OK, so none of these cars are actually “competition” for the Chevrolet Volt, but think of them as a benchmark “basket” and they can help define the market the Volt will soon be thrown into.
Pre-recession, the Prius was headed into the sales stratosphere, goaded on by apocalyptic gas price fluctuations. BMW’s Dreier was on a path to utter domination before the CTS and G37 launches ate into its space, but the newcomers faded after a strong start and the 3-Series took off again before the credit crunch hit. The Cadillac’s performance compared to the G proves that American brands are at a disadvantage at luxury prices, while the Boxster/Cayman sales show how low volumes can be at higher price points, even for a top-notch luxury brand. MINI proved that an increasing number of buyers will pay premium prices for the right compact car, and that these buyers could help stave off sales declines in weak economic conditions. Taken together, these numbers still paint a complicated picture of the Volt’s future. That the Prius has overtaken the 3-Series is a good sign for the Volt, but the CTS/G-series results don’t bode well for the Volt/Leaf throwdown.
The Prius is clearly the Volt’s model, with its slow four-year ramp-up to relentless sales growth… but the Prius had a base price of $19,995 (about $24,500 in 2010 dollars) when it launched in the US in 2001. Before that it sold in Japan for closer to $17,000 despite reportedly costing $32,000 per car to build. Incidentally, that amount comes out to about $43k in today’s dollars, or some $2k more than the Volt’s base price. But then Toyota didn’t launch the Prius a mere year out of bankruptcy, and it was growing strongly enough to sustain the loss necessary to build the Prius name until energy prices started jumping. With the Volt starting at $40k, it’s not at all clear that the Prius model will apply to its sales… especially with numbers for the recently-launched Lexus HS250h “luxury hybrid” doing so badly (6,492 sold year-to-date).
“The Cadillac’s performance compared to the G proves that American brands are at a disadvantage at luxury prices…”
Are you talking about the sales numbers or the cars’ performance? Because the sales dynamics of both the G and the CTS is basically the same, while the CTS outperforms the G on the technical level.
On another note, I don’t think that any car on the graph is a good model of the Volt’s future. All the Volt needs now is a strong marketing effort so that it becomes part of the mass consciousness even before it becomes widely available. Think the Prius fast-forward way.
Are you talking about the sales numbers or the cars’ performance?
I was referring to sales performance
I don’t think that any car on the graph is a good model of the Volt’s future.
I agree, but I think that “entering the public consciousness” is a tough feat for anything that costs $40k. As I point out, the Prius cost $43k to build when it first came out, but Toyota sold it for about $23k (in 2010 dollars). Today, the Prius costs about $23k. That’s clearly the model for overpriced green halo cars entering the public consciousness, and the Volt is consciously not taking it.
“but I think that entering the public consciousness is a tough feat for anything that costs $40k.”
True, but I still believe this can be achieved without resorting to selling the car below its cost.
– Eg, Obama’s picture with the car should be periodically re-taken.
– GM should make sure the car constantly and consistently receives good press; no stupid mistakes like that Opel engineer blabbing that the on-boarsd gas engine could be used to power the car.
– Offer some dozen of as-American-as-the-proverbial-pie families to use the car for a month for free and then flood the media with their interviews and positive experiences.
– Advertise the car as something like “Our answer to BP” and do that RIGHT NOW, while the spill event is till fresh. This could be a good one, “BP spills of the Volt’s thrills? YOU choose”
Not just related to the Volt, but I’ve been surprised by the low yearly sales figures on a lot of models (Suzuki anything, Chevrolet Colorado, etc.). Can a manufacturer really make money at these levels, and at what point is it cheaper to just quit making them?
How many cars are sold each year that cost more than $30k as those are the competition of the Volt and as such the target market that can afford it.
ps. The real competitor of the Volt is probably the $40k Mercedes/Lexus/Cadillac.
If what you say is true about competing against Mercedes/Lexus, it may have been a mistake to make the Volt a Chevy rather than a Buick, or even a sub-brand of Chevy a la Scion/Toyota.
Talking about sedans only, the $30K number excludes most of your volume mainstream midsizers, and even a chunk of the fullsizers, pretty much leaving you with the luxury brands. If you expand ‘car’ to mean ‘vehicle’ some of the best selling vehicles in the country routinely sell for well over $30K (F-150, Silverado/Sierra, Tahoe, Edge, and many other midsize and large SUVs/CUVs).
Americans are clearly still willing and able to pay big money for cars they want, but I question how many will be willing to pay big money for something whose big draw is great gas mileage. I get lots of customers who come in looking for hybrids who switch to traditional gas-only vehicles after seeing the difference in selling price and doing the math in their heads. Yes, the hardcore greenies may be willing to pay the premium for the image, but those people who are looking for lower fuel costs will be swayed by getting something that costs a lot less even if they do have to pay more at the pump.
I’ll take the Cayman. If I want gas mileage and reliability, I’ll take the Prius.
I suppose the Cayman belongs here given the price points we’re looking at. Base Caymans are about 50K, but the Volt includes free metallic paint, which is a 20K option on all Porsches :)
With a solid economic recovery and $4.50/gallon gas, the Volt will sell. Of course, GM’s pickup profit machine would then crater.
Good point, that’s a catch-22 for their overall business model.
Typically the die-hard environmental crowd is more into the hipper nameplates. I see the target market (treehuggers with large amounts of expendable income) eying the Volt with condescension and suspicion. It’s kind of like Microsoft trying to make an Apple-esque product and trying to sell it to hipsters and college kids. No matter how good the product is, it will always have to dig itself out of a huge hole created by the past of its parent company.
I don’t know if the Mac vs PC argument is the best fit here. While Apple does have a disproportionately high market share amongst college students, it is only high compared to their overall market share amongst all demographic groups. Windows PCs are still more common overall on college campuses as they are pretty much everywhere else.
Keep in mind that the big name in hybrids, Toyota, isn’t exactly a hip brand either, with the average age of Toyota buyers being closer to that of Buicks than it is to Kias.
True, Toyota isn’t exactly a hip brand like MINI or VW, but it isn’t Chevy either.
Toyota has also managed to make “Prius” somewhat transcend the larger Toyota brand. I’m sure GM will want to try something similar with the Volt, but it will take time.
It could be that I’ve just heard one too many mullet/trailer trash jokes in my life, but I think dagwood might have a point.
Without high gas prices the Volt is going to need environmentally conscience folks to buy. Now I might be thinking unfairly here, but I just don’t know how devout green people will feel buying a car that shares the showroom floor with the Camaro, Corvette, and Suburban.
Maybe some of the progressives on TTAC can attest to GM’s potential green image given that they made the Hummer, muscle cars, Buick Roadmaster* and military vehicles, etc.
Toyota may be an industrial behemoth but somehow seems to have a more svelte, imported flair vs GM’s ‘bad guy’ image if you’re a concerned member of the green police’s citizens on patrol unit.
* called “Saddam’s secret weapon” in a political ad by an anti-military progressive group back in the 90’s
The Volt @ $41k should be a complete failure at building any kind of volume. Paying double the price of a roughly comparable hybrid to get the all electric bragging rights is the sort of thing only a very small number of early adopter types will do. Maybe GM will sell a few thousand a year to the fringe, but mainstream buyers are not going to go for it.
Part of the genius of the Prius is that it has always been priced in the heart of the Accord/Camry price range.
I have to agree, if they can’t get the price down the Volt will die. I think there will be enough early adopters who will pay a premium for a couple years to keep the initial low production numbers moving, but once they ramp up they need to hit Camry pricing, or give it up.
I wonder if people will cross shop The Volt with the Lexus HS 250. I also am curious to see which will sell at the highest volume.
The Volt has a more limited market than the Prius. To take full advantage of the Volt, you have to plug it in at night. The problem in many places like Washington DC and parts of the Boston area is that you have to park on the street and odds are it won’t be in front of where you live. The same problem exists for many apartment complex residents as well.
Cambridge MA (tree hugger central) would be a huge market for the Volt, but there’s almost no place to park and plug in a Volt. A huge percentage of the residents are restricted to on-street parking. Although, I wouldn’t be surprised to see a few Volts there anyway – they’ll just run them on gas only.
Just think of how many pranksters will unplug and/or steal that extension cord during the night :)
What? The Smart ForTwo is not considered part of the Volt’s niche?
The Volt has two things going for it, now that the price and terms have been announced. First, the $41,000 price tag gets a $7k tax credit from Uncle Sam. Colorado and California residents get additional incentives. So that brings the price way down.
Also, Chevy has announced a $350 per month payment with a $2500 cap cost reduction. Even in these times, that’s leasing a lot of cache for an ecoweenie. Since they’re bringing these things to market in areas where leases are more popular with “buyers,” it’s going to look like a home-run for GM, which could look good for their stock-reissue.
On the other hand, GM is launching these things in areas where people don’t drive long distances much. That’s a two-edged sword. It’ll look good to outsiders who don’t know that people in these areas don’t drive long distances. But once the Volt goes on sale in places where people need to drive long distances just to go to the store, then I don’t think the Volt is going to do well.
Of those 6 vehicles, the 3 series was on a past shopping list, the MINI is already in the garage, and the Prius is on a future shopping list. I’m a proper young DINK family that loves new technology and/or quirky toys. Heck, my Cannondale bicycles have one sided suspension forks (Lefty). I also try to be environmentally conscious, so one would think the Volt would aimed straight at me.
Looking at my own situation, the Volt would put my cost/mi through the roof. I have a <6 mi commute, my wife's commute is <11 miles and only 3x/week, but I still manage to put 25k miles/year on my 3 vehicles. So, while the Volt would use no fuel on our commute, the bulk of our mileage is driving to my parents', Pittsburgh, Columbus, etc. On these trips, which are all 2~4 hr drives with no place to plug in, the Prius will likely return much better fuel economy and come in around $10k cheaper. I did the payback calculations for a Volt versus a nicely loaded Prius, and it is on the range of 17 years… even after the government subsidy, for my driving patterns. Basically, it saves me the largest percentage of money where I don't spend much of my money.
But don’t you think most environmentally concerned folks will put the interests of the planet above their own pocket book?
Which is why if you want to be truely “eco-friendly”, a Nissan leaf or comparable EV will be the ideal choice, emitting no CO2 emissions and having twice the range.
At a significantly lower ($26k after the same incentives) pricepoint.
LOL at the Volt. Good luck guinnae pigs.
“But don’t you think most environmentally concerned folks will put the interests of the planet above their own pocket book?”
Yeah, remember how many people were lined up to lease EV1s! Oh, never mind.
Contrary to popular belief, the #1 thing that “killed the electric car” last time around was how few people actually put money on the table for one. Yes, there were a some very loud people who didn’t want to give theirs back when the lease was up, but over a four year period of time, only about 800 people actually signed on the dotted line.
“Contrary to popular belief, the #1 thing that “killed the electric car” last time around was how few people actually put money on the table for one.”
I thought what killed it was the fact it was a premium priced two seater econobox.
Anyway, the Volt is also a premium priced econobox, so it will never fly.
GM doesn’t want the Volt to succeed any more than they wanted EV-1 to succeed. It’s great PR, a way to get government funds, and it’s a tax write off. And after a couple of thousand people pay double what the car is worth (relative to the other choices available) that will be the end of that and GM can say, “see? people don’t want electric cars” and go back to focusing on their bread-and-butter jacked-up station wagons styled to look like trucks.
@FleetofWheel and GarbageMotorsCo
Coal powered cars are eco-friendly?
You know, right now in my city, a Lexus HS250 can be had at about $37k Canadian dollars after rebate. (MSRP for V6 Camry XLE is about $35k).
The HS250 is based on a 10+ year mature platform, tested and true. With legendary Lexus reliability. Well loaded. With the “L” badge.
You get the idea.
Why would anyone spend a similar amount of money on something from GM is beyond me.
GM and the government would rather you not bring up the Lexus HS250 or any other entry-lux/luxury vehicles you can buy for the less money than this Chevy econo-box. It clouds the optimism and the hype of the Volt.
Thanks,
The managaement
Misunderstood patriotism may be one reason. Worse when combined with ignorant and wrong-headed crackpot environmentalism. I am sure some people possess all of these traits and will buy.
Just my opinion, but the more you look at this deal it seems GM has really stepped in it. They decide to drag out ideas of a car with really no idea of how to build it, as a knee jerk reaction to the popularity of a competitor.
Then they hype the crap out of the idea, while gas prices start to drop. Now they are on the hook for something they never really wanted to produce in the beginwith.
Then they try to rush to market with really an unproven technology and find it’s too expensive for them to come out with so they have to jack the price up. Nevermind GM’s poor record on new tech in automobiles i.e. CVT’s in VUEs, Cadillac Northstar engines, Corvair well, everything, and of course their half-assed diesels of the 80’s.
This thing has disaster written all over it and they know it. If you look at what they are doing “you know they know it” too.
I assume this is why they are moving hard to beef up East Asian operations, letting Opel/Vauxhall/Holden die on the vine, and badge engineering the same crap for nearly twenty years. They are hoping to be the first to a new market, where at the current their name isn’t mud, but still carries a value even if small, like Buick in China.
They aren’t nearly concerned with the future suckers in Peoria as they are of the future suckers in Bejing. Why would they be? Americans won’t have cash anymore even if they wanted to buy a rolling turd. And “they know that too”.
Many times I bet they could just wad up the prints to the Volt and round file them.
“This thing has disaster written all over it and they know it. If you look at what they are doing “you know they know it” too.”
You know it, I know it, but most people (even here) seem to be fooled.
Probably most people just believe what the media tells them to believe.
Otherwise we’d have had a revolution by now.
Just about every car company that doesn’t currently have viable electric or hybrid cars for sale, has by now shown some me-too concept cars with such drive trains. However, is any company even trying to replicate the Volt?
I like the graph and I think the article poses an interesting theory. I’d love to see a graph (if you haven’t already done it) comparing hatchback sales to those of comparable sedans. Maybe you could hypothesize on how the Lexus CT200h sales will compare to its “competition” (I’ll leave it up to you to figure out exactly what models that would be).
RE: NulloModo
“If you expand ‘car’ to mean ‘vehicle’ some of the best selling vehicles in the country routinely sell for well over $30K (F-150, Silverado/Sierra, Tahoe, Edge, and many other midsize and large SUVs/CUVs).”
I think one reason these larger vehicles sell so well is because they are frequently used for business or “grocery hauling” family use. I think many would agree that running households for most families is serious business and when you spend many weekends transporting trunk loads of goods from Home Depot and Target (which inevitably overflow into the backseats), having a pick-up or some type of utility vehicle seems pretty sensible. Also, correct me if I’m wrong, but aren’t vehicles used primarily or solely for business purposes eligible for tax credits, or at least significant write-offs?