Coda looks for EV-friendly, multiline, franchised dealers
So far, 2 California retailers have signed on to sell the Sedan
It's a truism that electric vehicle makers need to target early-adopter buyers. But Coda Automotive CEO Phil Murtaugh also needs to attract early-adopter dealers.
With its Sedan EV about to hit the market, Murtaugh said, Coda needs "to find dealers who are pro-green, who believe that electric vehicles are coming."
Since Murtaugh's arrival in January 2011, Coda has quietly discarded its plan to sell cars through company-owned stores. Murtaugh, 56, is former head of China operations for General Motors. He said using franchised dealers is a more realistic retail strategy. So far, Coda has signed two EV-friendly dealers in California.
Murtaugh: A better strategy
Murtaugh said Coda is looking for dealers in cities likely to be receptive to EVs. A store will need to sell 50 to 80 cars a month to be viable, he said. The company is not releasing its overall volume target.
"Our markets are cities, not states," Murtaugh said. "For the next several years, I think electric vehicle sales will be focused in cities."
Coda will approach top-performing dealers in target markets. It aims to keep dealer numbers low initially to get to a healthy sales volume per store -- one dealer in the Los Angeles area, for instance.
But Coda is retaining a modified form of its earlier strategy. Murtaugh said the company wants to award 40 franchises in the United States and Canada by the end of the year, but it will also set up company-owned "experience centers" in high-traffic retail areas such as shopping malls.
The key distinction? Coda doesn't plan to sell cars through the experience centers. It will use them to spread the EV gospel and schedule test drives.
"Their purpose is to educate people on electric vehicles," Murtaugh said in a recent interview. "We're not pushing sales out of the centers."
Coda has one experience center open in the Westfield Century City Mall in Los Angeles, where consumers come in with "product specific questions and movement questions," he said. Coda plans to open four more this year: in San Diego, San Francisco, Chicago and the New York-New Jersey area.
Coda's initial retailers are the Marvin K. Brown Auto Center, a multiline dealership in San Diego, and Del Grande Dealer Group, a multiline group in San Jose, Calif. The San Diego store is scheduled to open this month, and the San Jose store follows in March.
A Coda spokeswoman says most dealers will be diversified, which will allow them to survive through the startup period: "The optimum dealer will have multiple points with multiple franchise brands."
Coda is not revealing a total goal for franchises. It will expand beyond its original dealers only when volume permits a second dealer in a market to achieve sufficient sales, the spokeswoman says, and dealers will work under a franchise agreement similar to those of other brands.
Coda appears to have righted itself after several management changes and delays in the retail launch date. Deliveries of the Coda Sedan begin this month, Murtaugh said. The five-passenger Sedan will have a base price of $38,145, including shipping, before the state and federal incentives to buy EVs.
Coda claims an impressive range for the Sedan, with the base model rated at 125 miles. To get 150 miles, customers will pay $40,795, including shipping.
Coda will do final assembly of the Sedan at a plant in Benicia, Calif., in the San Francisco area. The body and battery of the Sedan are manufactured in China by a small automaker, Hafei Motor Co. Coda is producing its batteries through a China-based joint-venture with Lishen Power Battery.
In August, Coda signed an EV-development deal with Chinese automaker Great Wall Motor Co. that could produce additional Coda vehicles for sale in the United States. The spokeswoman says Coda does plan to add to its lineup but is not releasing details.
Murtaugh also said cars are one of three business lines for Coda; the others are battery management systems and electric drivetrains.
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