need an air bag for Euro pedestrians too?
+1
Feb 16th, 2010 (1:53 pm)OH, OK, thanks Miss LauraM.
+1
Feb 16th, 2010 (1:56 pm)Well, you know what they say.
“No news is no news.”
… or do I mean
“No news is new ‘no’s” -?
+1
Feb 16th, 2010 (1:57 pm)Right on that. Long term average costs don’t relate to any particular cost in the short run. The airlines know about that, eh?
+1
Feb 16th, 2010 (2:03 pm)The built up demand will, hopefully, prevent that from happening for the first few years. But even if it doesn’t, there are a lot of forms of “other” compensation with the Volt. I think they’ll continue to product 10,000 a year at whatever price they need to sell them. They’ll consider a marketing expense if they have to. Or a product development expense. Or even a lobbying expense.
But, obviously, the sooner they bring out Gen II, the better.
+1
Feb 16th, 2010 (2:04 pm)Hooray! Edit timer is back!
Thanks for your commentary, LauraM; that helped me, too.
I switched to Firefox because IE8 was slow or locking up too much. There’s no problem with keeping both on your system, BTW; the only place a Microsoft browser is faster is logging onto Hotmail, lol.
Feb 16th, 2010 (2:12 pm)That is true for market leaders with long term outlooks. And GM has temporary respite from day to day market fluctuations and quarterly shareholder outbursts. But even with restructuring, in a business that is so capital intensive will a publicly GM traded have the power to maintain this position in the marketplace over time.
Even leaving effects of competition and the price of gas aside, GM will have huge capital requirements in the near future. And investors will want to know about ROI. As an outside observer at GM-Volt.com I see sunk costs as an investment that must be made to sell Volts in the future.
As an investor I would see sunk costs as my money and GM d_ _ _ well better be making the highest and best use of it to gain the best possible return on that investment. Barring that the cost of dollars would be prohibitivley expensive for the New GM.
Feb 16th, 2010 (2:12 pm)#106
I dunno, but I hope they keep working on it forever. “If some’s good, more’s better”, my Dad used to say.
BTW, I have just been reading an article in the 12/09 Hemmings “Sport & Exotic Car” about the 1921 Rumpler, which had a Cd of 0.28. Nothing new under the sun.
Feb 16th, 2010 (2:20 pm)Some analyst have gone so far as to suggest that in the aggregate airlines overall have not returned one net dime to invstors. But folks keep signing up for the next round!!!
+2
Feb 16th, 2010 (2:22 pm)Thanks, but my team and I will have to study an appropriate compensation package. (g).
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (2:25 pm)Rumpler, sounds like they had great technology.
+1
Feb 16th, 2010 (2:28 pm)#108
Oh well, look what happened with the iPhone. Apple introduced it, people stood in line all night to get one, and what, 6 weeks later they dropped the price 30+%? They got blasted 17 ways from Sunday in the media for about 2 news cycles, and the everybody went back to sleep. They’re selling plenty of them now, right?
I agree with you that GM should hold their cards up to their vest as long as possible. I’m just saying that, if the product is good enough, they can probably weather one or two pricing kerfuffles OK IMHO.
Feb 16th, 2010 (2:34 pm)#113
It’s been fantastically successful on that front already, IMHO. It has probably justified its entire existence already, just by providing “green” cover for the Feds to rescue GM.
Feb 16th, 2010 (2:37 pm)#118
LOL +1
Feb 16th, 2010 (2:41 pm)Yeah. That interview went pretty much how I would expect it to go every time when you’re talking to a key price negotiator. He’s not releasing any information he doesn’t have to release, and pushing his strengths. Probably a reflex action by this time for him.
Feb 16th, 2010 (3:00 pm)Good point. I’ve wondered about that too. My guess has been that several people here have professional business acumen, but only one or two are actually in the car business itself – managerial rather than mechanical – and a few gearheads. It also seems like we have quite a few engineers and software people. The vast majority demonstrate above average intellectual horsepower, but a few of us are average or even “modestly intellected”. JMO.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (3:10 pm)Thanks DonC. In all, ahem, humility, I thought it was funny too (g). But it’s still just at +3, so maybe people thought that I was being serious! (lol).
Thanks again,
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
+1
Feb 16th, 2010 (3:10 pm)Say GM had spend 1 billion dollars on Voltec. And someone with a working crystal ball told them that they would never get that money back in profit. Since Honda was coming out with something that would render it obsolete in five years. However, to continue the program would only cost them an additional $100,000 a year in additional product development costs. And they could make $200,000 profit on a marginal cost basis, so they would net out an additional $100,000 a year for the next five years if they continued the program. Then, obviously, they continue the program. Regardless of whether or not the bankruptcy wiped out that billion dollar investment.
Now, as an investor who’s looking at investing in the Voltech program (also with that handy crystal ball), the only reason I would care about that billion if there were no bankruptcy is because I’m worried about a) who’s managing my money and b) because they have to pay back that money with interest, which could lower my overall return on investment. But if I could just put my money towards the $100,000 and get 100% on my money each year, I would gladly do it. And, if I were invested in GM overall, I would want them to continue the program to get as much money out of it as they possibly could. Regardless of what they already spent.
On the other hand, obviously, I wouldn’t want them to invest yet another billion unless they thought they would recoup it in its entirety.
Feb 16th, 2010 (3:29 pm)Thanks, but actually I was just thinking “Report of Psychoeducational Assessment Results”. If we wrote them so that “just anyone” could understand them, they wouldn’t NEED us! When I’d give parents a copy of my report, I always told them, “Don’t worry about this being confusing – I *wrote* it and don’t understand it…” Good ice-breaker for tough conferences.
I’ve never read Dilbert.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (3:29 pm)There was no way the feds were going to let GM fail. Volt or no Volt. Especially given the surrounding financial crisis. If you want proof, look at Chrysler. Which is a lot smaller, and, therefore, a lot less critical to the US economy than GM. Its chances of success are a lot lower. And they’ve handed off most of the potential upside to an Italian company.
Feb 16th, 2010 (3:37 pm)Are you saying that you think that they will only produce 10K Gen I Volts per year for several years?
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (3:38 pm)Yes, they announced it, but did they really announce it???? If ya know what I mean!!!
Feb 16th, 2010 (3:47 pm)Yep, the Apple IPhone really got blasted about that price drop. I think that they issued vouchers for $100 to the people who were the first adopters. That couldn’t have been cheap.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (3:47 pm)Good points, if it comes to that investors will have to determine if it’s a cash cow or if diminishing returns are rubbing the luster off their golden egg. New dollars invested in GM will be priced accordingly, and old bond prices will follow.
In the real world will Volt perceptions affect GM as an investment before Volt revenues make much differance to the bottom line? The top line is all but opaque due to bankruptcy. Jim Campbell is in for an interesting ride and Ed Whitacre doesn’t appear to be in a forgiving mood.
Feb 16th, 2010 (3:53 pm)Yes, and this is in an industry where every one knows the prices fluctuate. (We are used to drops but reports are coming out that processor production will be lower than demand coming out of the recession.) Car buyers are used to incentives changing but not prices. If GM adds incentives to a hot new model will early adopters be miffed and the media smell impending failure?
+2
Feb 16th, 2010 (4:12 pm)OT…
Real life results of an EV.
“Mini E Driver Learns Lots as HeTallies 21,000 Miles in 8 Months”
http://blogs.edmunds.com/greencaradvisor/2010/02/mini-e-driver-learns-lots-as-hetallies-21000-miles-in-8-months.html
More important is his License plate.
-2
Feb 16th, 2010 (4:16 pm)Let’s be honest and realistic. “Image” is a big issue at GM. I don’t want to get into the details.
Of the former arms of GM, Saturn had the best image. They produced practical vehicles and offered a no haggle price. Saturn was also community friendly with Union members donating to local charities and other areas of need. One of my best friends bought Saturn’s because of these reasons. He has two. A sedan with 200,000 miles on it. And a newer SUV.
I suggest GM form a Volt Task Force. This should be made up of 8 to 10 men and woman. And it should include a high power oil executive. Two or three GM line workers. An environmentalist such as Chris Paine. A GMAC Financing employee. An EV hater. A Chevy dealer. And a few potential buyers (like you and me). These people will list the many issues that are now muddy, incomplete, or misleading. Talk things over. Don’t get into the decimal point details of price. And the growing competition. But simply focus on image, buyer satisfaction, incentives, means to showcase the Volt, and which other Voltec vehicles buyers wish to see. And don’t forget buyer satisfaction. Did I mention buyer satisfaction?
By taking this clean and simple approach. We will all be surprised at the results. GM really needs a goal for the Volt. The answers from Mr. Campbell display that goals for the Volt have not yet been solidified. GM does not need to add to the image of slipperiness and the inability to produce and deliver.
Please take this comment as constructive criticism. The Volt is too important a vehicle to be viewed as green bait. Or a means of meeting gasoline efficiency standards. Or as a tool in Mr. Goodwrench box.
=D-Volt
Feb 16th, 2010 (4:25 pm)C’mon Tag, don’t be silly. They know that too within 1mpg or closer but they don’t know what the cost of gas will be. They also don’t know what will happen to the cost of other commodities and what the general economy will be doing. There is no reason for them to quote a price now and they have been saying as much for some time. It is a shame this guy can’t manage even a teeny weeny tidbit of info like maybe when the Cruze will be slotted for production or anything meaningful. He sure moved his lips a lot to say nothing.
Yes, this is far different from Bob Lutz as others have noted. Too bad every time Lutz moves his lips, they say something different on the same topics. I’m trying to decide if it’s better to move lips and say nothing or move them and contradict yourself.
Feb 16th, 2010 (4:30 pm)I’d like one micro-nuclear reactor, please (just the right size for the Volt after I rip the ICE out).
+1
Feb 16th, 2010 (4:31 pm)Only if they can’t get more than their marginal cost per Volt. And I tend to doubt that.
Unlike Statik, I don’t have any detailed knowledge about auto industry, so I don’t know what their costs are. (And I doubt even GM has the final breakdown yet.) But, based their interviews, at least the ones I’ve read here, it sounds they expect to have some margin built in at MSRP. And, on the demand side, I just don’t see them having a problem selling them at the prices they’ve been discussing. At least not in terms of the numbers GM is talking about building.
Of course, there’s never any guarantee of anything. It’s always possible that people aren’t interested at whatever they price it at. In which case, they’ll have to lower MSRP. If their purchase price from the dealer (plus whatever they factor in from cafe) goes below marginal cost, then, yes, I think they will limit production to minimum necessary to have it as a halo car.
Feb 16th, 2010 (4:34 pm)Was there any useful information in that at all?
+2
Feb 16th, 2010 (4:38 pm)“Better to remain silent and be thought the fool, than to speak and remove all doubt”
- Ben Franklin (I think)
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (4:39 pm)Might give me a little glimpse into the process, but regarding results and decisions – no.
+1
Feb 16th, 2010 (4:41 pm)Don’t start today.
http://www.dilbert.com/
+1
Feb 16th, 2010 (4:57 pm)Investors looking at GM should look at their overall return on capital. Not just the Volt. The Volt is still very much a work in progress. And will be for the next three years minimum. And it’s a small part of revenues.
Or at least, that’s how they should look at it. If they were investing rationally. Which they generally don’t.
+1
Feb 16th, 2010 (5:18 pm)Exactly so, and Cadillac Escalades and other big, highly profitable SUVs.
Feb 16th, 2010 (5:26 pm)I’m thinkin’ Lincoln:
http://www.quotationspage.com/quote/29375.html
Feb 16th, 2010 (5:28 pm)#128
All true, but it provided a lot of useful cover and halo for a lot of people just the same, IMHO. Anyway, I was just AGREEING with you, LOL.
Feb 16th, 2010 (5:31 pm)Until GM can display a new image. Trading GM stock will be viewed as being speculative. Unlike Ford which has kept it’s balance sheet clean. And has produced several desirable 2010 vehicles. The Ford Fusion Hybrid sedan won Car of the Year and the Ford Transit Connect van won Truck of the Year. With the Ford Focus EV in the pipeline.
Look ahead a few years. Tesla, Fisker, BYD, Nissan, Ford and others have delivered electric vehicles. The Volt, the newest thing in 2010, is now one of the runners in the pack. The Voltec Orlando and Converj are “soon to be available”. And the price will depend on “the cost per gallon of gasoline”.
Which way is GM stock heading?
=D-Volt
+1
Feb 16th, 2010 (5:36 pm)#142
Oh I dunno, it looks like a pretty typical offering to me, LOL. +1 I always say that it’s my favorite management textbook.
Feb 16th, 2010 (5:36 pm)LOL
Feb 16th, 2010 (5:40 pm)Good point there bro!
Feb 16th, 2010 (5:41 pm)#147
Another top contender for understatement of the year, LOL. When are they saying the famous IPO is scheduled now? Or is it scheduled at all? I’m very interested in buying a Volt. Gm stock, not so much.
Feb 16th, 2010 (5:53 pm)My guess is $34,500.
Feb 16th, 2010 (5:56 pm)I can hear it now… “This Sucka’s electrical, but I need a nuclear reactor to give me the 1.21 gigi-miles of extended range.”
I wonder if Nasaman could make it non-stop between fuel stops in this rig?
Feb 16th, 2010 (5:59 pm)Ford is a speculative investment. At least in my book. They still have all that debt to worry about. GM will be too for the foreseeable future for difference reasons. Most stocks are speculative to one degree or another. Unfortunately for investors, the days of “safe” blue chip investing are over. But Ford is more speculative than, say, Walmart or Pepsi.
Investing is about return on capital. Not the OEM’s new high tech new green vehicle. There is a difference. The Ford F150 means a lot more to Ford’s bottom line at this point than the Ford Focus EV or the ford fusion hybrid. Hybrids were 2.8 percent of the market in 2009. That’s not going to make or break any auto company.
Things might be very different ten years from now. They usually are. (Mainly because I expect gas to be much much higher then.) But I doubt the Volt’s initial pricing will have anything to do with it.
Feb 16th, 2010 (6:16 pm)I agree. The smoking gasoline sucking behemoth will die out. The question is not “what”? The question is “which”? I would like to see the “which” be American made.
=D-Volt
Feb 16th, 2010 (6:18 pm)Why is there a continual discussion about battery leasing for the Volt? The answer has been very clear from GM. No battery leasing for the Volt.
Why no battery leasing? If there is some issue with “owning” the battery, don’t; JUST LEASE THE CAR. Why break up a car into components and just lease part of a car? That makes no sense.
Why would GM ever go to the trouble and expense of taking in a car, swaping out a component and returning it to the leasee? Better to just lease the car and when the lease is up just take in the whole car. With only using 50% of the battery capacity I bet (as well as GM is betting) the battery is good for 20 years though at a reduced capacity over time. The car will be scrap years before the 20 year life of the battery is used up. After that the car is dismantled just like a regular car, crushed, melted down and becomes a Toyota.
Feb 16th, 2010 (6:23 pm)I agreed with you until the last line.
+3
Feb 16th, 2010 (6:24 pm)After that the car is dismantled just like a regular car, crushed, melted down and becomes a Toyota.
…melted down and becomes a Toyota throttle spacer.
=D-Volt
+1
Feb 16th, 2010 (7:03 pm)No one company or country is going to have a monopoly on anything. There will be more than one electric car. I’m just glad an American company has what I think is a fighting chance to take a large share of the next big market. And, better yet, those cars, unlike say, the iphone or the xbox or even my kindle, will almost certainly be built in North America. Well, some of them will anyway.
But spotting a trend early does not necessarily make you a lot of money. Every time there is a huge shift, there are a lot of start-ups that don’t work out. If you look at the railroads, or computers, or the internet, and if you invested in a broad range of them at the start, you generally don’t get a particularly good return on capital overall. How many dot.coms went bust? For every microsoft or google, there’s a Netscape. And there are usually enough failures to more than make up for the success of the few.
Feb 16th, 2010 (7:14 pm)You’re right. Maybe Abe was just polishing up a Bible quote – Proverbs 17:28
Even a fool, when he holdeth his peace, is counted wise:
and he that shutteth his lips is esteemed a man of understanding.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (7:21 pm)Southern California Update:
I just spoke briefly with the dealership owner here. It was his opinion that we will not get many VOLTs allocated to us. He also instructed me NOT to take any deposits until this summer when we are supposed to get a stronger update on this.
He didn’t say it, but I got the feeling that the dealers closer to “Holly-wierd” will get the bulk of SoCal VOLTs. The rest probably up to Sacramento and the Bay area.
I’m still hopefull for 1 of the Pre-Production cars getting here for ‘demo and ordering’ purposes. I think we are far enough away from Schwarzenegger’s friends that the best we can plan on is just taking orders like we did for Camaros, and have to wait the 90 to 200 days to get the dang thing in.
Don’t read this is fact… It is just my opinion based on what I know so far.
Feb 16th, 2010 (7:28 pm)I’d never bet against nasaman’s bladder. (that didn’t sound quite right)
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
-2
Feb 16th, 2010 (7:34 pm)hi KenT #156 …
You’re probably right. Mr. Campbell may be misleading Nissan as to the final launch details on their principal competition. The Chevy Volt.
A million people will read these posts prior to November of 2010. The interview Q&A text isn’t very flattering to GM planning.
Q>Can you say if battery leasing is being considered?
A>No. (I can’t say?) or (it won’t be?)
We may be putting deposits down on the Volt by July. Think it’s time for GM to fill us in on what we’re buying?
=D-Volt
BTW: Just back from the gym. One of the guys there has a new Nissan Maxima. It is a beautiful black. Has custom bling wheels which look about 2″ oversize. The entire car is lifted about 2 or 3 inches. A great look! Very functional for the drainage dip rich intersections of Southern California. If the folks at GM think I’m kidding on the drainage dips. These will do more damage to the Volt than 200 miles of Death Valley cruising. I assure you.
Feb 16th, 2010 (7:41 pm)#158
LOL +1 Chinese rebar or structural beams, more likely.
Feb 16th, 2010 (8:00 pm)Well, *at least* he did not say it: Stay tuned.
Give a poor working stiff-white-collar credit!
Feb 16th, 2010 (8:16 pm)That’s the way to find the silver lining!
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (8:19 pm)hi CC #161 …
The County of Los Angeles is the largest county in the United States based on population. According to the California Department of Finance, the LA County population as of January 1, 2009 was 10,393,185. The January 1, 2008 population was estimated at 10,301,658 for a growth of 0.9% in one year.
The City and County of San Francisco is the fourth most populous city in California and the 14th most populous city in the United States, with a 2007 estimated population of 764,976. Among the most densely populated cities in the country, San Francisco is part of the San Francisco Bay Area metropolitan area, which is home to more than 7.2 million people.
=D-Volt
Feb 16th, 2010 (8:43 pm)How GM prices and allocated the Volt will tell us more about the “new” GM.” If it’s priced at “all the market will bear,” and dealers gouge, it will be a clear signal that nothing has changed, and the next time I won’t care if they do belly up…and I own three Chevys. Chevy better learn how to control greedy dealers or the long term damage will be severe.
+1
Feb 16th, 2010 (8:50 pm)Think the Volt will sell 750 units per month?
Is that lower front lip carbon fiber?
=D-Volt
+1
Feb 16th, 2010 (9:27 pm)Yeah, well where *I* live in Clinton County there is the largest school district in Pennsylvania, with an area *just* smaller than the State of Rhode Island – which covers just over 1000 sq mi (and if you count the water area, we’re 10 sq. mi. larger than RI). Our school district is so large that 3 of the high schools play against each other in most sports! The county population as of 2000 (the last time we had the Wallikinsky brothers count people) was 37,914, but I know of at least a dozen more kids been born’d since then. We have about 326,000 acres of State Forest Land in our county, and the deer harvest (most folks just say “killed”) last year was almost 200,000 (there were actually a lot more deer killed, but a lot of people don’t count them if they can shoot them from the house). Lot’s of bear killed too. There’s no countin the fish, but you can usually walk across streams on their backs, without getting your shoes too wet (if you put them on, like for church or somethin).
Seems clear to me that if GM wants to have folks *really* try out their Volts, they ought to send them here!
You be well now,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (9:35 pm)Sounds good to me Tag. Just another example of the many high demand areas. The Volt looks pretty good in the Transformer Blue. Appears to show the older slide charge port. And pre-air dam front with pre-Euro hood. Real nice look.
=D-Volt
Feb 16th, 2010 (9:51 pm)I was just joshing about our county. The stats are all correct, but we *do* have less than 40K population spread over a thousand sq mi.
Did the site go down? I had to come back in IE when FF crashed.
Huh.
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (10:00 pm)Crashed me AGAIN! Argh!
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (10:01 pm)Crashed me AGAIN! Argh!
Going to call it a night,
Be well,
Tagamet
Let’s Just Get The VOLTS ‘ Wheels On The Road!!****No More “Stay Tuned”!
Feb 16th, 2010 (10:09 pm)Man, that’s heavy.
Feb 16th, 2010 (10:20 pm)I think it’s the site, not FF.
Feb 16th, 2010 (11:09 pm)Hey Tag—You keep saying they should publish the MPG figures. Has the Gubbermnt updated the draft 2007 protocal? If they havn’t and GM says it will get X and the Gubbermnt changes the protocal, where does that leave GM.
Would appreciate if you know the protocal to share.
Feb 16th, 2010 (11:10 pm)Hey Tag—You keep saying they should publish the MPG figures. Has the Gubbermnt updated the draft 2007 protocal? If they haven’t and GM says it will get X and the Gubbermnt changes the protocal, where does that leave GM.
Would appreciate if you know the protocal to share.
Feb 17th, 2010 (12:50 am)Wow….. if you read down this far you must really be bored…… I still like the Volt though!
-1
Feb 17th, 2010 (5:59 am)hi Tex #178 …
The Wagoner GM viewed the automotive market as existing in a vacuum. Meaning, we’ll continue to produce the low mpg truck and SUV line. Just as we have for years. We’ll offer a Cobalt and Aveo for the people who wish to buy “green”.
This attitude is fine if we all lived in a vacuum. The Cobalt and Aveo were not going to out sell the Civics and Corollas of the world. Nor the Maximas or the newcomers from Korea. I believe the old GM thought these cars would.
Battery technology has finally advanced to a point where several car makers are offering EV’s. If the only two players in the world were GM and the Government. Then, by all means, play the game your way. You’re the only provider in town.
People like to know what they are paying for. Mr. Campbell could have said that the Volt will be available to buy and own (not lease). And that the highway mpg CS, at the current stage of development, is around 45 mpg. The Chief would have these figures.
By playing a tight game. The door is beginning to open for other players as the months roll forward. Ever play poker? If you hold a strong hand. It’s better to increase your bet early in the hand. Rather than let a weaker player survive by making minimal bets. The weaker player is allowed to draw strong cards and often gets “lucky”. Stealing the hand away from what should have been your winner.
Personally, I like what GM has done with about 90% of the Volt. The remaining 10% concerns me. I may not be alone in this thinking.
=D-Volt
Feb 17th, 2010 (7:10 am)Tag, what version of FireFox are you using? I’m not having any problems with it. I’m running
version 3.5.7
Feb 17th, 2010 (7:43 am)I really agree strongly with your views, Laura.
The advantages GM has in the costs of Voltec development have a very good basis from the EV1 days. Although I think that cost funding at other OEM’s for, say, EREV, will be far, far higher and more difficult to accomodate, since their later starts (if they really are going to start an EREV program), present bigger obstacles.
Ford had the E-Ranger. It was a really impressive little program, however, they used something like 39 8 volt sealed lead acid batteries. This was not a feasible technological start, since the replacement/serviceability of 39 sla’s all over the shop floor spread over the area of four or five bays, then balancing and service-coordinating, left the owners with servicing nightmares. Ford, while doing an admirable job for the very fine other technologies placed into E-Ranger, had either underestimated this serviceablility nightmare, or, if aware of it, realized that this would have to be a lesson to be learned by the California mandate (promoters/backers) back in the 1990′s (for as limited battery advancement was back then): a lesson to be learned the hard way in either or both cases.
Laura, I also like your clear commentary on the attributes of cost, development, and retail benifit pricing both from the potential customer perspective, as well as the cost benefit of the very retail MSRP price itself (from the OEM’s perspective) in sending many very powerful messages out to not only the potential consumer, but, also a “shot accros the bow” of the ships of the competition (if said competition ever even materializes).
A price (quote) is many many things. Commodity (potential) patrons that only consider the bottom line, do not care as much about looking deeply into what they are getting (or appreciating for their money) for the least that they are attempting to spend, because, they overly weigh a visual price while overly considering that all other things equal (NOT). (A really bad mistake, which gets them all precisely what they deserve).
Want to save two cents a gallon on non-”top-tier” gasoline, whilst also at the same time “go” for that really really cheap/nasty reprocessed motor oil in your engine all the time? Well, what comes back to that unwise “commodity” buyer are serious sludge cleanings, fuel system cleanings, EGR cleanings, and on and on. (Just wait til they put all that junk in their Voltec vehicle, which junk just might sit there for many weeks unused and “settling out”!) Can you pursuade them to change their “penny-wise…” ways? Yes, the open minded ones. The closed minded ones just ought to be left alone to learn (or not learn) the hard way.
I’ve decided to drop half of my 172 shops that clearly are not updating as regularly (every two years minimum) their technical awareness of ever-advancing systems. That’s about 90 shops in all. It is a reflection on which ones are “discovery channel” thinkers who soak up the needed new datum efficiently like a sponge, and, versus the “history channel” process prone whose overly established reliance on (or excessive customer demand for) “nuts and bolts” income/services (respectively). The latter situation makes for no further learning energies left over at the end of the week (for Saturday seminars) which energy is needed to incorporate the new adaptable ways to serve the customer’s advanced systems/processor needs. (Because they are chronically too exhausted to learn at the end of the week). (All these things tending to work against them, and, are not entirely their own faults).
Not to say that they can’t adapt just as quickly, but, where that first ten minutes “looses them” and they immediately decide to shut-down any desire to adapt, then, they are precisely the shop that will also close up when Voltec and other electrification becomes more widespread, especially in 4 more years. (Causing all manner of losses to those poor patrons who continue to go there during these next four years or so).
Why? Because manufacturers are quite aware of this chronic lack of training commitments out here in the independent servicing field both due to lack of commitment on the parts of the about 40% of independent management, and, as well, the uncontrollable wide array of differing technologies has by now, clearly surpassed the insufficient skill levels of those who do not adapt quite quickly now. Therefore, Fault Codes are not manually-clearable in 2010. This alone will kick out about 50% of “installers” gradually, starting in about a year. This is because OEM’s realize that all “installers”/”parts hangers” are doing is ripping off you owners by turning off the Malfunction Indicator Light at least just long enough for you to drive out their parking lot, and they have already taken your money.
Auto parts stores are not helping matters either. I often review their “materials” that my techs show me. It is all downloaded and prettily-repackaged engineering information only. By now, unfortunately, none of it helps technicians. None of it. The reason for this is that Auto parts stores are run by clerical administrators who are marketers. For those who are skillful in downloading and repackaging normal function engineering information without ongoing “beginning to complete diagnostic conclusive end” scanning work every day in service bays on the hardest of the hardest problems, all they are doing is extending the work week for these overworked techs, and, it is just plain wrong.
Then there are equipment merchandisers who now are prone to sell **VERY** EXPENSIVE equipment that DOES NOT BY ITSELF GET TO THE ROOT OF PROBLEMS for the likelihood of the problems right now in the service bays, due at least to the very wide array of total kinds of problems presentable. SOME of this very expensive reprogramming equipment actually makes/leaves the vehicle
****************************************************
MORE DANGEROUS WHEN IT LEAVES THE SHOP,*
****************************************************
as you tragically will see in the coming years. This is another main reason why I have NO CHOICE but to drop about 90 of the 172 shops I’ve taught advanced systems in these last 5 years.
So, the lesson, (finally) for the Volt community?
Buy the longest extended warranty for your Voltec vehicle.
Thanks again, Laura, for your very clear and thoughtful posts.
Feb 17th, 2010 (11:40 am)Dan, do I understand that you are cutting your servicing company in half? Or are you a training / certification service?
Given the issue with the Volt’s range-extender sitting for long periods, GM should break the units in on a dyno (or use the generator as the dynamometer) before vehicle sale, to the extent that it can be sent to the showroom floor loaded with (and spec’d for) synthetic oil. This would mitigate much of the potential ‘infrequent use’ problems, and save on future servicing efforts.
The point on manually balancing a bunch of lead-acid batteries is a good one (and one I hadn’t thought of — @#$%; that sounds like a nightmare). I think that it wasn’t only the California people who learned that lesson, given the high degree of automation in the Volt’s on-board battery management system which balances cells on-the-fly.
It sounds like you’re major-league disgusted trying to keep shops full of techs up-to-date, but it has also sounded like GM has anticipated a lot of the problems of servicing where the Volt is concerned. Remember, they know more about the typical dealership service department problems than they’d like to admit.
Feb 17th, 2010 (1:13 pm)Have you ever considered the situation in Europe, gasoline price 6-7 USD per gallon, and price of cars due to tariffs, f.exl average size family car has a price taq of 40-50.000 USD, SUV you get from 60.000 USD and up. Small cars have tariffs up to 50%, Suv it is higher, it will be 0% tariff for electrical cars and PHEV. Remember car market in Europe is bigger than USA.
What will happen after 2015, predicted peak of oil ?
Just remember, not be so self centered, there are lots of cars outside USA, any numbers prediction based on USA is ridicilous.
regards
Feb 17th, 2010 (10:55 pm)Thank you. I’m glad you found my comments clear. It’s always difficult when writing those types of posts deciding which details to leave in, and which to leave out.
I’m sorry to hear that.
Feb 18th, 2010 (12:20 am)Plenty of us in the business here lurking. I was lucky enough to drive a Volt prototype recently. Awesome. The acceleration was amazing, I wasn’t prepared for that.
Feb 20th, 2010 (6:46 am)Feb 11, 2010
How and when you can get a Leaf:
…you’ll be behind 50,000 others who’ve already learned about the process and signed up.
Reserve your car, for a refundable $100 deposit, in April, about the time the prices are announced.
http://content.usatoday.com/communities/driveon/post/2010/02/how-to-buy-a-nissan-leaf-electric-car-/1
=D-Volt