GM planning lower-priced version of 2016 Chevy Volt, report says

The Volt's U.S. sales fell 15 percent in the first quarter. Pictured is the assembly line at the Detroit-Hamtramck plant. Photo credit: BLOOMBERG

UPDATED: 4/9/14 4:22 pm ET - adds link

DETROIT (Reuters) -- Hoping to boost demand for its slow-selling Volt hybrid, Chevrolet is planning to sell two versions of the redesigned 2016 Volt, including a lower-priced model with a smaller battery pack and shorter driving range, supplier sources told Reuters on Tuesday.

A smaller version of the next generation Volt also is being planned by General Motors' Opel unit in Europe, sources last week told Automobilwoche, the German affiliate of Automotive News.

The second-generation Volt is slated to go into production in about 16 months at GM's Detroit-Hamtramck plant, the sources told Reuters.

Chevrolet spokesman Mike Albano declined to comment on the brand's future plans but said: "Volt customers are the happiest customers in the world. We found a formula that works for them, and we're not going to deviate from that formula."

Last year, North America President Mark Reuss said GM could take "thousands of dollars" out of the cost of next-generation Volt.

Chevrolet has sold just 58,158 Volts since the car went on sale 39 months ago, despite price cuts and heavy discounting. In comparison, the best-selling Ford F-series pickup last month sold more than 70,000.

GM on Tuesday said it will spend $384 million to upgrade tooling and equipment at Detroit-Hamtramck, which it said will build the next-generation Volt "and two future products."

Detroit-area suppliers familiar with GM's plans said the future products include a new flagship sedan for Cadillac in late 2015 and a redesigned Buick LaCrosse midsize sedan in spring 2016.

The 2016 Volt, suppliers said, will share its underpinnings with the next-generation Chevrolet Cruze, which is due to begin production in late 2015 or early 2016.

The standard Volt won't deviate dramatically from the current model, which is priced from just under $35,000 and has a driving range of up to 380 miles (610 km), according to Chevrolet.

GM also wants to offer a lower-cost edition, priced from just over $30,000 that would likely have a range of less than 300 miles (480 km), with less equipment, the supplier sources said.

The strategy is similar to the one employed by electric-car maker Tesla Motors Inc., which originally offered its Model S luxury sedan with a choice of three different battery packs at three different price points.

'Entry level Volt'

At just over $30,000, the "entry level" Volt would be one of the least expensive plug-in hybrids in the U.S. market.

The 2014 Toyota Prius Plug-In starts at $30,800, while the 2014 Honda Accord Plug-In Hybrid is priced from $40,570. The 2014 Ford C-Max Energi, also a plug-in hybrid, starts at $33,745.

When the Volt was introduced in late 2010, it was priced at nearly $40,000. With sales running well below GM's expectations, the base price on the 2014 Volt, introduced last August, was slashed by $5,000 to $34,995. Chevrolet dealers also continue to offer discounted lease rates on the car.

The prices do not include a $7,500 federal tax break on the purchase of such vehicles.

Volt's U.S. sales last year fell 2 percent to 23,094. In the first three months this year, Volt sales dropped 15 percent to 3,606.

Opel electrifies dealers

Meanwhile, Opel is planning a small-car offensive and a new car with electric drive. Sales chief Peter Christian Küspert disclosed the developments at a recent meeting with German Opel dealers.

“His talk was really electrifying,” a participant said.

Sources told Automobilwoche that Küspert announced a purely electrically driven car code-named “BEV” for 2016/2017 that will be significantly smaller and more affordable than the Volt's sister, the Ampera.

Küspert said alternative powertrains are indispensable for Opel and other automakers to meet the tighter CO2 standards that take effect in 2021.

In 2015, Opel will bring out a new subcompact (code-name “City”). It is expected to cost less than 10,000 euros ($13,800) and attract buyers interested in the VW Up along with regular Chevrolet customers. That GM brand is pulling back from volume business in Europe.

This fall, Opel will introduce the Corsa’s fifth generation. Based on current planning, sales will begin at the start of 2015. At the meeting, Küspert described Corsa V’s completely redesigned interior as “almost revolutionary.”

Opel’s continued growth in key European markets, including Germany, has gratified its management. Russia and Turkey are strategic growth markets in Opel CEO Karl-Thomas Neumann’s “Drive! 2022” 10-year plan.

Opel declined to comment for the report.

Henning Krogh of 
Automobilwoche contributed to this report, translated into English.

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