Sprinting to year's end, GM lets dealers sell Volt demos
General Motors has a goal to meet: Since the Volt’s launch, the company has said it will sell 10,000 in North America for its first calendar year, and it has two months to make up half that amount.
From January through October, it sold 5,003 Chevy Volts in North America. It is now well underway toward rolling out the car from an initial seven states in the first few months to nationwide by year’s end, and production capacity is up. But can it sell another 5,000 in November and December?
The pressure is especially on because the car has been made by some into a political football. For all GM’s stated good intentions of green energy and jobs, and so forth, there are pundits also hoping to see the company that was bailed out fail.
Having cited limited Volt supply all year, yesterday, GM pulled out the stops by allowing its Chevrolet dealers to discretionarily sell their Volt demos effectively making 4,100 Volts available for sale. The Detroit-Hamtramck assembly plant is meanwhile cranking them out at around 2,300-plus per month.
These demos are part of the company’s larger marketing efforts, and in cases are the only Volt on some dealers’ lots. Letting them go represents a temporary sacrifice on that front.
While conceding the 10,000 sales goal, 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.”
Another issue GM faces is a disproportionate allocation. While some dealers may have the car and haven’t managed to sell it, other dealers in the country have open orders and are waiting to fill them.
Peterson said the stop-gap measure will partially 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.
In total, there are around 2,600 independent Chevrolet franchises that have agreed to sell the Volt. If there was doubt about the Volt’s supply to demand ratio, the latest word is until now only 1,800 Volts have been thinly spread among these dealers.
“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.”
Since the decision whether or not to sell a Volt demo will be up to individual franchises, we shall see how this all plays out. If a dealer chooses not to sell its demo because it feels it is a better business decision to keep it and show it, that is out of GM’s control.
While some have reported GM has told its dealers to sell their demos, Peterson gave no indication whether it is encouraging them to, and said it was strictly voluntary. GM will however incentivize its dealers by $1,500 per car for removing the Volt demo graphics, and putting it up for sale, so you can interpret that as you will.
Peterson also said the “decision to make demos available was only recently determined based on feedback by dealers,” and was not part of the initial plan.
He 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.”
As for demo pricing, this decision is also left up to the dealer. This year critics pointed out dealers that were asking above-MSRP prices, from a few thousand dollars right on up to ludicrous markups. GM has consistently said it cannot control this, but does what it can.
“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.”