Cutting the Cost: GM may take a hit on the price of hybrid systems to sell more units

[cwerdna]

http://www.autoweek.com/apps/pbcs.dll/arti...1024/LATESTNEWS

"General Motors might absorb some costs of a Two Mode hybrid transmission in its full-sized trucks to make the technology affordable to consumers, product chief Bob Lutz says.

The automaker plans to have at least three hybrid transmissions and offer as many as a dozen hybrid models in the next few years. The Two Mode system, which has two electric motors that assist the engine, would be the premium system, Lutz said.

The cost of that system is more than $10,000, sources close to the program say...."

[fan-atic]

So GM is expecting to offer three systems. The first two are the so-called Hollow hybrids. The third is their two mode system, which is a real hybrid. As a $10,000 option, their sales will be close to zip, especially selling to their traditional customer base. Compare that to Toyota, which expects their hybrids to cost the same as traditional ICE cars by 2010.

[TonyPSchaefer]

As a $10,000 option, their sales will be close to zip, especially selling to their traditional customer base. [/b]

Yes, but remember that it's not always about making money and sales figures.

Once they make it available but nobody buys it, they can rightfully say, "hey, what do you want? We offered the hybrid option to the public but no one was buying." They'll never mention the cost and negligible cost/fuel savings for the consumer. That part doesn't matter; what matters is that they offered it, no one bought it and therefore the public clearly isn't interested.

You attempted to apply logic to marketing and public relations.
Make sure it doesn't happen again.

[Marlin]

<div class='quotetop'>QUOTE(TonyPSchaefer @ Jul 11 2007, 09:05 AM) [snapback]476739[/snapback]</div>

Yes, but remember that it's not always about making money and sales figures.

Once they make it available but nobody buys it, they can rightfully say, "hey, what do you want? We offered the hybrid option to the public but no one was buying." They'll never mention the cost and negligible cost/fuel savings for the consumer. That part doesn't matter; what matters is that they offered it, no one bought it and therefore the public clearly isn't interested.

You attempted to apply logic to marketing and public relations.
Make sure it doesn't happen again.
[/b]

I'm guessing that neither you nor fan-atic actually read the article. The whole point of the article was that GM admits that they won't sell many at the full recovery price of $10,000 and are contemplating absorbing some of the cost. In other words, they are considering on selling the option at less than the full recovery cost of $10,000 in order to increase sales of the vehicle.

[darelldd]

<div class='quotetop'>QUOTE(Marlin @ Jul 11 2007, 06:23 AM) [snapback]476745[/snapback]</div>

I'm guessing that neither you nor fan-atic actually read the article. The whole point of the article was that GM admits that they won't sell many at the full recovery price of $10,000 and are contemplating absorbing some of the cost. In other words, they are considering on selling the option at less than the full recovery cost of $10,000 in order to increase sales of the vehicle.
[/b]

Which, as you may recall, was why GM said they'd never go into the hybrid business. GM claimed it was BAD business to have to subsidize your cars to get them to sell - and they accused Toyota of doing this with the Prius, and pointed out that it would come back to bite Toyota in the ass. I think this is what the phrase "eating crow" was invented for.

[Pinto Girl]

Funny how the BAS will give an "11-12% increase in mileage" and the BAS plus will give a "14-15% increase."

Can they really call it that closely? And why put three different systems into the service and parts pipeline?

[fan-atic]

<div class='quotetop'>QUOTE(Marlin @ Jul 11 2007, 08:23 AM) [snapback]476745[/snapback]</div>

I'm guessing that neither you nor fan-atic actually read the article. The whole point of the article was that GM admits that they won't sell many at the full recovery price of $10,000 and are contemplating absorbing some of the cost. In other words, they are considering on selling the option at less than the full recovery cost of $10,000 in order to increase sales of the vehicle.
[/b]

OK, I did read the article but I didn't factor in GM's contribution. Sorry. Let's say GM swallows half the cost. (Fat chance). Then GM customers would have to pony up $5K for the two-mode hybrid option. Same Result: sales would be zip. But yes, there would be a lot of good will generated.

To continue the GM bashing, is anyone else as annoyed as I am that GM has contributed $1000 to the general scholarship fund for every college football game they have sponsored for the last 25 years, AND BRAGS ABOUT IT? That's about 0.01% of their ad budget for college football. Was it Fuji Film that mimiked them for a while by contributing $10K per game?

[hill]

<div class='quotetop'>QUOTE(darelldd @ Jul 11 2007, 12:30 PM) [snapback]476872[/snapback]</div>

Which, as you may recall, was why GM said they'd never go into the hybrid business. GM claimed it was BAD business to have to subsidize your cars to get them to sell - and they accused Toyota of doing this with the Prius, and pointed out that it would come back to bite Toyota in the ass. I think this is what the phrase "eating crow" was invented for.
[/b]

$1,000's in rebates for Hummers, and the rest of their gas chugg'n fleet? Seems like they invented the term subsidized.

Oh, I'm sorry ... rebates are different from being subsidized

[Godiva]

<div class='quotetop'>QUOTE(Pinto Girl @ Jul 11 2007, 12:25 PM) [snapback]476930[/snapback]</div>

And why put three different systems into the service and parts pipeline?
[/b]

Because that's where they make their money...in parts and repairs. Thus an incentive for a more complicated system and more parts.

[Pinto Girl]

<div class='quotetop'>QUOTE(Godiva @ Jul 11 2007, 01:53 PM) [snapback]477012[/snapback]</div>

Because that's where they make their money...in parts and repairs. Thus an incentive for a more complicated system and more parts.
[/b]

Oh...yeah...riiiiiiiiigggghhhhhhhttttt...
:-)

Clearly I do *not* have what it takes to become a rising star in the firmament of GM upper management...