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From TTAC commentator KixStart: "I don't know if you listened to the GM April Sales and Production Conference Call… I did. There's an hour of my life gone, again. But I have a morbid fascination for the fortunes of GM's hybrid program, so I hung in there until someone, I think it was a reporter from Bloomberg (the audio on these things makes the automotive AM radios of my youth sound like Dolby 5.1), finally popped the question. "How many hybrids this month?" Marketing chief Mark LaNeve revealed that sales of all GM hybrids were "over 1100" for the month, with "just over" 500 two-mode hybrid Tahoes and Yukons. This brings GM to "1980 for the year;" all types, all models. Or about 10 percent of a month's worth of Prius sales (I looked, they're still over 20K this month). As LaNeve put it, "we almost doubled for the month, as we continue to get availability for the models out to the field, we anticipate we'll pick up volume every month." Interestingly, the big two-mode sales are about the same as last month, so the BAS mild hybrid systems must have jumped from about 120 to about 600. Still… we're way beyond testing the waters to see if the market will accept hybrids. If they're too expensive to build, GM should just give it up and focus on products where they can make a profit. 35 Comments on “GM hybrid outlook: from ‘suck’ to ‘wretched’...”
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“If they’re too expensive to build, GM should just give it up and focus on products where they can make a profit.”
But, doesn’t that make TOO much sense??
But, in North America, they can’t seem to make a profit on ANYTHING. As in they are losing money year after year, quarter after quarter, month after month, week after week day after day and hour after hour.
So, the real question might be – should they simply give up?
Were I work we make a part for just the Hybrid Tahoe and Yukon models. I sat in the plant managers overview of the business for our Annual External Audit TS Quality audit. The chart that went up was for 50,000 parts GM was projecting for sales of those 2 vehicles this year. I guess they are expecting a real upturn in sales.
I like your caption text: “We believe this strong hybrid on a full sized truck will save twice as much fuel per mile as a comparable small hybrid vehicle.”
Where do they find those marketing people? That paradox is only possible because their full-sized truck is so thirsty.
@daro31: didn’t GM forecast 100k Envoy XUV’s?
The June issue of MT tested 5 small SUVs including the VUE “brownline”.
IIRC it tied for poorest mileage and was the slowest accelerating. The BAS vehicles are Why-brids, extra expense and complexity with no proven benefit (the RAV4 had something like 20% better mpg in the test).
The Takon twins do seem to be delivering decent mpg but the cost is huge and a Lambda gives similar function and mpg at a vastly lower cost.
The only mystery is why anybody buys any of GM current hybrids.
Bewilderd,
Bunter
@daro31: didn’t GM forecast 100k Envoy XUV’s
I don’t know about previous forecasts but yesterdays charts for all both models for 2008 was 50,000. The lines for these parts havn’t even run for the last month.
I like the two mode concept, but if GM wants to recoup any money in this process they need to create volume. Let’s see a two mode STS, perhaps a few two mode CUVs and a two mode G8 please.
Whats the supply side of this look like?
Seriously. Maybe they aren’t up to speed yet?
Oh, and focusing on products they can make a profit on might make sense….except CAFE makes this pretty difficult.
GM hybrids make as much sense as placing a first-stage Saturn rocket engine on a tricycle – they’ve got it bass-ackwards: SMALL car, fuel efficient engine. That’s what people want.
GM has already gone with the decision to sell what’s profitable and not develop their hybrids. Now look at where they are compared to the competition. If you want a hybrid, no one in their right mind thinks GM.
No company lives forever not making a profit, but if you don’t invest your R&D money wisely into technologies that aren’t profitable now but may well be with appropriate development…
I suspect a lot of companies threw their hat into the fuel cell ring and spent like crazy in hopes that it’d pan out. Problem is, they skipped the intermediate step of developing the power and control systems they’d need when the fuel cell is available. With hybrids, Toyota and Honda are developing the knowledge and experience they’ll need when the fuel cells are ready for prime time. And if they don’t, then they’ve got industry leading hybrids that people want.
“Whats the supply side of this look like?
Seriously. Maybe they aren’t up to speed yet?”
That’s probably a lot more to do with it than people think. As per the CNN Money article that went as follows:
“It’s not that GM doesn’t have any hybrid products. In fact, the automaker boasts more different hybrid models than any other company except Toyota, the company that makes 85% of all hybrids sold in America. It’s that GM isn’t building many of them.”
That could also be due to switching to Panasonic as a battery supplier versus Cobasys.
It’s also worth pointing out that if GM only sold 843 hybrids in the first financial quarter (January, February, and March), and then sold 1100+ hybrids in April alone (!), that’s a rather striking increase in sales, at least percentage-wise. At the end of June I’d expect to see them spin their sales in a positive way.
Heck, Honda hasn’t been able to sell hybrids, Nissan is only half heartedly selling a few Altimas, and other that the Prius — how is the Camry hybrid doing at Toyota?
The reality is, that other than those who want to make a statement from a recognizable hybrid, e.g., the Prius — the other hybrids are not flying off the shelves.
I think the cost factor is a big one. And I bet with so many people leasing cars, few of them think the much higher monthly rate on a hybrid vs a regular gas car is worth it.
Most buyers are sold on monthly payments, too — so hybrids are really at a disadvantage.
/p
@peteinsonj: Heck, Honda hasn’t been able to sell hybrids, Nissan is only half heartedly selling a few Altimas, and other that the Prius — how is the Camry hybrid doing at Toyota?
The reality is, that other than those who want to make a statement from a recognizable hybrid, e.g., the Prius — the other hybrids are not flying off the shelves.
Camry hybrid is selling very well:
http://www.autobloggreen.com/2008/04/30/camry-hybrid-selling-at-record-pace/
Honda Civic Hybrid was not bad in 2007 (32,575 units), but their practicality is limited by the lack of a hatchback in the lineup. Prius is killing them in that segment.
I swear to God GM just looks at a concept that works and does a 180. See below…
Compact-ish pickup with brute looks and a good dead-reliable 4cyl engine? Hah! We’ll do a too-tiny 5-cyl piece of crap with a Fisher-Price interior! That’ll show that silly Tacoma! It’ll sell much better if we jack up the price beyond our full-sized trucks too!
Compact small car with class-leading dynamics and a refined-to-a-fault small displacement 4? No no NO! We’ll do a mushy bland sedan with no personality, fake wood trim, and a Cuisinart of an Ecotec! Oh heck, let’s forget about sophisticated multi-link rear suspensions, nobody likes those, we’ll toss in an old twist beam. Nobody will want a Civic then!
And, oh dear, what’s this? Those silly Japanese put batteries in a midsize that fits in a compact space. Stupid, stupid. Nobody likes hatchbacks. Or hybrids. And people certainly don’t want 45 MPG with space for four in comfort. Silly fools, clearly everyone wants a behemoth SUV that gets 22MPG and only costs $15,000 more than comparably (incentivized) equipped Tahoe. Duh. We’ll do that!
It never ends. I swear the only concepts they haven’t mucked up are the Corvette (thank goodness) and the big pickups. It’s so infuriating to see them staring at a recipe book for success, year after year, decade after decade, then just throwing crap at the wall to see what sticks.
The Fit wasn’t genius, it was obvious. So was the Yaris, and Scion, and the Prius, and the Highlander, and the Versa, and the RX, and, and, and.
C’mon GM, just build the “duh, this is what works” car we all know you can. A real Civic competitor. A real Prius killer. Something to slaughter the Tacoma. It’s been spelled out in front of them for so many years it’s just sad at this point.
My Chevy dealer(s), here in hybrid-happy Los Angeles, can’t give away GM’s lame hybrid ideas. They’re all piled up on lots. Toyota and Honda are sold out though, wonder why?
The problem is, GM’s hybrids are inferior hybrids.
They are not worth the trouble, considering the cost and complexity, for the gain in fuel efficiency.
I’ve been puzzled for a long time: how can GM be so out of touch with reality? Don’t they do market research?
Oh, and focusing on products they can make a profit on might make sense….except CAFE makes this pretty difficult.
Stop blaming CAFE. Ford, Toyota, Honda, et. al., operate under the same requirements and make a profit.
Arrogance Lack of planning is the more likely reason for GM’s continuing losses.
GM has been trying to copy the Camry for almost 20 years and hasn’t gotten it yet. What are the odds that they can deliver something like the Prius?
I’m not sure I see a strategy for GM here. Some sort of alternative powertrain technology- probably several different ones- are going to succeed. GM doesn’t seem to be doing any of them well. No common rail diesel, no decent hybrids, no tiny one liter twin turbos.
GM is absolutely genius at getting the least return on R&D efforts possible.
I’ll say it again. Having a bunch of MBAs without engineering, science or marketing training running a manufacturing company is a bad idea. I can’t think of a single modern growth company where the leadership doesn’t have a solid technical foundation (outside of banks and accounting firms).
I still think that GM should stop building non-hybrid large SUVs. It would provide greenwash and justify the development expenditure.
The problem is, GM’s hybrids are inferior hybrids.
They are not worth the trouble, considering the cost and complexity, for the gain in fuel efficiency.…
I can’t agree with those statements. The GM two mode hybrid system is certainly NOT inferior. It allows for a real boost in efficiency. Ratings go from 14 MPG to 20 in the city cycle, a boost of 45%. For those who need (or just want) a Tahoe that is a real improvement. As for the simple hybrid system in vehicles like the Malibu, the economics work even better. Factoring the overall cost of the system, plus the tax benefits, the system can actually pay for itself in a reasonable period of time. Yes, a 2 mpg improvement does not make a newsworthy headline, but the cost/benefit looks pretty good.
These big trucks are not selling because those who normally buy them are reevaluating if they really need them. Now that cost of operation hurts, many have realized that there are more economical alternatives and that what was once perceived as a need was really a desire. I can’t fault GM for thinking of ways to keep their most profitable line selling.
The biggest miscalculation in the hybrid world was the Accord hybrid. Instead of going for a real improvement in mileage Honda went for power instead. Hybrids appeal to those who either want high mileage or to those who are environmentally conscious. Those who look for performance are not impressed by excess weight and battery packs. This car was doomed from day one.
golden2husky, are you smoking crack? The Malibu was rated about the least effective ‘hybrid’ in terms of payback last I saw.
My bet is on GM deciding to prove that their early statements about hybrids not being profitable were true. Toyota must be some kind of mirage.
Fact check for M1EK:
The Malibu hybrid was actually rated #2 in hybrid payback in a CNN comparison. Second only to the prius, and ranked above the Camry and Escape. The hybrid premium was roughly $535, after tax credits.
http://money.cnn.com/galleries/2007/autos/0711/gallery.hybrids_that_pay//index.html
Seriously, I’m surprised no one else is making a big deal about how their hybrid sales – however small – have jumped 300 frickin’ %.
Sure, but only because they still get the hybrid tax credit – which is a friggin’ joke on that model (and something owners of good hybrids haven’t been able to get for a very long time).
Taking a look at that site and noticing the price is about the same as the Prius is pretty informative. Why not compare the Malibu ‘hybrid’ to that car as well, since both are mid-size according to EPA?
AES, That article is from last year. The last time I looked, the Malibu hybrid price was up over $24K. The price of the base unit has risen, too, but it looks like the “hybrid premium” gap was widened, I figure it for something like $1500.
Still, is there a compelling reason for a Malibu or Aura hybrid, when the Prius is less expensive?
HwyHobo-
Anyone got an idea of how many Prius & Hybrid Camry sales are going to fleets? I commute into NYC everyday. The taxi/limos commission has mandated an all hybrid taxi fleet & most of the new yellow cabs are camry hybrids & escape hybrids (there are several private car services that operate 100% prius fleets too). Like any piston head I pay close attention to nearly every nameplate that I pass (downshifting, changing lanes & zipping into empty traffic voids) and I estimate seeing maybe 1 non-taxi C-hybrid per commuter Prius in the mix.
Based on the the link you shared, Hybrid Camry is selling about 6,4k units per month. I wonder how many of those are going into large metro city taxi fleets if the NYC trend is being repeated around the country. Anyone seen any published estimates on this angle?
Kixstart- The article is from last year but the premium is still in line with what you quote. Per the article’s “535 + 1300 tax credit”, that’s 1800 vs. the 1500 you anecdotally cite.
Sort of hard to gauge by the official chevy site, since trim levels vary.
“Still, is there a compelling reason for a Malibu or Aura hybrid, when the Prius is less expensive?”
Oh I dunno, not wanting to sell one’s soul out to the devil? Wanting a mid-size car that’s actually midsize?
I’ll be honest though, if I were in the market for a new car, and at that, a hybrid, I would wait for an updated BAS system with lithium ion cells. The current system seems like more of a placeholder.
AES, I looked at Edmunds just now. Allowing for the tax credit, it seems the Malibu hybrid premium is just about $2700. The only option that the Malibu hybrid appears to have that the base car does not is floor mats. Allowing $100 for that brings the premium down to $2600.
“Oh I dunno, not wanting to sell one’s soul out to the devil?”
How is buying a car from a company with a good record of delivering values, buying the most fuel-efficient car on the market, “selling one’s soul to the devil?” You’re aware of the world oil situation. What has GM done to take a leadership position in reducing our oil demand?
“Wanting a mid-size car that’s actually midsize?”
The Prius is midsize where it counts. I’ll take a midsize interior and an easy to park exterior over a midsize interior and a more difficult to park exterior any day.
“I would wait for an updated BAS system with lithium ion cells.”
That will raise the cost.
But it hardly matters if GM won’t build them and send them to dealers.
Supply sux.
My wife and I were looking at VUE’s last week and we asked about the GreenLine with BAS mild “hybrid.” The salesperson practically laughed in our face. She said thay simply can’t get any… the 1 they’ve been allocated has been sold for 2 months.
I REALLY hope they don’t have the same issue with the VUE 2 mode when it debuts.