This is a very big question.
It’s hard for me to believe I have followed the development of this car so closely for so long, and that we are now actually only days from the first retail sale. GM has poured tremendous resources into developing this car both from a financial as well as human resources perspective, not to mention to propagating an exhaustively voluminous stream of news, PR, and media along with it. All through oil spikes, the nation’s financial meltdown and even the company’s own bankruptcy and restructuring.
All the while the Volt has been held up as GM’s great hope. The hope that this car and how it reflects what this company is capable of will finally persuade a disinterested if not downright bitter public to switch to GM-made vehicles.
The Volt will arrive, but will arrive in very low volumes, and very few locations, and at a price point above what the average household can afford.
Many times over the years critics have called the Volt a halo car, meaning simply a trophy to symbolically cast the company in a better more environmentally sensitive light. It is well known that GM has spent over 1 billion dollars to develop the car, and that profit margin on each unit will be razor thin at best. At this point it still isn’t a great business case, or is it? You see GM executives are confident the Volt will lead people to buy GM cars even if they cannot buy the Volt.
“When consumers see that (car), they quickly go to the notion that you are smart enough to design and engineer and manufacture a vehicle that’s this capable and this innovative, [and] you just must make better vehicles overall,” said Volt marketing director Tony DiSalle.
DiSalle thinks the Volt will lure people into dealerships only to leave with lower-priced more-profitable high-volume conventional gas cars.
“People would come in to look at it, and not necessarily be in the target for a Volt — and become extremely interested in a Cruze,” he said.
Despite GM’s confidence Volt-lust will sell Cruzes, analysts are less certain.
“They’re learning about the market, they’re learning about the consumer, they’re learning about the technology,” says Brett Smith of the Center for Automotive Research. “Give it 10 years, look back and I think it will be interesting. But right now, it’s a great experiment.”
An expensive experiment at that.
This entry was posted on Friday, October 22nd, 2010 at 6:40 am and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.