Desperate to Sell Volts – GM Offers Steep Discounts
It almost seems too good to be true when you read about a manufacturer offering steep discounts on any vehicle, especially a newly released vehicle. The Chevy Volt – only released two years ago – is now on sale for up to $10,000 – or 25% off – it’s original sticker price. Why the drastic decrease in price? Apparently, the electric car is not faring well and had not been selling at its original sticker price. Despite high hopes for the vehicle and expected record sales, GM has been essentially slapped in the face at the reluctance of sales.
According to recent reports, it seems that even though electric cars carry a lot of promise and will eventually reduce the carbon footprint that vehicles have on the plant, Americans are still not widely open to the idea of owning electric cars. Perhaps they are wary of the new technology and the inevitable kinks that come along with it or perhaps they are simply turned off by the price tag. Regardless of the reason, they are only accounting for an approximate 3.5% of all automotive sales in the US.
The deals that GM is offering that reduce the price of Chevy Volts includes – dealer incentives – including cash bonuses – low interest financing for buyers and cash discounts for buyers. This means that not only are the consumers getting a discount, but they are getting a discount that is almost 4x the industry standard.
How is GM able to offer such a lucrative discount? At the moment, it seems as though they do not have an option. The Volt is not selling otherwise and they need to move the vehicle to make any income on them. The problem is even further enhanced due to the fact that GM is already losing money on the Volt as it is. Manufacturing the car – which is costly because of the dual engine set up – costs approximately $60,000 to $75,000 per vehicle. In turn, when it hits the dealership, it is only being sold for approximately $40,000 before any discounts are applied.
What does this mean for GM? With a discount of $10,000 per vehicle, GM is no doubt losing money on each and every Volt that is sold. It kind of poses the question of how long can they keep up this deal? Granted, as a business, you want to sell cars and selling them may come at a cost. But with an estimated $30,000 loss on each Chevy Volt that they sell – they might want to start thinking about self-preservation as well.
Oh, and if you were in the market for a hybrid vehicle – this is your opportunity to capitalize. Go forth and buy a Volt!