GM Unplugs First Generation Volt – Wall Street Journal

Posted: Thursday, April 09, 2015

General Motors aims to address shortcomings in marketing and sales with its second-generation Volt.

General Motors Co. will halt production of the Chevrolet Volt electric car for the summer to whittle down about seven months of unsold inventory and smooth the way for the next generation of the plug-in hybrid sedan.

The first Volt went on sale in 2010 with high expectations, but sales have been lackluster amid low gasoline prices and the release of more capable electric models from competitors. GM has sold about 70,000 Volts to date, far below initial company forecasts.

Production of the current model, which costs $34,000 and up before federal tax credits, will halt early next month, the Detroit auto maker has said. It will be replaced by a 2016 model with a sleeker design and up to 50 miles range on an electric charge. That second generation Volt will go into production at the end of the summer.

The production hiatus comes after a first quarter in which sales fell well behind Nissan Motor Co.’s Leaf electric car in the U.S. GM sold 1,874 Volts during the three-month period, equivalent to the number of Silverado pickups sold in a day, and in contrast to Nissan’s 4,085 Leaf sales. Volt stocks are enough to last 210 days, or until November, at their March sales pace, according to researcher Autodata Corp. Car makers generally like to have about 60 days of inventory at dealers.

Reinvigorating consumer interest in the Volt, a car that has a battery and a small gasoline motor, is a top priority for GM as it prepares to release its fully-electric Bolt sedan, say analysts. Volt development consumed more than a billion dollars but has failed to generate a fraction of the buzz that Tesla Motors Inc. has with its pricier Model S luxury electric car or Toyota Motor Corp. with its Prius family.

Pam Fletcher, GM’s chief electric-vehicle engineer, says the auto maker wants its coming 2016 Volt to be viewed more as a normal car and less of a specialty vehicle. “In this case, ‘mainstream’ is not a bad word,” she said in a recent interview.

Chevrolet executives have kept in close contact with initial Volt buyers, polling them on issues spanning quality to performance to design. One key thing it learned, “People said they didn’t want a science experiment,” Ms. Fletcher said.

Lyle Dennis, a New York neurologist who became a popular Volt advocate via his independent blog, swapped his Volt (No. 8 off the assembly line) after a year for a Ford C-Max hybrid that could better accommodate his family of five.

Mr. Dennis, in a recent interview, said he plans to buy a 2016 Volt, which has a larger interior.

The marketing plan for the next generation Volt is still coming together said Chevrolet Car Marketing Director Steve Majoros. GM plans to address the confusion around a battery-powered car that has a gasoline engine. Dealers will get “significant marketing support” for the 2016 model. “We will be out publicly and big,” he added.

When someone thinks of an electric vehicle, they don’t think of Chevrolet; they think Toyota or Tesla.

—Jamaal McCoy, Findlay Chevrolet general manager

The strategy will include better educating consumers through social media and getting dealer sales staff more inspired to sell the car. With gasoline near $2 a gallon, most Chevrolet dealerships today are focusing on selling higher-margin trucks and sport-utility vehicles, he said. Less popular and profitable small cars have dropped to the bottom of dealers’ priority list.

Brett Hedrick, owner of Hedrick’s Chevrolet in Clovis, Calif., said he is in favor of greater support from GM for Volt sales, but said electric cars won’t catch on until they make financial sense. When gas prices went down consumers weren’t “as conscious about conserving,” he said.

Mr. Hedrick said his current challenge is selling the Volt inventory on his lot before the new model arrives—something he hopes GM will support.

Chelsea Sexton, a Los Angeles-based electric car advocate, said while GM made a lot of waves when it first launched Volt, it lost soon ground to other auto makers who released fully electric vehicles.

She said GM lately has reached out less often to enthusiasts, noting talks with herself and others “have largely fallen off…as those conversations fall off, it’s hard to tell where they stand in the long term.”

Dealers say GM has to regain mind share in electric cars. “We just don’t have presence in the space currently,” said Jamaal McCoy, general manager of Findlay Chevrolet in Las Vegas. “When someone thinks of an electric vehicle they don’t think of Chevrolet; they think Toyota or Tesla.”


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