Effective today, GM is allowing its Chevrolet dealers around the country to discretionarily sell their Volt demos, thus more than doubling the company’s inventory of Volts available for sale
In a phone interview today, GM Spokesman Rob Peterson said GM’s decision is in response to strong customer demand and it is an attempt to put more people in Volts sooner who are already waiting to get one.
“Our exit surveys at dealerships indicate that the number-one reason for serious intenders of the Chevrolet Volt to not purchase the vehicle is availability,” Peterson said. “As of Nov. 1 we had about 1,800 vehicles on the ground and 2,300 dealer demos.”
Here’s a 2012 for sale in Concord, N.C.
There are around 2,600 Chevrolet dealers participating in the Volt program. If there was any doubt as to the Volt’s supply to demand ratio, this is the latest word from the source: 1,800 Volts have been thinly spread among these dealers, and GM wants more availability now.
“What we’ve started to do is actually allow the dealers to put their dealer demos into inventory, so if they want to sell – they don’t have to sell – if they want to sell they can sell their dealer demo,” Peterson said. “By taking this maneuver and allowing them if they choose to sell them, this basically allows us to go from 1,800 units in 2,300 dealerships to 4,100 in inventory.”
He said the stop-gap measure will ameliorate a supply constraint now being felt by Volt buyers who may be second or third in line, or otherwise being told they will have to wait.
Despite naysayers, this latest move is an indicator that supply is limited in some regions – and we will add – it will also help GM meet its dash to the calendar year finish line. The company has said all year it intends to deliver 10,000 Volts in North America by year’s end.
As of the end of October, GM had delivered 5,003 Volts, and its allocation process has yet to be fine-tuned. If it is to hit the target, GM needs to sell another 4,997 in November and December alone. Peterson has effectively said GM is not sweating it, but it is certain that freeing up more Volts can only help it achieve the goal.
This said, the decision whether or not to sell a Volt demo will be up to individual franchises.
If a dealer chooses not to sell its demo because it feels it is a better business decision to keep it and be able to show it, that is out of GM’s control.
Peterson gave no indication whether GM is encouraging its dealers to sell, and said it was strictly voluntary.
So, would it be a good decision? For GM’s dealers to give up their demos would also mean some effect on their general marketing plan, which includes nationwide roll-out by year’s end.
Peterson said demos sold would be replaced, but was not definitive as to how long the time lag would be if a dealer figured that a proverbial bird in the hand was worth two in the bush.
“That’s yet to be determined,” Peterson said of the time between a dealer selling off its only Volt and getting a replacement, “but you’d imagine that as soon as we can get production up to fulfill the nationwide roll-out and get at least a unit to every single dealer that’s available for sale, then we’ll put the dealer demo back into place.”
Peterson made sure to clarify the dealer demo program is not being canceled, and GM still views it as a value for its dealerships’ efforts.
“We’re not moving away from the dealer demo program,” he said, “we still believe its extremely important for the educational process for the vehicle.”
2011 demos.
All Volt demos have Volt graphics, which Peterson said would ordinarily be removed – unless, perhaps, if someone wants to do some extra unpaid advertising, and leave the decals on.
As for demo pricing, as has been covered before, this decision is also left up to the dealer.
“We’re steadfast in communicating to our dealers that they should be selling the Volt at the manufacturer’s suggested retail price,” Peterson said. “You know, they’re independent franchises and that gives them the flexibility to do what they need to do.”
Observations
It has been an interesting ride all along, but the next couple of months will have a lot of eyes on Chevrolet to see how it finishes up the Volt’s first calendar year.
Critics will observe what they will, but in pulling out the stops and willingly sacrificing its demos, GM is indicating it really has had supply constraints, just as it has said all along.
This entry was posted on Monday, November 7th, 2011 at 2:15 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
+8
Nov 7th, 2011 (2:25 pm)Great move GM. Shows they can listen to the customer and respond!
This should help in reaching 10K. Just hope its not too late or too geographically restricted to sell them all.
With the 5K delivered, and 1800+2400 “on the lots” (as of Nov1 + demos), they only need another 800 or produced/delivered which should be doable. Now its just selling them!
Wish I could have gotten mine with the graphics. (Any dealers with reusable graphics want to send them to me I’ll be a free billboard for the Volt
)
Volt: Its more freedom than electric.
+2
Nov 7th, 2011 (2:39 pm)The Republican legislator who owns a Chevy dealership can now sell his demo Volt. He is mistaken if he thinks he will do better without it. I bet some cluless customer will visit his lot, ask for a Volt, and gets the saleperson pitch for a different vehicle, probably with a better margin for the legislator. The smart client who wants a Volt will visit a different dealer and buy it.
But I hope most of the other Chevy dealers keep their demo Volt until next year, which will help them sell more Chevy models, not just Volts.
Raymond
+5
Nov 7th, 2011 (2:39 pm)Do we know if they invoiced dealers full “invoice” price for the demos or will they have wiggle room?
My state incentive says car must be new and less than 500 miles. Some demos have more. Our PA incentive is a $3500 rebate check… Worth looking for low-mile Demos at a good price. Once a demo in our state hits 500 miles, it loses $3500 of value right away. So, keeping the demo may be better for some dealers.
+1
Nov 7th, 2011 (2:43 pm)This is the fastest way to increase Volt sales. I’d rather they would have stayed the course. On the other hand if they had sales targets this was going to be the only way they met them.
+6
Nov 7th, 2011 (2:46 pm)BoultVolt,
As of the end of October, calendar year to date, GM had already produced 10,896 Volts for North America.
So, that 10,000 has been reached. The actual goal in question is delivering 10,000 North American Volts. These demos must be delivered to paying customers, which is up to the dealers to decide if they are willing. The race is on …
+2
Nov 7th, 2011 (3:33 pm)This should make PA Rep. Mike Kelly happy. He can finally get rid of his demo Volt he fired his employee for buying. (He could prob sell it above cost for a nice profit).
http://www.thetruthaboutcars.com/2011/10/chevy-dealing-congressman-there-is-no-market-for-the-volt/
EDIT: Just saw your post at #2 Raymond
Nov 7th, 2011 (3:42 pm)Do the demos still qualify for the $7500 Federal credit?
Nov 7th, 2011 (3:48 pm)This issue was forced by a dealer who had “mistakenly” sold a demo unit already. While it is a great marketing strategy, GM couldn’t really enforce it, other than threatening future allocations, which doesn’t really help anyone.
Does anyone know how many Volts have been delivered to Canada thus far? Jeff, have you asked your contacts at GM this question?
+1
Nov 7th, 2011 (4:16 pm)Jason M. Hendler,
Last week (Nov. 2) GM of Canada’s rep told me they’d sold just over 200 Volts since launch, and hope to have nationwide roll-out “within a year.”
-J
+1
Nov 7th, 2011 (4:21 pm)larry4pyro,
Assuming they’ve not been registered, I don’t know why not. I tried to ask Rob also, but got voice mail.
Nov 7th, 2011 (4:47 pm)They had just under 200 at the end of September, so this info seems a little out-of-date.
-5
Nov 7th, 2011 (5:06 pm)On the conference call, GM said they had a 72 day supply of Volts at dealers and that is outside of the demo program. That’s 1108*(72/30)=2650, which is still somewhat lower than the number one gets if one walks back from production, allows for two weeks’ transit (the Sept sales call), 200 to Canada and 200 non-saleable testers. So, 2650 is a perfectly credible saleable inventory figure.
Releasing the demos is going to make a difference when GM already has a 72-day supply?
+1
Nov 7th, 2011 (5:33 pm)I’ll bet most dealers don’t sell their demos. I also bet that this was driven by a few dealers complaining to GM (especially Mike Kelly).
+1
Nov 7th, 2011 (6:41 pm)The PA dealers can trade high mileage demos for low mileage demos in other states.
72 “supply constrained” days.
+1
Nov 7th, 2011 (6:52 pm)This is an AWESOME idea! With new technology as the Volt, it is vital that all Volts be fully tested before being sold. Unfortunately, I have a very bad initial experience with my Volt (which I wrote about on this blog), but after GM fixed the problem my Volt has been 100% problem free.
IMHO, GM had this idea all along, so that they could get some ‘real world’ miles on these Volts before putting them up for sales. I bet we see at least 3,000 Volt sales in November.
Nov 7th, 2011 (7:36 pm)Found a great Web Video from AutoNews Now with Tom Worobec in my inbox. This is 5 days old but hits home Gm and Chevrolet’s intent to top into what they call a serge of interest in our Amazing Chevy Volt EREV!
“Gm Bets on a Volt Serge-2 Minute Drill”
http://www.autonews.com/article/20111102/VIDEO/311029733/1219
No Paywall!
Nov 7th, 2011 (7:40 pm)Maybe we’re getting close to the time when someone can “haggle” the price of a Volt. Also sounds like Gen II is getting close, despite what they’ve been saying.
+1
Nov 7th, 2011 (8:08 pm)Jeff,
I’m not sure if GM supplied the first two photos of the Volt w/ that Volt sticker on the side and the dirty truck w/ Volts on it, but I have to say it’s just not all that flattering.
All the Volts have to be red w/ polished wheels. …and the truck needs to be the same (or at least washed)
(Geez)
+2
Nov 7th, 2011 (8:17 pm)You seem to have forgotten this one…
+1
Nov 7th, 2011 (8:46 pm)Can’t speak to the unflattering images. I guess they are what they are. It would not be fair to make them all red with polished wheels however, because those are faster. GM wants people to be able to sample the slower ones too. If customers got one of the slower colors, they could become disappointed after having test driven a red one. …
+2
Nov 7th, 2011 (8:50 pm)Eco_Turbo,
Jeff Cobb,
I love you guys. Those are the greatest comebacks. I’m still laughing.
(But of course not laughing about the White Diamond Tricoat..it’s beautiful)
Thx,
GSB
Nov 7th, 2011 (9:24 pm)GM’s President had this to say …
http://www.plugincars.com/gm-president-demand-chevy-volt-still-unknown-108134.html
So, according to GM’s president 4,000 was available in October – but only 1,100 sold. But now the marketing guy says they are letting dealers sell demos so that more would be available for sale.
Not sure whom to beleive.
+1
Nov 7th, 2011 (9:36 pm)evnow,
I think that he meant the demos plus the regular inventory but will ask when GM knew they would make the demos for sale. If I can get info for you, will let you know.
+1
Nov 7th, 2011 (9:49 pm)Though I do sympathize with issues in China – not sure this is the place for it.
(if you want to talk China and human rights – I will have to describe Foxconn and Apple products)
Nov 7th, 2011 (9:59 pm)I believe you are misinterpreting the statement. 4000 available did necessary mean 4000 available to sale, but a mix of those for people to “see” and to buy. Only a few people will buy a car they have never seen/driven. 4000 – 2600 demos = 1400 available for sale, of which they sold 1100.
Maybe the “sell the demos” was already being discussed internally and he let it slip that the 72day supply (so could not really correct it).
Nov 7th, 2011 (10:10 pm)Rob Peterson said he’s not sure the context of 4,000 Volts mentioned by Reuss. The decision to make demos available was only recently determined based on feedback by dealers, he said.
The numbers are what we reported the other day, and (the same) numbers he told me today – approximately 1,800+2,300=4,100.
Nov 7th, 2011 (11:37 pm)Also
http://www.freep.com/article/20111107/BUSINESS0101/111107067/Chevy-frees-up-2-300-more-Volts-sale-supplies-trail-demand
If dealers sell their demos by Jan. 3, GM will reimburse them $1,500 each to make up for depreciation and for the cost of removing demo-related decals, Henderson said.
+1
Nov 8th, 2011 (12:17 am)Yes, per this article: http://www.foxnews.com/leisure/2011/11/07/chevy-tells-dealers-to-sell-their-volt-demos/?test=faces
“According to the Detroit Free Press, buyers should still qualify for the $7,500 federal tax credit “
+5
Nov 8th, 2011 (12:20 am)“All Volt demos have Volt graphics, which Peterson said would ordinarily be removed – unless, perhaps, if someone wants to do some extra unpaid advertising, and leave the decals on”
Why not offer it as paid advertising. Instead of paying the dealer to remove the decals, pay the customer $500 to leave it on. This publicity would be a heck of a lot more effective than when the decal was sitting on the dealer lot. I, and I believe other advocates, would gladly carry this banner for the discount. Of course, some may remove it shortly afterward but most wouldn’t and what is GM paying the dealer to remove it?
Nov 8th, 2011 (6:22 am)There may be pent-up demand for colors not in the Demo group. Like Cyber Gray or Blue. To get those or also specific interior color/option selection would take the ordering process.
+2
Nov 8th, 2011 (6:38 am)NEW YORK (AP) — Oil prices climbed to the highest point since late July on Monday as traders focused on declining U.S. petroleum supplies and also bet that Europe would solve its debt crisis.
Benchmark crude rose $1.26 to end the day at $95.52 per barrel in New York. The benchmark price hasn’t finished that high since July 29.
Brent crude, which is used to price many foreign oil varieties, increased $2.59 to finish at $114.56 in London.
Prices rose early in the day as political rivals in Greece worked out a power-sharing plan that will be crucial for securing a $179 billion bailout. The partnership between Socialist Prime Minister George Papandreou and conservative leader Antonis Samaras raised hopes that Greece will follow through with spending cuts and other unpopular austerity measures that are needed as part of the international aid package.
No Plug, No Sale!
Nov 8th, 2011 (7:01 am)Sean,
Actually I won’t watch the video, but before we got married, I chastised my wife for j-walking. She had never driven a car and had great faith in “the pedestrian has the right of way”. She would actually walk out into traffic forcing cars to stop to cross the road. I had to explain to her that drivers get distracted and having the right of way is no good if you are dead.
Well, I certainly couldn’t walk by someone injured in the road, but doctors are afraid to help because so many have been sued by helping victims without signed consent. Thank greedy people for suing good Samaritans to force a change in society.
Nov 8th, 2011 (7:28 am)Well, we have moved a long way from the days when we were looking at pictures of Malibus with big red stop buttons on the dash & voltec under the skin, to disucssing whether releasing a couple of thousand demo volts for sale to help the backlog is a good idea.
Looking forward to Corvette Guys take on this.
Personally, I think holding off on the demos until MY 2013 is released is a good idea. It will give the pent up demand time to catch up, and bring the latest model (MY2013) back as a demo.
Nov 8th, 2011 (7:46 am)Here’s to hoping that allocations can be negotiated better with dealers who have no allocations left but are in areas where orders from customers are turned away due to “I will have allocations next year…”
-2
Nov 8th, 2011 (9:01 am)This looks like a dealer incentive.
+1
Nov 8th, 2011 (10:03 am)I hope the local dealer doesn’t sell his before I even get a chance to go!
+2
Nov 8th, 2011 (11:10 am)Loved the comments about red. Named mine Red Volt. To get a Signature dark red Tesla Model S, deposit $40K! They are using the special red color to fill orders.
Best reason for a dealer to sell their Volt demo is to update the demo to 2012.
Nov 8th, 2011 (11:44 am)Is the planned November nation-wide roll out for the Volt still on track? How is current production ramping up for this, or is it? Anyone know?
… and what happened to CorvetteGuy?
+1
Nov 8th, 2011 (12:29 pm)I think they freed up the dealer demos so people could buy them for Christmas.
[ insert picture of Chevy Volt with giant bow }
Nov 8th, 2011 (1:03 pm)An autotraderdotcom search shows:
“found 1,996 listings with 3,105 total vehicles”
These cars are not spread evenly across dealerships (ie. one per dealer). Some of these listings are showing 3 to 5 cars at one dealership. Classic in Grapevine TX is listing nine (9)!
Also, the top listing is $64,605!! They really don’t want to sell this one very quickly. (It’s a demo as it’s pic has the Volt decal.) Many others in this search are way above MSRP.
There are some areas where there are zero cars available still. Plus, dealers are listing them at premium (plus!) prices. And I don’t get where this is a 72-day supply.
+1
Nov 8th, 2011 (1:49 pm)It probably wasn’t the wisest idea to introduce them and make them so hard to obtain! I frequent my local Chevy dealer all the time and haven’t even seen one.
Nov 8th, 2011 (2:14 pm)I added to the forum thread with this same topic – but cars.com shows a drop in inventory by 740 since about the time that we learned dealers could sell their demos. If it continues, then the decision was really good.
Nov 8th, 2011 (2:35 pm)Hmm. If some of these demos are sold much below original MSRP, this could be a good way for the more budget-challenged among us to snag one. Maybe a long shot, but I can dream, can’t I?
+1
Nov 8th, 2011 (3:43 pm)I believe that this is a problem that many manufacturers aspire to.
+1
Nov 8th, 2011 (3:49 pm)I’m pretty sure I touched on this at the beginning of the month when we were talking about sales vs available inventory going forward (and what the real number was), and therefore the end of the dealer lockdown, which had taken place.
This has nothing to do with limited inventory, or supply. It has nothing to do with GM’s Reuss not “wanting anyone to suffer” or “wanting everyone to be able to sell their cars”, or what the PR guy is saying (“What we’ve started to do is actually allow the dealers to put their dealer demos into inventory…”)
—
As I understand it, here is how it went. A few years ago, all the dealers really wanted a Volt. And GM really wanted all the dealers to have a demo on hand that they couldn’t sell so that they could take order…and/or sell a Cruze or Mailibu.
So in order to be a ‘official’ Volt dealer, GM held all the dealerships feet to the fire, and made all the dealerships sign-off on a waiver to not sell their cars for 6 months/end of 2011 model year in order for them to be eligible to get cars last March/April.
The lockdown has now expired and the dealers put the cars into inventory, and thus they are now dumping them as fast as they can…because why have a 2011 in MY 2012? Needless to say, with these demo cars hitting the market and production now exceeding demand for these early regions, there is going to be a lot of Volt sales for both November and December.
Nothing to do with GM doing anything here for the good of the dealers, other than holding all their dealerships to their contracts until they expired, and now doing a little spin. At best, they are releasing any dealers that are unfortunate enough to still be in lockdown to be released.
Nov 8th, 2011 (3:54 pm)Just guessing, but perhaps because it is supply constrained, that the formula used to get this result, could be interpreted as showing; it takes 72 days for all of the vehicles in the listings (the pipeline GM refers to) to be sold to buyers. That leaves out how many could have been sold if the supply was not constrained and where cars may have been mis-allocated ($64,000 priced Demo Volts?).
+3
Nov 8th, 2011 (4:15 pm)statik,
Maybe true in the early release states, but in the states just getting them this is a change. I got a call today from one of the dealers I visited in August, who already has their demo on order and already filled all their allocations (which were delivered last week I believe) and had deposits for 4 more. The dealer took my name incase someone backed out. (Since then I went elsewhere and bought one). The call today was to see if I was interested in the demo.. which he only got last month and would have to keep for 5 more before selling. So maybe in CA/NY/TX this is nothing special, but for places were the cars are in short supply its probably a real change.
+7
Nov 8th, 2011 (4:55 pm)Statik,
This is Rob Peterson from Chevrolet Volt Communications.
While you’re correct about the strategy behind the demo program – it is a true halo product which draws new customers to the dealerships – you are incorrect about this most recent move. Dealers in the initial seven launch markets received approximately 550 2011 Chevrolet Volt’s. Several of these units became available for sale in August – about 100 have been sold, with many dealers chosing to hang on to the unit for it’s original purpose. With yesterday’s move roughly 2,100 2012 Volt’s (1,800 built and delivered since August and another 300 either in-transit or in process of being built) became available for sale at the dealers discretion.
Additionally, I suspect the nearly 1,400 Chevy dealers who as of October 31 had either no vehicles or just a demo unit on their lot would disagree with your notion that no one was helped as they now have something to sell to customers.
Thanks
r
+1
Nov 8th, 2011 (5:27 pm)Thanks Rob,
I knew a portion of the inventory where in lockdown contracts, but I never had heard how many 2011 demos that was exactly. Good info.
Just curious, are you saying that until today, all of the 2012 inventoried demo cars had a similar contract that the dealer’s could not sell them for a fixed period of time as well? And that GM has released them of that obligation? I had not heard that, I thought 2012 demos came at the dealer’s descretion on whether or not to sell.
…if that is the case, that is indeed certainly a help.
Thanks for the info/clairification.
Nov 8th, 2011 (6:59 pm)Thank the changes made to public schools in the 70′s for creating the schools that produce these people.
Nov 8th, 2011 (7:22 pm)The demos in Florida are 2012 and according the the 3 dealers I have spoken with here said they could not be sold for 6 months. Don’t know if the dealers had been required to order a replacement demo to be held for 6 months once the previous one was sold.
Nov 8th, 2011 (7:46 pm)Sounds like semantics to me. They will all sell… at some price.
+4
Nov 8th, 2011 (7:52 pm)I reviewed the conversation between Statik and Rob Peterson and I think this is a positive move.
Nov 9th, 2011 (12:44 am)evnow,
Don’t believe that voice in your head because he seems to have reading comprehension and basic math skill problems. Tell him to read more slowly, get out his calculator and go over the figures again.
Nov 9th, 2011 (8:33 am)statik,
Statik,
The demo program rules were the same for all dealers – simply keep one on the lot for six months. Several demos units sent out in early Feb dutifully served their six month service and were sold. It’s the second group of demos – those that we just produced that will help the most.
r
Nov 9th, 2011 (11:19 am)Good info to know that the program is over…you should have some nice numbers for November.
/thanks again