MIKE COLIAS

Dealer cash juices Volt sales boom

Mike Colias covers General Motors for Automotive NewsMike Colias covers General Motors for Automotive News
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DETROIT -- The record month for Chevrolet Volt sales in August surely pleased General Motors brass, green-car believers and perhaps even the Obama administration.

But the folks at Ourisman Rockmont Chevrolet in Rockville, Md., likely are even happier.

The Washington-area dealership hauled in nearly $100,000 in incentive money from a stair-step program that GM ran for the Volt over the summer.

The promise of all that cash motivated Ourisman's staff to sell 33 Volts in July and August -- vs. just seven during the first six months of the year.

Some quick background: Stair-step programs pay dealers escalating bonuses as they hit factory-set sales targets. Under the Volt program, dealers who tripled their target were paid $2,500 for every Volt they sold.

Ourisman had little trouble breezing past its July-August bogey of seven Volt sales.

Under GM's stair-step program, dealers who tripled their target were paid $2,500 for every Volt they sold.

"With that kind of money, we could aggressively price the car," the dealership's general manager, Dug Dugger, says.

The store advertised the Volt at $5,000 off the sticker price. Kick in $9,500 in federal and Maryland tax credits, and the plug-in hybrids were going out the door in the mid-$20,000s.

Other factors also helped. About half of Dugger's customers snapped up a special $249-per-month, 24-month lease deal. And gasoline prices were flirting with 4 bucks a gallon.

Now, cynics will point to the incentive program as a desperation play by GM to boost Volt sales.

I see it differently.

Volt owners love the car, more so than owners of other vehicles love theirs, according to a December Consumer Reports survey. And for most Volt owners, the car is the only reason they stepped foot inside a Chevy store.

For GM execs, it's a maddening reality. They believe the Volt is a winner, but the big price tag keeps buyers away.

There's a technology barrier, too. I've found that even auto industry insiders still don't understand the car's extended-range technology, which allows them to drive as many as 38 miles in full electric mode before a small gasoline generator kicks on to power the car's electric motor.

So, here are two incentive plays -- a dealer stair-step and cheap lease -- that ease both of those problems. It puts the car within financial reach for many. And it lets them experience the technology that has current Volt owners bragging to their neighbors.

GM already is losing a bunch of money on the Volt, regardless of the sales total. I don't think it's a bad move for GM to lose a little more to help build its most fervent customer base.

You can reach Mike Colias at mcolias@crain.com.

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