Does anyone here know what GM’s aspirations are for the next-generation Volt?
Does GM have big plans, or is the plan to keep it relegated to a “niche” product sold in California, the Northeast, Pacific Northwest, and a few other markets?
These are some of the implicit questions arising from a Forbes interview with Green Car Reports editor John Voelcker who answered with straight facts based on known sales figures, how the Volt is being marketed, and what GM has said so far.
The Forbes piece titled “2016 Chevy Volt: The Mainstream Plug-In Hybrid Deferred” says it all with the title – GM has said nothing more than the Volt will be a sort of green poster child and continue to carry the flag where it has unless its marketing can do more.
Of course the actual organic market reception for the Volt – i.e., whether it looks like a good value and new people buy it like Mark Reuss has twice said will happen – remains also to be seen.
The Forbes article cites statements from April by Dora Norwicki and in August by Chevrolet Chief Marketing Officer Tim Mahoney that the Volt is a niche product.
Forbes might also have consulted a January interview with Volt media rep Michelle Malcho in Detroit predating both those GM disclosures when she called Volt a “niche style of product” not marketed outside California and tech fairs, but in any case the message is clear.
Past, present, future
When the Volt was developed, there was talk that Bob Lutz was provoked by the Tesla Roadster and Jon Lauckner convinced him to make it an EREV. There was talk that the car would leapfrog the Prius.
“Basically, it was born out of my frustration at the deification of Toyota, because of the Prius. All the senior executives of Toyota were about to be officially anointed as saints,” said Lutz to SFGate in November 2011, adding he was irked by praise Toyota received. “’They don’t have the same profit motive we do, and they really care about the environment, and this is the car of tomorrow, and dumb old Detroit obviously couldn’t have done this.’ I was gagging on this stuff, because it was all so patently untrue.”
More recently, we have the statements that gave rise to the Forbes piece this week which cited the man responsible now for marketing the 2016 Volt, Mahoney.
“It’s an impressive product in its design, performance and technology,” he said. “It’s a real halo for the brand. It’s done a tremendous amount to conquest new buyers, and they have [high] incomes like Corvette buyers. Customer satisfaction is through the roof.
“But the reality is that there’s a finite market for Volt, and it’s geographical. California is the epicenter; it’s not about selling Volt in Oklahoma. And we’ve gotten smarter about deploying resources for the vehicle.
“There’s a Northeast and West Coast market for Volt, and there’s nothing wrong with that,” Mahoney continued. “That’s the beauty of having a broad portfolio of products. But it’s not a mass-market” vehicle.”
GM is now teasing the Volt, promising it is better where Volt owners asked GM to make it better. We will get to see how well they did in a couple weeks.
Notable is to date there have been no Voltec spinoffs. We know they applied for a trademark for CrossVolt, did develop an MPV5 concept in 2010 and that is suggestive, but no announcements beyond this one car have been made.
GM was once castigated as the company that “killed the electric car.” The Volt helped redeem it from that perception.
It also now faces CAFE and CARB mandates and as we’ve seen with even the Germans developing electrified cars they probably don’t have excessive passion for, GM is at work on electrification.
Is GM doing it because it is passionate about the electrification of the automobile? Undoubtedly some are at the company, but what is the view at the helm?
Do you believe GM is doing all it can? Has its marketers managed this present generation product with superb grace and even gusto, or not so much?
Will they going forward with the 2016? Again, perhaps some of it may depend on how good gen 2 is, but we know gen 1 was better than some have represented it, and the marketing rug was pulled out from under it after GM took its politicized licks during 2011, 2012, and seemingly tucked its tail.
Forbes Voelcker interview
Forbes contributor Brooke Crothers asked GCR’s Voelcker his view on Volt pricing.
“Marketing is one of a handful of issues that will affect the success of the 2016 Volt,” said Voelcker. “Another is price: Can Chevy price a base-level Volt at $29,995, which gets it into the consideration set of far more people than its current $34,995?”
Forbes then asked Voelcker whether GM’s regional strategy is the best way to go.
Voelcker acknowledged Mahoney’s statements are correct. The Volt is selling only in limited markets.
“But as Mahoney notes, there are precious few Volts sold in North Dakota or Alaska or Oklahoma,” said Voelcker. “Chevy is just going where buyers are likely to be most receptive, to maximize the ROI on its marketing investment.”
“We’re really going to excite the whole current Volt owner group but also we’re going to get customers we never got
before here, with a car that’s really something special,” says Reuss.
Forbes then asked “what makes a vehicle mainstream?”
The answer depends on how one defines mass market, said Voelcker acknowledging GM sells far higher volumes of Silverado/Sierra pickup trucks, Cruzes, while the Spark sold only 34,000 and Suburban only 51,000.
These latter levels, said Voelcker, would be reasonable to expect from the Volt in 2016 or 2017. (Through November this year, Volt is at 17,315 sales and Leaf is at 27,098 – expect December sales likely in the teens for Volt and over 2,000 for Leaf.)
“I think the question will be whether Chevy wants to hang on to the best-selling-plug-in-car-in-the-U.S. title — which definitely carries bragging rights — that the Volt holds the lead in cumulative sales since December 2010.
“It’s likely to be eclipsed in total U.S. sales since then by the Nissan Leaf, which is nearing 3,000 units a month, but I’m expecting Chevy to make an aggressive effort to reclaim the title in the second half of next year when the new Volt comes out. Whether 2015 will see more Volts or Leafs sold remains very much in debate, and should be an interesting battle to watch.”
And lastly Voelcker was asked what’s the best way to sell the Volt?
Voelcker responded about the Volt’s high level of owner support and customer satisfaction.
“Once you drive one, you ‘get it’ and start to consider the car far more seriously. Owners will help it do that,” said Voelecker. “How Mahoney plans to use the owners is [to be determined], but if he can do it smartly, GM will have a leg up — unless or until Nissan starts to do the same for Leaf owners, who are still very positive on the car but relatively less so than Volt owners.”
Has the Chevy Volt in GM’s eyes long-since transitioned from once-upon-a-time potential Prius beater to sacred cow the automaker is now committed to, as well as a necessary product working toward meeting mandates?
Will GM’s marketers be enabled to go for far more gusto or will we see a protracted case of the Volt and the Leaf trading places? The Leaf will be next to be redesigned in 2016, and if it gets north of 160-180 or more miles range, that would raise the status for a car presently beating the present Volt’s sales but which may whither to a degree as new Volt orders begin.
Price, engineering, and performance have much to do with the new Volt’s market reception, as do perceptions – from the public evaluating the new Volt and from GM whose job it is to market, support, and sell the car.
After all this, where is the Volt heading? It’s already being predicted that the answer may be underwhelming for those hoping GM’s new car will break out from what it’s been sales-wise.
Is this GM’s game to lose? Or has it already thrown in the towel for those who remember talk of a mass-adoption strategy.
Beyond that, why in four years haven’t we seen or heard of any Voltec spinoffs? What is GM’s alternative energy strategy given its present product assortment – mild hybrids, no full hybrids, one electric compliance car, a diesel Cruze, the Volt and ELR?
GM’s profits come from bread-and-butter cars, SUVs and trucks. Does it need the Volt to ever be a bread-and-butter car or do Mahoney’s comments say the answer is no, and GM is fine with that?
Has GM designed the Volt to surprise us all? What’s the plan?