As Chevrolet formulates marketing plans for the 2016 Volt launching the second half of this year, it has a head start over generation one, but if there ever was a vision of the Volt surpassing Toyota Prius sales, that’s a premise Chevrolet doesn’t even want to entertain.
In a half-hour sit-down interview with Steve Majoros, Chevrolet director of car marketing, he accentuated the Volt’s positive prospects, set the tone of the automaker’s present vision, while acknowledging challenges remain.
The plug-in extended-range electric car is a full evolutionary redesign now offering 50 miles all-electric range – beating the present Volt’s 38-mile rating and more than doubling any plug-in hybrid sold in the U.S. It is clearly a solid product with improvements throughout.
But the Volt must now overcome a checkered history having been singled out in ire over bailed-out General Motors over which former CEO Dan Akerson during 2012 decried it was being made into a “political punching bag.”
Since launch, the Volt has had a kind of polarizing effect or been an either/or equation between those who comprehend and like it – and those who don’t.
Marketing plans now include spending more getting the message across during the five-passenger car’s “launch window.”
Chevrolet is already branching into new media including a dedicated Volt web page, brief video spots, social media like its FaceBook page, live web chats, and more.
Advertising will see a “geographic” concentration and undisclosed is Chevrolet’s commitment to nationwide ads although it says the restyled Volt ought to appeal to a “mainstream” audience, and as plug-ins catch on, it has a car it wants the country to know about.
Past, Present, Future
Developed as a concept show car for the 2007 Detroit Auto Show with former GM Vice Chairman Bob Lutz as its chief protagonist, there’d been talk into this decade of the production Volt superseding the Toyota Prius as the alternative energy car of choice.
Lutz had been goaded by both Tesla’s Roadster and the green cred locked down by the Japanese hybrid. He was also irked by negative perceptions against GM, and the Volt he’s said in a few different ways was GM’s answer to the Prius.
“Because I wanted to leap-frog ‘em. See, I asked myself, if I were Toyota and had done the Prius and had gotten all these accolades for it, what would be my next move?,” said Lutz to SF Gate in 2011. “And I told myself, my next move to stun the motoring public around the world would be an all-electric vehicle. So I said, ‘Why don’t we go all-electric with lithium-ion batteries?’ A lot of people in the company said, ‘Well, lithium-ion isn’t ready yet, it can’t be scaled up for automotive use.’”
The Volt does use lithium-ion batteries, but Lutz was soon talked out of an all-electric car and the “extended-range” idea was introduced by former GM Chief Technology Officer, Jon Lauckner. GM’s first all-electric car, the EV1 had actually pioneered non-production range extenders – gas engines tacked on – to enable test engineers to drive longer stretches than its battery would allow.
So is the Volt a Prius beater? GM’s Pam Fletcher, executive chief engineer for electrified vehicles said in a separate interview she thinks in ways it is, but GM acknowledges it’s not been a compete home run.
In its favor, a strong case exists the expected-to-be 41 mpg Volt offers a drivetrain that can save more fuel for most drivers than a 50 mpg Prius Liftback. Aside from design, performance, handling, and other features, one big advantage is its 50-mile EV range, enough, studies say, to satisfy daily driving requirements for three-quarters of Americans.
According to GM’s OnStar data, the Volt now goes an average 900 miles between fill-ups, and up to several months for some owners, while burning nary any gas – something the Toyota can never do.
But the Prius Liftback has had an 11-year head start, Toyota was never demonized to the degree GM has been, and the Japanese hybrid sells 123,000-145,000 units annually compared to the Volt’s 19,000-24,000. This it does despite being itself perceived as a premium product over say, a Corolla or other lesser priced conventional car.
The Volt however isn’t the only alternative-energy car that doesn’t hold a candle to it in the sales arena – none of them do. Out of 90 cars tracked on the HybridCars.com dashboard, the Prius Liftback outsells the next-best seller – its Prius c sibling – by three to one.
These are the facts, but Majoros and Chevrolet are focused on present circumstances and not open to discussing a theoretical mission to leapfrog the Prius Liftback.
“What Bob Lutz or any people said 6 or 8 years ago, I wasn’t part of those conversations, I don’t know what they said,” said Majoros. “To think that a, to me, going back in history, that Volt – where we’re priced and the technology and the promise that we make – against a $20,000 Prius, was going to supplant that – that doesn’t seem to make much sense to me.”
We reminded him the original goal for the Volt was to be introduced for under $30,000. If one subtracts a $7,500 federal tax credit, that could have made it a stronger value proposition next to the Prius.
But the Volt was launched at $40,000-plus in December 2010 and was panned as a high-priced Chevy compact until its price was officially cut to $34,995 in August 2013.
The Volt’s chief engineer Andrew Farah said GM has cut an undisclosed dollar amount of production costs from the 2016 Volt. This, one might surmise, could make it more possible to achieve once-upon-a-time pricing targets but GM has not announced the price and may not for a while.
Beyond Lutz’s hyperbole, an indicator GM once had higher aspirations for the Volt to be a volume seller was its projection of 45,000 U.S. sales for 2012, its second year. These were subsequently abandoned and the Volt never sold better in one calendar year than the 23,461 units delivered in 2012. Sales were essentially flat at 23,094 in 2013, and dropped to 18,805 in 2014.
Chevrolet’s Present Reality
Instead of acknowledging the Volt was ever meant to surpass Prius sales, Majoros noted a paradigm change of a different order. The reality is the Volt has long-since become the limited sales, but yet-pregnant-with-potential tech thesis that it is. And, it has a sizable almost devout fan base, is for now the top-selling plug-in car in the U.S. with around 75,000 sold, although the Nissan Leaf is due to overtake it this month or next.
Majoros said the Volt’s challenges from its launch included Chevrolet having to find and nurture this owner base, and it is now in better position for what’s next.
“So the advantage we have going into generation two here, is 75,000 approximately thrilled owners, a product proposition that every day gets better understood,” he said. “Its differences against a Prius and various variants, or other competitors, an i3 or whatever it is, we can help educate and understand and give people a sense that, and say, it’s a, the original mission of a no-compromise EV was true back then and its more true today.”
Now faced with the pros and cons he has been dealt – not once-upon-a-time talk that may have been based on insufficient information – Majoros noted before Volt came along, there was no real market for it.
“Back in 2010 we had no owner base, right? We didn’t know how to market this thing, right? it was like where do I go and how do I find these people and what do I say to them?” Majoros said. “We’ve all gotten collectively smarter and I think the public consciousness is that much smarter” he said citing public awareness of plug-in cars.
While he may have acknowledged it if asked, Majoros did not mention that GM-Volt.com single-handedly accrued a wait list of over 55,000 intenders to buy the original Volt.
Either way, the Volt for its maker is now a green halo, sold nationwide, but advertised for now only in California and tech events. The good news for fans is the Volt is still here, and appears to have been altogether improved.
Why Buy a Volt?
Gas is now hovering at $2.05 per gallon. Majoros correctly observed plug-in car sales have proven more resistant to fluctuations in fuel prices than regular hybrids because of the type of clientele they’ve been able to attract.
Still, we asked, will $2 per gallon gas hurt Volt sales?
“I don’t think so,” said Majoros. “Eighty percent of trips taken in a Volt are done in all-electric. These people are gas averse; they don’t want to use any gas.”
Put bluntly, the Volt is not being marketed as the cheapest thing to own and operate. Low operational costs are just one aspect of its total appeal. Surely, it does stand to save fuel, and Fletcher estimated owners could now drive 90 percent gas-free, and she estimated, the new Volt may average 1,500 miles between fill-ups to its 8.9-gallon gas tank.
But spliced into that fuel-saving message, the Volt offers an environmentally cool solution. It also has 10 airbags, nearly all of GM’s suite of sophisticated technologies and connectivity, and more “upscale” amenities and design features.
GM has been saying it for a while, and Majoros drove home the point: The Volt is attracting new faces to Chevrolet that could pay dividends across the brand. Volt buyers have traded in Acuras, BMWs, Audis, Mercedes – and Prii. Some of them never darkened the door of a Chevy dealer before it had this newfangled plug-in car.
“If you look at the demographic composition of these customers within the Chevy portfolio, they’re some of our highest household income, highest percent professional managerial, younger in the portfolio; the types of vehicles they’re trading in to come into the Chevy family,” said Majoros, “they’re the types of customers you want to bring into the franchise.”
Indeed Volt customers are often atypical for the bow-tie brand. The Volt is appreciated on a level that Cadillac aspires its cars to be, and this is not lost on Majoros who pushed for marketing photos and written copy evoking luxurious and upscale imagery.
At the same time, Majoros said price will remain important as Chevrolet is supposed to be synonymous with “good value.”
“I’m not ashamed to use the word ‘upscale,’ I don’t want to equate upscale with a trigger of price, a trigger that I’m going to go now and compete with Buick, Lexus whatever,” he said subsequently adding, “Volt has a nice way to cast a shadow across the Chevrolet lineup that provides a different dimension to our brand.”
The Volt therefore amplifies the tech, design, and style perception for all Chevy vehicles to some point, and so for Chevrolet, this is not necessarily a matter of making the Volt a high-volume car that can usurp the Prius.
Instead of a solution for the masses, like a virtual green Model T, the Volt has long-since morphed into a precious niche product seen for its intangible as well as tangible benefits both to the people who buy it, and those who market it.
If it can break out of that, then that would be great for Chevrolet which says it believes the new Volt can do better, but ultimately it is wait-and-see.
The Dealer Connection
Majoros asked us what some of the Volt’s biggest fans were saying positively and negatively. Having already shared some positives, a negative perception aired was that too many Chevy dealers are viewed as insufficiently motivated, or uncaring about the Volt, or competent to properly explain and sell it.
Majoros rhetorically asked whether this was a problem with Nissan and Toyota too, then followed that he believes it is, while citing known-excellent dealers like Capital Chevrolet which sold 75 Volts in December.
Learning from certain case examples like Capital, Majoros said Chevrolet essentially wants to synthesize and bottle what they are doing right and spread that wealth to the rest of the network.
“Trust me, we are investing significantly in dealer training resources, in tools to make sure that sales consultants know this is the type of customer that is going to walk through the door; this is what their expectations are; here are some things to help you to understand what their needs are; to help educate and train on what’s different because no doubt we have to have every sales consultant be able to say here’s what is different between gen one and gen two and this is a more complicated proposition.”
We then asked whether Chevrolet would ensure individual Volt sales people are compensated to hold new customers’ hands through what Majoros agreed can be a more-complicated Volt sale?
Majoros said dealers, as independent businesses, set their own compensation plans, and some would have varying opinions on whether they even wanted their sales consultants to be spiffed extra to sell a Volt.
Instead, Chevrolet is taking a paternal role offering advice, training and info as it can, assuming dealers’ self-interest and own business smarts will see them through.
“Let’s let individual dealers understand the market, let’s help them see the potential, let’s help train them and let’s put them in a position to succeed,” said Majoros. “And those that embrace that philosophy are succeeding. We need to replicate that formula and get it even broader, and utilize some of the best practices and things were doing to say there is a market here, there is a customer base, they have unique wants and needs. Here’s what we’re looking for, and here’s the way you manage that process from inception through delivery and the after-sales experience.”
As Chevrolet’s lead marketer setting the tone, Majoros says salespeople have only to gain in catching on and selling the Volt properly.
“Do I think it’s worth it for a sales consultant to understand Volt, understand the proposition to sell it?” he asked rhetorically. “Absolutely, because this market isn’t going away, its only going to get bigger.”