Dashboard Feb-May 2013

That at least sounds like customer cash to me.

 

But, but, just look at the *trend* of Volt sales over the past 2.5 years.

Oh, wait. Never mind.

 

Or YOY for the first 4 months

Take heart, Volt fans. Sales are up 3.3% in the US.
Just don't look at non US sales.

As of a month ago, GM had 9000 Volts in inventory, or about 6 months.
Good 'ole GM. I can always count on them.
Anyway, now that Volt appears to have plateaued at about 1500 sales a month (of which only a fraction are retail and almost all are heavily subsidized in multiple ways,) we can take a look at the Volt story through the lens of GM hopeful hype:

• 25k sales in the US in 2011
• 60k sales in 2012, pushing towards 120k sales
• 360k sales in 2015

They have managed 5% of their 2015 target rate, 30 months into the 4 year plan.

No doubt Toyota is shaking in it's boots.

 

$99 monthly payments with no money down for a 36-month lease isn't too crazy considering how much excess inventory there is still. They have to get them off lots somehow. Of course, it does make you wonder how much those used vehicles will be worth later when the lease expires. By then, the supposed much lower-cost next generation model will be available. That will likely be a problem.

Another problem GM is creating for itself will be perception of increased demand due to all these new leases. The original 36-month leases for $199 with no money down will be entering the used market as the new 2014 models are being delivered. What will GM do to sell both at the same time? The are consequences of discounting one or the other or both.

Today's Volt daily blog states the following as the biggest shortcoming: "Price is too high" and "Interior room is too low". We said that would impair sales long before they even began. We were correct. Both were aspects of design GM didn't put much priority in. Enthusiasts supported that choice, not taking seriously what mainstream consumers look for when making a purchase decision. Now there's an excess of inventory as a result.

GM has the capacity to produce 5,000 Volt per month. Producing less hurts the bottom line. Suspending production entirely due to supply grossly outweighing demand is a major problem. Toyota's flexibility with the Prius platform, allowing the plug-in model to just be a package upgrade, frustrates Volt supporters immensely... hence some of the lashing out we get hear rather than constructive discussion.

It's too bad GM locked themselves into a "40 mile" capacity and such a fast 0-60 time. That greatly reduces the opportunity to adjust. The hope to match consumer expectations to achieve profitable high-volume sales isn't looking good when there are $99 lease offers. Significant change is needed to make the next-generation model successful.

 

Wow, $99 lease for Volt ??

Last week Toyota Sunnyvale site had an ad for $283 / month lease for Prius liftback. I was quoted (well over $300 a month) for pre-paying a Prius Four 3 year lease ... too $$$

btw, one sit in back seat of Volt made deal breaker. There's more room in a Civic.

 

Link ?

I only saw $99 a month with at least $4k down, or $5k down if the customer is not coming off a lease.
Still dumping inventory, but a more accurate portrayal of dumping. If that is CA btw, if might be an attempt to match Honda.

 

Not what the lease deal is, see below.

Your second statement clearly shows you don't understand the auto market. GM will not be selling the off-lease cars, the off-lease cars belong to the lease company (US-Bank or Ally), not GM.
The residual value of the early leases depending on who was doing them was is between 20 and 25K, and realistically they only need to sell them for 15-20K to make decent money on the lease (remember the lease company already claimed the $7500 tax credit when the bought the car.) Used volts on cars.com with 30-40K miles are selling for 24-25K. Heck volts with almost 60K miles are still selling at about 20K, so looks like the lease companies will do okay.

The low lease model for EV and PHEVs is just a slightly different business model, since the fuel costs are so low they are shifting the price/value around a bit as the car.

Yes my first reply on the lease post was slightly off but its still mostly a gimick.

This still does not Match Honda in Cali... 5K down +99/month = 237/month (+ insurance which honda include) and this is a 10K miles per year lease while honda is unlimited miles. Even at 4K (so including lease conquest) its still $210 a month + insurance for 10K miles/year and .25/mile over the 30K miles in the 3 year lease.

And who known, maybe by running full production speed then switching the DAHM line over to all impala or Malabu (it makes both of those as well) GM can reduce the variable costs enough to afford the 4K discounting. Its funny to some some people complain the car is too expensive then complain when they discount it.

Oh and the 1K lease conquest must be from a lease of a non-GM car (so much for some people theory they want to sell Volts to GM buyers).

 

A used vehicle is a used vehicle. Even if GM doesn't lose any money by offloading to a lease company instead, it's still competing for sales, it doesn't just vanish from the market as a whole.

Rather than just explain the situation, you can't resist throwing in the insult. Those constant attacks on people's credibility is why you are going back on ignore. When you are polite, people will listen.

I didn't see the $9,250 fine print from my phone. How is that a good deal? It doesn't seem like it would compel people seeking out low payment opportunities to pounce. It could actually be quite deterrent in some cases. Of course, it doesn't matter anyway. Things like that cannot be part of a long-term business strategy. Basically, we're looking at 2013 as a wash.

2014 is an entirely different matter. At that point, the other choices would have an opportunity to become established. Having a variety of choices puts even more pressure on the ability to just sustain sales, growing them is an even greater challenge.

 

What's your point? My post already laid out the prices at which the leased vehicles need to sell for the lease company to make money (15-20K), and that price point is well below the price at which GM is likely to try to sell 2014s. Most estimates I've seen expect the 2014's to be above or around 30K after 7.5K credit. That is plenty price differential between 3 year old used and its new model. (According to Yahoo Auto the average 3-year used differential is 20-30%, and high MPG cars have a lower differential).

Your statement was factually incorrect but presented as if you were stating it as a fact when you attacked with:

And then your message continued proceeded to bash GM and the volt with other misinformation. As I've stated before, after being far more polite for quite a while: The more aggressively you state misinformation, the more aggressively I'll correct you. My statement was an observation of fact, presented unvarnished in the only way it seems to get through to you. If you don't want to be corrected, then don't spout misinformation. If you don't want agressive responses don't make agressive unsupported or incorrect statements. Ignore, or ignore not. Threatening to ignore me again serves little point. When you are polite and factual maybe I won't end up on your ignore list. Until then I'll correct your agressive misinformation about volt sales or performance wether you choose to ignore or not.

With respect to the impact of off lease cars on potential new car sales provide facts or at least cite evidence for theories.

 

I doubt any of us care whether the GM leasing companies are profiting, although it does raise a question of whether GM has a finger in the leasing too. Before the BK, GM manipulated sales by offering sub-prime loans through it's leasing company.

I read today that most GM cars depreciate to about about 64% msrp by 3 years. The wrinkle in the Volt story is the $7500 tax credit. If the credit had not been present, then market value of about 41*.64 = ~ $26,000 would suggest the Volt is doing as well (or as poorly, depending on your POV) as other GM fleets. If the market comes in below that value it suggests that new car sales will be disproportionately negatively affected by the used market. At least I think so -- I find it difficult to figure this out with confidence. I reason that a used market price below 64% of msrp implies that part of the tax credit is going to the used car buyer.

Current market prices for used Volts is unlikely to be a good indication of what will happen when many more cars enter the secondary market.

addendum: depreciation rates corrected.

 

Here's other CA lease offers for comparison:

$149 Per Month with $2,990 Down, all in stock with MSRP of $39,995 and we have 40 at this payment! 36 Month closed end lease. On approved “s-tier” credit through US Bank. $2,990 down payment plus tax, license, dealer and government fees and first month’s payment due at signing. Tax, license and fees are not included. Includes $4,250 CCR rebate plus $1,000 Competitive Lease Conquest cash². $0 security deposit. 25¢ per mile over 10,000 miles per year. See dealer for details.

$235 Per Month with $0 Down, all in stock with MSRP of $39,995 and we have 40 at this payment! 36 Month closed end lease. On approved “s-tier” credit through US Bank. $0 down payment plus tax, license, dealer and government fees and first month’s payment due at signing. Tax, license and fees are not included. Includes $4,250 CCR rebate plus $1,000 Competitive Lease Conquest cash². $0 security deposit. 25¢ per mile over 10,000 miles per year. See dealer for details.

Rydell Chevrolet | Northridge, Thousand Oaks, Burbank, Pasadena and Glendale Chevrolet dealer | New and used cars in Northridge

 

I wonder how much dealer 'fees' are.

 

Ahh, here it is
Ally Financial, aka GMAC
GM Wants To Make Sure Everyone Can Get A Car Loan - Forbes

 

According to New Cars, Used Cars, Car Reviews | Cars.com there are 9,062 new Volt and 237 new Volt currently available.

The emotionally charged responses to that inventory pile up resembles what we witnessed back when Two-Mode faced its sales challenge. It's just how some people deal with change. The reaction stages of Volt reveal each met with that too.

Doesn't matter. This isn't rocket science. We all know sales much increase. We all know that the goal is to replace traditional vehicles with high-efficiency choices. We all know each automaker not striving to achieve that will face an increasing struggle.

So, the exchanges now are no surprise. Sales speak for themselves in the end anyway... long after this thread is forgotten.

 

Well its probably worth noting that the Volt won Kelly Blue Book's award for best of resale value in the EV segment
Chevy Culture | Chevy nabs five Kelley Blue Book Awards | Chevrolet

Well it was founded as GMAC, but after the crash it was split off.
GM Trust has a non-voting <10% interest.

From wikipidia:
On 24 December 2008, the Federal Reserve accepted then-GMAC's application to become a bank holding company. Ally returned to profitability in 2010, posting a net profit of $1.075 billion for the fiscal year. Ally showed a $2.72 billion profit in 2011 in its auto finance unit but had a $402 million loss at ResCap (its residential loan business)


And of coure it might be worth noting the leases cited above by John1701a were from US Bank.. not Ally.

 

Good point about US Bank

The Forbes article says that pre BK, GM sold 51% of GMAC.
Later both GMAC and GM entered BK and were bailed out, so that as of today (?) both companies are majority owned by the taxpayer. Exactly what that means today for GM meddling in and manipulating the lease market with Ally Financial is beyond my understanding.

 

That was an rather old data then.. While the government was a majority owner of GM at one point, The times just reported that the government stake in GM "has dropped to about 14 percent since the Treasury Department began selling off its remaining shares last year."

 

Not so bad, eh ?

We are way off-topic, but according to this news article the US is owed about $20 Billion, and has some 240 million outstanding shares. Of course that does not include all the semi-hidden subsidies that will never be directly recovered, or the accounting for the toxic dumps that GM gifted to the US taxpayer.

I'll have to check to be sure, but IIRC the US taxpayer poured some $80 Billion USD into the cesspool known as GM. Today I read that GM has about a $7 Billion net value. Considering that GM dumped in BK all it's non-profitable 'assets,' that just does not sound good.