General Motors’ first major reduction of the Chevy Volt’s price by $5,000 for the 2014 model year has been attributed to incremental reduction in some production costs and the need to stay competitive, but there were other nuances involved as well.
According to a Wards Auto report today, GM says online consumer shopping habits also drove the decision.
“The market dynamics are changing, there are savings [we] have identified and then there are consumer habits at some of the shopping Web sites,” General Motors Vice President Chris Perry told Wards. “Their cutoff has always been $35,000 and below, and we were always above that.”
Essentially, many shoppers were missing the 2013 Volt in searches because it had a starting MSRP of $39,995.
This is true despite the fact that last year’s Volt might have met their price criteria considering dealer discounts, a $7,500 federal and possible state subsidies. Because of shoppers’ random criteria, the car was as good as invisible to those with sites set on a $35,000 maximum.
So, GM was further coaxed to lop off the top $5,000 which it had essentially been all but doing in some cases already.
Perry however would not divulge what the 2014 Volt’s price cut did to GM’s profit margins, and focused instead on key benefits for the car which the EPA says goes 38 miles on electricity alone, and then seamlessly continues with a 1.4-liter gasoline generator.
“It has always been about showing [consumers] the technology we can bring to the market,” he said to Wards. “That car, in my mind, is still the most technically advanced in the industry with its E-REV technology.”
And, if consumers want to wait another year, GM expects the 2015 Volt will sell for even less.
How much less, is up in the air however. Perry did not say, nor did he say whether a redesign for the so-called “gen 2” Volt would take place that year.
More likely, it may be 2016 according to reports, but this too is not certain for a car slowly but surely gaining acceptance in the general marketplace.