Following yesterday's big announcement, readers got a chance to ask Tony DiSalle, product marketing director for the Chevy Volt, some questions about the car's brand new $41,000 price tag ($33,500 after tax rebates). Since DiSalle was here at the Plug-In 2010 conference in San Jose, CA, we thought we'd pose a few of our own.
We started with what, exactly, Chevy dealers will be able to do with this price. After all, the $41,000 is just the manufacturer's suggested retail price. DiSalle said:
General Motors know this about Volt enthusiasts because it has 70,000 of them registered on a list. GM polled them in late spring and discovered 75 percent don't have a single GM product in their household. More recently, GM asked other questions and discovered that around 70 percent intend to buy a Volt and that they're not just along for the ride and to get information.We have messaged to the dealers to do the right thing relative to the price, to not mark it up. At the end of the day, they are independent businesses. That's why you call it manufacturer's suggested retail price. A good dealer will do the right thing for the customer because they want to ensure long-term business and, quite frankly, a lot of these customers haven't been into Chevrolet showrooms. We're also noting that, especially the early adopters will be very vocal about what price the dealer was asking them to pay and that word will spread instantly. Dealers need to know word will get out if they try to gross it up.
Back in March 2009, GM's executive director of global engineering, Bob Kruse, said that the Volt's price would be based, in part, on the price of gas in November 2010. DiSalle would not reveal when the Volt's price was actually decided but did say they considered the price of oil played a role. "We comprehended every value we could think of. Was that a determining factor? No, it wasn't," he said.
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We were also curious about how much money the first-gen Volt will lose, since GM had been quite clear in the past that losing money was a reality (see here and here), but DiSalle didn't seem to agree and wouldn't say definitively that it would or wouldn't. Instead, he said:
Did GM set the price at $41k knowing that a lot of government orders would come in and take care of most of the initial 10,000 units that will be built by the end of 2011? No, said DiSalle:I'm not aware of GM saying that the first-generation will lose money. Certainly, we have every intention within the life cycle to make money. ... We're not going to comment on the profitability, specifically.
DiSalle wouldn't give us a percentage of how many government sales there would be in the first year, just that, "The government business that we have for the initial model year is minimal."Our primary emphasis is to get the vast majority, as many as possible, into the hands of retail customers. We do have some fleet volume, some government volume, but it's not even close to being the majority.
Finally, DiSalle said that the $41,000 price tag was meant to not be a huge surprise:
Number one, the integrity that we've already created the expectation that the car would be priced somewhere around $40,000. So from an MSRP standpoint, that's been out in the public expectation for quite some time. So, in other words, we delivered on what the expectation was. What we are seeing already is a pretty strong propensity for people to really like the lease program. That was an option to position the vehicle as accessible. It gives people an opportunity to come in at $350 a month, $2,500 down for a 36-month lease and what we've seen already is a favorable response to that lease option.
The first year is going to be an interesting year, because you have a lot of people who have been waiting for this car. A lot of early adopters are wealthy, a lot of early adopters will pay cash and just want to keep the car, which is fantastic. We also have a buy option at the end of the lease. A couple of years into it, I would think we'd see the majority of the business being leases. This year, it's really hard to tell.