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.”

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  • Yegor
  • Capt. Concernicus

    “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.”

    –So the dealer gets $1,500 for taking the demo graphics off the car. Does this mean that the dealers will now be pawning off Volts that were demos as “new” cars now? There by being able to charge full sticker price for the “new” (I mean demo) Volts?

    Something just sounds fishy about this.

  • Yegor

    No, they will not try to do it – it will be a used car – any buyer can see that it has 1000+ miles on it.

    But I am still wondering how $7,500 tax credit will work here?

  • Jeff Cobb

    Yegor – GM’s Rob Peterson says only a handful of demos might have to be sold as used, and not eligible for the tax credit. Most will be eligible.

    It actually depends on state-level statutes defining (state-by-state) what constitutes used vs. new. If the demo has more miles than the statutory limit (several-many thousands), it must be titled as used, I’m told. The dealer is permitted by law to take the credit, but the story of them deliberately and systematically doing it was debunked. I’ll observe also that if a dealer wanted to lower the price, he could, not that I know of any specific examples. If he collected the credit on a high mileage one, etc., he could pass on savings. It would be case by case; no doubt the exception by far, not the rule.

    Some dealers are opting not to sell their demos because they are useful sales tools as a “halo” vehicle, and get used in local promos, public appearances, etc.

    Capt. Concernicus – The $1,500 is a total compensation for sacrificing the demo and prepping it, etc. Nothing fishy really.

    Another person thought these were old 2011s being kicked to the curb after a mandatory 6 mos holding/use time. That’s not true in most cases either. About 1800 demos are fresher 2012s minted since summer. Of early 2011 demos dealers got from Feb-onward, about 100 have been sold, and about 450 of the 2011MY demos remain.

    GM says allowing dealers to put them up for sale is just another tool for dealers to satisfy customers if they need to. The decision was made recently at dealers’ request.

  • Yegor

    Jeff Cobb, Thank you for clarifying!

  • @bobbleheadguru

    JEFF (or anyone else)… please help with this question.

    My understanding was GM stated that they would have 10,000 vehicle built that were available for sale by the end of 2011.

    However, I see reports everywhere that that they said they would sell 10,000 units.

    It looks like they will hit the first number easily. The second one is a longshot.

    I looked back through the press releases and found this:

    Here is the quote from that press release (dated “2011-03-04″… not sure if that is March or April):
    “Chevrolet plans to produce 10,000 Volts by the end of the 2011 calendar year, and an additional 45,000 Volts during the 2012 calendar year.”

  • Jeff Cobb

    Hi Bobbleheadguru –

    I think you can download a pdf here –


    It shows GM already exceeded the 10k mark with 10,896 produced as of October. That’s not the goal. The goal is 10k delivered to paying customers, not to dealers’ lots.

    GM has said all along they will deliver 10,000 to North American customers, 16,000 total for calendar year 2011. Volt spokesman Rob Peterson says they will not know until December if they’ll make it.

    Interestingly, only 4,488 MY2011s were ever produced at Detroit-Hamtramck. After the summer shutdown and restart, the cars coming off the lines were MY2012s, so it was a half year only for 2011s, though they all count toward CY goals.

    October was the first time the Volt cracked 1,000 sold in a month, and they are ramping up faster. You can read more on that here –


    I’d be surprised not to see Volt sales records in Nov and Dec, but we shall see.

    Peterson and GM are now playing it down saying whether they make it or not, they are not sweating it. I basically believe them, though I know they would really like the bragging rights if they can achieve them

    If they do drop short of 10k Volts delivered, the media will have a minor field day from either simply reporting it or in cases lambasting GM, as there is a medium-sized line of GM haters, and GM green car haters post-bailout.

    The real bottom line is longer term. How the Volt does in CY2012 will be a much better indicator of how the Voltec experiment goes. They will be out of excuses next year, and cannot say availability was an issue in 2012.

    Also, GM CEO Akerson says the company foresees a completely flat year in company wide NA sales for all its types of vehicles in 2012. If it is flat, they have said they are prepared to ride it out and are relatively cash rich with over $38 B in liquidity, and with well-engineered ICE vehicles that are selling, and decent market growth in other parts of the world.

  • tapra1

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