Dealers turning up noses at the Chevy Volt?

Published On: Jan 23 2012 06:23:44 PM EST   Updated On: Jan 23 2012 06:55:02 PM EST
Rod Meloni - more 4 your money

It’s a story getting national headlines.

Chevy dealers are in fact telling General Motors no thanks to more of the plug in electric cars in some parts of the country.

One of those dealers is Brett Hedrick of Clovis, California.

On Monday, he told Local 4 News, “In the last two months I’ve turned down six [Volts] because having two on the lot is adequate right now because neither is sold.”

Now, he is not turning up his nose because he does not like the car, he LOVES the Volt. He’s just not willing to spend the money to keep more than the two he has on his lot in this economy.

“It’s all about supply and demand. We sold 10 Volts last year and I have two on the way. So it’s not like me to overstock things. I’m just trying to manage my inventory and other dealers are trying to do that.”

Hedrick is right.

GM Spokesperson Rob Peterson on Monday admitted the company is seeing pockets around the country where the Volt is not getting lots of orders. He said there are a number of reasons.

In California, he says, GM is looking to send a special Volt that lives up to California’s higher emissions standards so the car can ride in the HOV [car pool] lanes and those vehicles won’t get shipped until next month. Considering California accounts for 30 percent of the Volt’s sales that’s a problem. Yet, Peterson admits the Volt battery fire/test conducted by the National Highway Traffic Safety Administration gave potential buyers jitters. GM is going to work on helping them feel better about the Volt’s safety, which the feds themselves admit is now top notch. But problems like these can send a shockwave through the marketplace and give buyers reasons to look elsewhere when buying time comes.

Yes, GM’s explanation is plausible. But there is something else at play here that GM will have to fight mightily to change as it pertains to the Volt. Pike Research of Boulder, Colorado does an annual survey of potential customers to gauge their enthusiasm for plug in electric cars. In 2009 its survey turned up encouraging results with 48 percent highly interested in buying one.

In 2010, interest slipped four points to 44 percent and the survey just completed last month shows interest waning farther, with only 40 percent of those polled highly interested. This is a trend that will not help the green car agenda. No matter how this gets sliced, if the customer doesn’t want green cars, or plug in electrics they become a very expensive gamble that did not pay off.

The car companies now find themselves between a rock and a hard place considering the Obama Administration is in the end game of forcing 54.5 mile per gallon fuel efficiency standards on everyone. In order to make it over that bar that the National Auto Dealers have admitted is exceedingly difficult to clear, the car companies will have to have plug in electrics on every lot. This is the ultimate clash in the green car world. If the customer doesn’t want it, and the federal government insists on it, what are the car companies to do? They may have only one recourse; force dealers to take Volts and other plug in hybrids on their way to market.

As it stands right now, GM is NOT forcing Volts on dealers. But there is concern here in metro Detroit is the Detroit/Hamtramck Pole town assembly plant. This is one of a couple of GM plants churning out Volts and any production slow down could severely affect Michigan’s unemployment rate.

Last year GM built 10,000 Volts there. GM sold just less than 8000.

This year GM plans to add a shift and make 60,000 Volts. The year’s production is now under way, but if customer interest doesn’t improve here soon we’re likely to see slowed production and Rob Peterson said as much, “We have the capacity to build 60,000 units globally this year. We will build to meet demand. We believe the market is coming around and we will have to weather a bit of a storm.”

Yes, GM will have to weather a storm, the question is whether it is immediate or long term and government mandated. This is a clear example where CAFÉ standards [government fuel efficiency rules] have never worked and there is no reason to believe they will in the future.