GM is NOT losing Money on the Volt

[flacaltenn]

Wow you really just made a comparison between Volt and Corvette sales.

Was waiting for your detail on how Volt is an epic fail, despite

A) Strong critical acclaim
B) Strong customer satisfaction scores
C) Month to month sales increases

Lord I hate to do this -- but it's killing me not to respond..

The limited edition StarTrek official Crew uniform -- had "strong customer satisfaction scores". That doesn't have Tommy Bahama shaking in his boots..

"Strong critical acclaim" from industry flakkers doesn't equal product success or longevity. See RIM and it's BlackBerry.

When you have 4200 Chevy showrooms just in the USA, numbers per month like 2000 just don't form "sales increases". GE pledged to buy 1000 or so alone. Of course, he's the Prez's jobs czar and chief suck-up for tax breaks..

But yeah --- there's always the possibility that the glass is INDEED half full...

 

[martinjlm]

Wow you really just made a comparison between Volt and Corvette sales.

Was waiting for your detail on how Volt is an epic fail, despite

A) Strong critical acclaim
B) Strong customer satisfaction scores
C) Month to month sales increases

Lord I hate to do this -- but it's killing me not to respond..

The limited edition StarTrek official Crew uniform -- had "strong customer satisfaction scores". That doesn't have Tommy Bahama shaking in his boots..

"Strong critical acclaim" from industry flakkers doesn't equal product success or longevity. See RIM and it's BlackBerry.

When you have 4200 Chevy showrooms just in the USA, numbers per month like 2000 just don't form "sales increases". GE pledged to buy 1000 or so alone. Of course, he's the Prez's jobs czar and chief suck-up for tax breaks..

But yeah --- there's always the possibility that the glass is INDEED half full...

Here's the thing.....if any one of those "flakkers" had said "Volt Sucks" it would be draped all over this board like a banner. But when all of them espouse the benefits of the car en masse then suddenly they are not credible? And Consumer Reports and Popular Mechanics in particular are not auto industry publications. Consumer Reports does heavily influence what cars people buy...as well as refrigerators, flat screen TVs and on and on. I would not call them industry flakkers, but instead disinterested third parties.

As far as the number of Chevrolet showrooms per # of vehicles sold. That's a pretty fair point. But this early in the car's life, being such a different car, I would not expect dealers to average one Volt sale a month. That would be closer to the 60,000 per year that Dan Akerson set as an aggressive target. Typically a car program is considered "mainstream" at 30,000 sales per year, which was GM's original target for Volt sales. This year will probably see 25,000. Probably hit 30,000 in 2013.

As for GE, they have committed to buying 25,000 electric vehicles by 2015, of which 15,000 will be Chevrolet Volts, 10,000 will be other products. Fifteen thousand over 4 years is about 3,750 per year, along with 2,500 per year of other electric vehicles. So that's 3,750 out of roughly 25-30,000 sold per year.

A company that supports development of electric infrastructure buying electric vehicles.....now there's a sign of the apocalypse.

 

[Trajan]

where is the tax payers cost of 21,500 sold with that $7500 rebate calculated?

thats $161.250.000.... they could have bought 4134 of them at 39K per free and clear. That’s just about the first 3 months worth of sales, and their line has been stopped twice while labor and material costs are still borne.


as far as 'sales' well, channel stuffing hello? And $200 leases on a care that retails for 40K? seriously? and a car with a low resale value? 5 will get you ten that any balloon to own payments will be severely lowered to save embarrassment of taking them back.


Color us unsurprised by this turn of events as Automotive News reports GM is set to idle the plant where it assembles the Chevy Volt for four weeks - starting next month. GM will close its Detroit-Hamtramck plant from Sept 17 to Oct 15 with its 1500 staff being made aware by union reps at the end of last week. The knock-on effect is relatively obvious as the illustrious government-owned auto manufacturer notified suppliers last week and while a GM spokesperson would not confirm the planned shutdown, we couldn't help but raise an eyebrow at the comment that "we continue to match supply and demand" as we note this is the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.

And from Bloomberg:

Sales of the plug-in hybrid sedan haven’t met Chief Executive Officer Dan Akerson’s projections this year. Through July, GM sold 10,666 Volts in the U.S., according to researcher Autodata Corp. Akerson had aimed for sales of 60,000 globally, of which 45,000 would be delivered in the U.S. In June he said sales would probably total between 35,000 and 40,000.


more at;
When Channel-Stuffing Comes Home? GM 'Idles' Volt Production (Again) | ZeroHedge

 

[Trajan]

The most disingenuous thing about this is the claim that GM is "losing money" on each Volt they sell.

They're gaining money on each Volt they sell. R&D is, for the most part, a one-time cost. Each time GM sells a Volt, it'll make the total "cost" of each Volt lower. Eventually, the ratio will even itself out.

That's how the free market works.

uhmmm yes and no, read below

martybegans point is valid, why a Volt if you are in a saturated market with a huge number of choices as the consumer has now, and they are treading water with rock bottom leases (defrayed cost- cutting net profit per vehicle in leases, lower the price point per unit) and even at what GM says they cost to make, (26K the middling number) as sales lag, carried interest on the constant labor and material costs plus eating down as you say the R&D costs, well? How long do you think that will take? that $15bn they still have which WE borrowed and are paying interest on via bonds.....?


GM claims that the actual cost of manufacturing a Volt is somewhere between $20,000 and $32,000 mainly because of the variety of models and features and even Reuters accepted this. The report from Reuters focuses primarily on the total cost and not the marginal cost. The American car maker argues that as it goes on selling more Volts, the average R&D cost per car will come down and higher volumes will help to bring down the component cost and thus bring down the overall cost of production. Plus, the company also believes the $1.2 billion which it has spent on R&D has helped the company to develop a technology which will be invaluable to GM’s future growth. This being the case, it is not correct to assign the full cost of R&D to the Volt’s present model. The company plans to launch a new version of the car sometime in 2015 and even that 2nd generation Volt will have the influence of the current R&D.

So, this clears the confusion regarding the $49K loss per car theory and it seems investors got worried for nothing. Or, were they right? If you ask me, investors were not wrong to be worried about their investment. Just the reason was wrong. Though the company is not actually losing a huge sum on each Volt it sells, there are plenty of other reasons to be worried about the company and its Volt venture.

GM’s argument that the average R&D cost per car and the cost of manufacturing each unit of Volt will come down with rise in volume is logical. But the question is will GM ever be able to sell enough cars to break even with Volt? Like I already mentioned, since December 2010, GM has sold 21,500 units of Volt as against the planned figure of 45,000 units. Because of the high price of the car, Volt sales have not reached the sales levels of Toyota’s (NYSE: TM) Prius. While GM sold 2,831 Volts in August, 2012, Toyota sold more than 20,000 units of Prius and with such high figures Toyota continued to dominate the industry. However, on a positive note, Volt has outsold Ford’s Focus Electric and Nissan’s Leaf in 2012.

Again, the market situation does not seem to be favorable for electric cars as consumers are still not fully ready to migrate to fully electric cars. Due to the low demand of electric cars, the market segment is likely to get saturated pretty fast and thus might not allow GM to sell enough cars to break even. Keeping in mind the $1.2 billion investment made by GM, the company needs to sell around 90,000-110,000 Volts to break even and the figure seems to be a little too high. Again, as new players decide to enter the market, GM’s hold on the space will continue to fall and thus create further problems for the automobile giant to restore the money spent on Volt. Comparatively, small players who haven’t invested in R&D as much as GM will need to sell far fewer cars to break even. Recently, Tesla Motors’ (NASDAQ: TSLA) CEO Elon Musk said that the company just needs to sell 8,000 units of its Model S cars to break even. Tesla has been producing good looking high-quality electric cars and enjoys a good reputation in the space.

more at

Is the Voltage Wrong for this Car Manufacturer? - GM, TSLA, TM - Foolish Blogging Network

 

[martinjlm]

where is the tax payers cost of 21,500 sold with that $7500 rebate calculated?

You would need to the same calculation for every vehicle that is eligible for all or part of a $7,500 tax incentive. Some are built in Japan (Toyota Prius Plug-in Hybrid, Nissan Leaf, Mitsubishi iMiEV), some are built in the US (Ford Focus EV, Ford C-Max Energi, Ford Focus Energi, Tesla Roadster, Tesla S) some are built in Europe (Fisker Karma, Smart EV, BMW i3).

thats $161.250.000.... they could have bought 4134 of them at 39K per free and clear. That’s just about the first 3 months worth of sales, and their line has been stopped twice while labor and material costs are still borne.


as far as 'sales' well, channel stuffing hello? And $200 leases on a care that retails for 40K? seriously? and a car with a low resale value? 5 will get you ten that any balloon to own payments will be severely lowered to save embarrassment of taking them back.

You guys really don't do much research before posting some of this stuff. With respect to resale values......from Hybridcars.com


Could it be that early adapters of the Chevy Volt and Nissan Leaf will not be taking a hit in their car’s resale value for all their willingness to risk buying new electrified automotive technology?

Contrary to early fears that their resale value might not hold a candle to nearest-comparable gasoline cars, this appears to be the case, according to the June NADA Official Used Car Guide

How good are the resale values? Try 95 percent of the tax-credit-adjusted sticker for the 2011 Leaf, and 90 percent for the 2011 Volt.

NADA pegs the 2011 Leaf’s average trade-in value at $23,975. When factoring in the full federal tax credit of $7,500, the Leaf’s net sticker price was figured to be $25,280.

A nearly as good story holds true for the gas-electric Volt. A 2011 Volt has an average trade-in value of $29,325, and when subtracting the $7,500 federal tax credit, its net sticker would have been $32,780.

High residuals driven by high resale values is what makes it possible for an automaker to offer low lease payments. Because the financial institutions recognize they'll get their money back on resale. That is why BMW and Mercedes have such a high percentage of lease vehicles compared to purchase. The high residual values allow the customers to shop for low lease rates for the amount of car they are getting.

Color us unsurprised by this turn of events as Automotive News reports GM is set to idle the plant where it assembles the Chevy Volt for four weeks - starting next month. GM will close its Detroit-Hamtramck plant from Sept 17 to Oct 15 with its 1500 staff being made aware by union reps at the end of last week. The knock-on effect is relatively obvious as the illustrious government-owned auto manufacturer notified suppliers last week and while a GM spokesperson would not confirm the planned shutdown, we couldn't help but raise an eyebrow at the comment that "we continue to match supply and demand" as we note this is the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.

Color me surprised that so many of you who keep posting about this current shutdown take the time to read the full articles pointing out that the shutdown is specifically to get the plant tooled up to also produce the 2014 Impala. Funny there is also no mention of the Malibu, which is also built in that plant, being shutdown at the same time for the same reason. This whole idea of "Channel Stuffing" is simply a matter of building enough cars ahead of the shutdown to keep sales going while the plant is down. Same thing is happening on Silverados and Sierras as the plants that produce them are shutdown to change our to the new design that gets launched next summer. Ditto the Ram 1500 truck which was built ahead so tha the plant could be shut down to prepare for the new 2013 model. Funny none of those get reported.

And from Bloomberg:

Sales of the plug-in hybrid sedan haven’t met Chief Executive Officer Dan Akerson’s projections this year. Through July, GM sold 10,666 Volts in the U.S., according to researcher Autodata Corp. Akerson had aimed for sales of 60,000 globally, of which 45,000 would be delivered in the U.S. In June he said sales would probably total between 35,000 and 40,000.


more at;
When Channel-Stuffing Comes Home? GM 'Idles' Volt Production (Again) | ZeroHedge

Bottom line, GM leadership that I have talked to are pretty happy about the upswing in Volt sales and the off the chart customer satisfaction of owners and lessees. Next time I talk to them I'll have to tell them that you guys don't like the car. Maybe they'll change course then.

 

[flacaltenn]

Was waiting for your detail on how Volt is an epic fail, despite

A) Strong critical acclaim
B) Strong customer satisfaction scores
C) Month to month sales increases

Lord I hate to do this -- but it's killing me not to respond..

The limited edition StarTrek official Crew uniform -- had "strong customer satisfaction scores". That doesn't have Tommy Bahama shaking in his boots..

"Strong critical acclaim" from industry flakkers doesn't equal product success or longevity. See RIM and it's BlackBerry.

When you have 4200 Chevy showrooms just in the USA, numbers per month like 2000 just don't form "sales increases". GE pledged to buy 1000 or so alone. Of course, he's the Prez's jobs czar and chief suck-up for tax breaks..

But yeah --- there's always the possibility that the glass is INDEED half full...

Here's the thing.....if any one of those "flakkers" had said "Volt Sucks" it would be draped all over this board like a banner. But when all of them espouse the benefits of the car en masse then suddenly they are not credible? And Consumer Reports and Popular Mechanics in particular are not auto industry publications. Consumer Reports does heavily influence what cars people buy...as well as refrigerators, flat screen TVs and on and on. I would not call them industry flakkers, but instead disinterested third parties.

As far as the number of Chevrolet showrooms per # of vehicles sold. That's a pretty fair point. But this early in the car's life, being such a different car, I would not expect dealers to average one Volt sale a month. That would be closer to the 60,000 per year that Dan Akerson set as an aggressive target. Typically a car program is considered "mainstream" at 30,000 sales per year, which was GM's original target for Volt sales. This year will probably see 25,000. Probably hit 30,000 in 2013.

As for GE, they have committed to buying 25,000 electric vehicles by 2015, of which 15,000 will be Chevrolet Volts, 10,000 will be other products. Fifteen thousand over 4 years is about 3,750 per year, along with 2,500 per year of other electric vehicles. So that's 3,750 out of roughly 25-30,000 sold per year.

A company that supports development of electric infrastructure buying electric vehicles.....now there's a sign of the apocalypse.

Thanks for having a sense of humor.. As for apocalyptic self-interest of GE, they know a success will mean the lights will dimming all round the country and THAT'S good for business. Not neccessarily good for a country to be "in the pockets" of the 1st folks to propose a solution. Should FUEL CELL electrics come along -- we wouldn't need a total grid makeover and large increases in GE value. Just a few new generators to make hydrogen locally. It's kinda like telling those folks who were pressured into buying squiggly light bulbs that now LEDs are the way to go. And that CFL crap is dangerous and not a good long term solution.

Rather than chastize the awards part of this -- I look at it like Al Gore or Obama winning the Nobel Prize. The prestige is largely institutional and for show. And BACKED by the misleading claims that the EPA allowed when forming "equivalent MPG" figures to amaze and astound the not so astute press corps and the eco-public.

I love the concept of electric drive --- I just don't think we should jump into an infrastructure makeover before we even agree how to keep the lights on NOW TODAY.
So I'm not dissing the Volt engineering. I SENSE -- it's gonna actually POISON the market for future all-electric products tho. Especially if design iterations cut corners in an attempt to lower cost.

 

[martinjlm]

Lord I hate to do this -- but it's killing me not to respond..

The limited edition StarTrek official Crew uniform -- had "strong customer satisfaction scores". That doesn't have Tommy Bahama shaking in his boots..

"Strong critical acclaim" from industry flakkers doesn't equal product success or longevity. See RIM and it's BlackBerry.

When you have 4200 Chevy showrooms just in the USA, numbers per month like 2000 just don't form "sales increases". GE pledged to buy 1000 or so alone. Of course, he's the Prez's jobs czar and chief suck-up for tax breaks..

But yeah --- there's always the possibility that the glass is INDEED half full...

Here's the thing.....if any one of those "flakkers" had said "Volt Sucks" it would be draped all over this board like a banner. But when all of them espouse the benefits of the car en masse then suddenly they are not credible? And Consumer Reports and Popular Mechanics in particular are not auto industry publications. Consumer Reports does heavily influence what cars people buy...as well as refrigerators, flat screen TVs and on and on. I would not call them industry flakkers, but instead disinterested third parties.

As far as the number of Chevrolet showrooms per # of vehicles sold. That's a pretty fair point. But this early in the car's life, being such a different car, I would not expect dealers to average one Volt sale a month. That would be closer to the 60,000 per year that Dan Akerson set as an aggressive target. Typically a car program is considered "mainstream" at 30,000 sales per year, which was GM's original target for Volt sales. This year will probably see 25,000. Probably hit 30,000 in 2013.

As for GE, they have committed to buying 25,000 electric vehicles by 2015, of which 15,000 will be Chevrolet Volts, 10,000 will be other products. Fifteen thousand over 4 years is about 3,750 per year, along with 2,500 per year of other electric vehicles. So that's 3,750 out of roughly 25-30,000 sold per year.

A company that supports development of electric infrastructure buying electric vehicles.....now there's a sign of the apocalypse.

Thanks for having a sense of humor.. As for apocalyptic self-interest of GE, they know a success will mean the lights will dimming all round the country and THAT'S good for business. Not neccessarily good for a country to be "in the pockets" of the 1st folks to propose a solution. Should FUEL CELL electrics come along -- we wouldn't need a total grid makeover and large increases in GE value. Just a few new generators to make hydrogen locally. It's kinda like telling those folks who were pressured into buying squiggly light bulbs that now LEDs are the way to go. And that CFL crap is dangerous and not a good long term solution.

Rather than chastize the awards part of this -- I look at it like Al Gore or Obama winning the Nobel Prize. The prestige is largely institutional and for show. And BACKED by the misleading claims that the EPA allowed when forming "equivalent MPG" figures to amaze and astound the not so astute press corps and the eco-public.

I love the concept of electric drive --- I just don't think we should jump into an infrastructure makeover before we even agree how to keep the lights on NOW TODAY.
So I'm not dissing the Volt engineering. I SENSE -- it's gonna actually POISON the market for future all-electric products tho. Especially if design iterations cut corners in an attempt to lower cost.

I'll only comment on the awards thing. We actually aren't too far apart on the other stuff.

I understand what you say about the obligatory who's new / who's in charge sort of awards. Thing is, with all of the car magazine awards and with Consumer Reports, the candidates are put through rigorous driving and instrumented tests. Posers are weeded out in a hurry. To even make the final field of contestants is an achievement. To take "THE" award is a significant achievement, not just a platitude.

 

[depotoo]

To say R&D is not to be counted in the cost of a product is...well..insane.
Not to mention continued R&D after a product is first produced, especially something as manufactured and complicated as an automobile.
You also have to take into effect the $7,500 subsidy the gov't is giving...which BTW - has not worked.

The R&D is a cost to the company. What a group of people that for some reason want to see the electric car fail are saying that production, labor and material costs to BUILD each car costs $50K more than they are selling it for. That is not the truth! In fact if you take what the production, labor and material cost and you come out with a handsome profit.

That $7,500 subsidy is a tax credit to the consumer who buys the car not to the business! In my opinion money well spend! Gas prices aren't coming down anytime soon. I think a CIC in Romney would get it down a little, but with the global demand for oil increasing every year, gas will still be expensive!

are you out of your mind? Obviously you have never owned your own business .

 

[Trajan]

where is the tax payers cost of 21,500 sold with that $7500 rebate calculated?

You would need to the same calculation for every vehicle that is eligible for all or part of a $7,500 tax incentive. Some are built in Japan (Toyota Prius Plug-in Hybrid, Nissan Leaf, Mitsubishi iMiEV), some are built in the US (Ford Focus EV, Ford C-Max Energi, Ford Focus Energi, Tesla Roadster, Tesla S) some are built in Europe (Fisker Karma, Smart EV, BMW i3).

your point being?

thats $161.250.000.... they could have bought 4134 of them at 39K per free and clear. That’s just about the first 3 months worth of sales, and their line has been stopped twice while labor and material costs are still borne.


as far as 'sales' well, channel stuffing hello? And $200 leases on a care that retails for 40K? seriously? and a car with a low resale value? 5 will get you ten that any balloon to own payments will be severely lowered to save embarrassment of taking them back.

You guys really don't do much research before posting some of this stuff. With respect to resale values......from Hybridcars.com


Could it be that early adapters of the Chevy Volt and Nissan Leaf will not be taking a hit in their car’s resale value for all their willingness to risk buying new electrified automotive technology?

Contrary to early fears that their resale value might not hold a candle to nearest-comparable gasoline cars, this appears to be the case, according to the June NADA Official Used Car Guide

How good are the resale values? Try 95 percent of the tax-credit-adjusted sticker for the 2011 Leaf, and 90 percent for the 2011 Volt.

NADA pegs the 2011 Leaf’s average trade-in value at $23,975. When factoring in the full federal tax credit of $7,500, the Leaf’s net sticker price was figured to be $25,280.

A nearly as good story holds true for the gas-electric Volt. A 2011 Volt has an average trade-in value of $29,325, and when subtracting the $7,500 federal tax credit, its net sticker would have been $32,780.

High residuals driven by high resale values is what makes it possible for an automaker to offer low lease payments. Because the financial institutions recognize they'll get their money back on resale. That is why BMW and Mercedes have such a high percentage of lease vehicles compared to purchase. The high residual values allow the customers to shop for low lease rates for the amount of car they are getting.

this 'calculation' vis a vis the volt is what, in the space of less than 2 years, the verdict is in? seriously? on resale value in/on the used car market?

I think it might be best to wait until you have a sample group worth a darn, until lthere is a an ongoing market where in the volt has had a chance to floats it worth IN that market....I wish you had thought a little first before proposing/posing this flip passage which basically equals hypothetical.

Color us unsurprised by this turn of events as Automotive News reports GM is set to idle the plant where it assembles the Chevy Volt for four weeks - starting next month. GM will close its Detroit-Hamtramck plant from Sept 17 to Oct 15 with its 1500 staff being made aware by union reps at the end of last week. The knock-on effect is relatively obvious as the illustrious government-owned auto manufacturer notified suppliers last week and while a GM spokesperson would not confirm the planned shutdown, we couldn't help but raise an eyebrow at the comment that "we continue to match supply and demand" as we note this is the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.

Color me surprised that so many of you who keep posting about this current shutdown take the time to read the full articles pointing out that the shutdown is specifically to get the plant tooled up to also produce the 2014 Impala. Funny there is also no mention of the Malibu, which is also built in that plant, being shutdown at the same time for the same reason. This whole idea of "Channel Stuffing" is simply a matter of building enough cars ahead of the shutdown to keep sales going while the plant is down. Same thing is happening on Silverados and Sierras as the plants that produce them are shutdown to change our to the new design that gets launched next summer. Ditto the Ram 1500 truck which was built ahead so tha the plant could be shut down to prepare for the new 2013 model. Funny none of those get reported.

I saw that, and?
The roll over of the line to the Impala which is NOT a hybrid or elec. car doesn't help your case...you see that, right?

further, didn't they just use $1.5 Bn last year (summer) to tool that plant for the Volt?


As far as channel stuffing, ah, so this is a good thing now?


and actually yes it was/has been reported, and in fact we discussed this ( below directly) last year when it came up;

GM's "Channel Stuffing" Goes Mainstream
07/05/2011 17:57 -0400


"General Motors Co. stocked Jim Ellis Chevrolet in Atlanta with plenty of Silverado full-size pickups in early 2011, part of a wager on a strong economic recovery. The strategy is backfiring. “We thought that this year would bring back the kind of economic activity that would translate into us selling more trucks,” Mark Frost, the dealership’s general manager, said in a phone interview. “It’s not happening.” Supply of Silverado has ballooned to 6 1/2 months worth at the dealership, a figure Frost, 52, calls “a little scary.” The Detroit-based automaker, 33 percent owned by the U.S. after its 2009 bankruptcy, has 280,000 Silverado and GMC Sierra pickups on dealers’ lots around the country. If sales continue at June’s rate, that would be enough to last until November." Thus begins a story just published by Business Week covering a topic that Zero Hedge has been pounding the table on since last December, and which just hit an all time record for fresh start Government Motors a few days ago - namely the firm's propensity to dump as much inventory as possible on dealer floors. Granted, many have been quick to mock, ridicule and ignore our glaringly obvious findings (especially since these come at a time when the light vehicle sales SAAR is back to a 10 month low, and likely to plunge once the long overdue inventory liquidation finally takes place), although now that the topic of General Motors' "strategy" of overfilling dealer inventory is front page news, it finally may get the overdue respect it deserves, especially since as Jefferies' Peter Nesvold cautions, this is nothing more than new GM reverting to the habits of the old one (the one that filed and needed taxpayer bailouts for a few hundred thousand union workers).

more at-
GM's "Channel Stuffing" Goes Mainstream | ZeroHedge


Or;

GM Back To Its Channel Stuffing Ways
By Bertel Schmitt on April 14, 2012

Indeed, Hyundai-Kia’s supply is the lowest of them all with only 27 days until empty. As indicated by the Detroit 3 number, American makers are generously stocked, but averages can be deceiving.

Ford and Chrysler carry a regulation two month supply on the books.

The absolutely worst of Detroit is GM with a nearly three month supply. Only consolation: Deadman walking Mitsubishi carries two days more. While days to sell are down industry-wide, inventory is increasing on GM lots: From March to April, it took a week longer to move an already sluggish inventory.

GM’s lot queens: Escalade EXT (144 days), Yukon (136 days), Yukon XL (133 days), Sierra (132 days), CTS (124 days), all Cadillac cars (123 days), all Buicks (121 days).

more at-

GM Back To Its Channel Stuffing Ways | The Truth About Cars




annnd

Class Action Lawsuit Filed Against GM For Channel Stuffing

In July 2011, reports began to surface that GM had engaged in an extraordinary inventory build-up. In particular, an article published by Bloomberg on July 5, 2011 revealed that GM may have been unloading excessive inventory on dealers, a practice known as "channel stuffing," in order to create the false impression that GM was recovering and sales and revenues were rising." Luckily, since this is a class action lawsuit, anyone else out there who bought GM on the belief that the company would not engage in precisely the behavior that we have shown month after month to occur, is invited to enjoin the plaintiffs and to sue the company that exists only courtesy of taxpayer generosity (and more importantly, courtesy of labor unions subverting priority rights in bankruptcy, in exchange for presidential votes). Finally, and if nothing else, this lawsuit will certainly force the general co-opted media to pay some more attention to a topic that is quite sensitive for the administration: the business model of the one company that the president is so proud and happy to have saved from the clutches of evil bondholders.

From the lawsuit:

On July 5,2011, Bloomberg published an article revealing that in the months just prior to the IPO and thereafter, GM already was falling into "old, bad habits" by "channel stuffing," a practice whereby excess inventory is "sold" to dealerships so that the manufacturer, in this case, GM, can record those sales on its books, creating the false appearance of revenues, even while those cars remain unsold on dealer lots. The article stated that GM's truck inventory swelled to 122 days worth of average sales whereas, by comparison, GM's less profitable car inventory was limited to 60 to 70 days of average sales, Ford was maintaining only a 79 day inventory on comparable trucks, and GM's truck inventory during the years 2002-2010 had similarly averaged only 78 days of average sales.

The article quoted an analyst from Jefferies & Co. stating that "t's unbelievable that after this huge taxpayer bailout and the bankruptcy that we are right back to where we were." The analyst further stated, "There's no credibility."

more at-
Class Action Lawsuit Filed Against GM For Channel Stuffing

And from Bloomberg:

Sales of the plug-in hybrid sedan haven’t met Chief Executive Officer Dan Akerson’s projections this year. Through July, GM sold 10,666 Volts in the U.S., according to researcher Autodata Corp. Akerson had aimed for sales of 60,000 globally, of which 45,000 would be delivered in the U.S. In June he said sales would probably total between 35,000 and 40,000.


more at;
When Channel-Stuffing Comes Home? GM 'Idles' Volt Production (Again) | ZeroHedge

Bottom line, GM leadership that I have talked to are pretty happy about the upswing in Volt sales and the off the chart customer satisfaction of owners and lessees. Next time I talk to them I'll have to tell them that you guys don't like the car. Maybe they'll change course then.

Let me translate that;

Not a thing has changed in/of the management of GM as to how they wound up as a ward of the government................. and you're proud of that?....wonderful

 

[Quantum Windbag]

Chevy isn’t losing $49,000 on every Volt it sells, for God’s sake | Grist
I’ll let the International Business Times explain what the hell I’m talking about.
General Motors Company loses as much as $49,000 per Chevy Volt it builds, according to one news organization’s report, but the article is not as self-evidently accurate as it may first appear. …
General Motors has sold approximately 21,500 Volts since the gasoline-electric hybrid was introduced in December 2010, and development costs of the high-tech car are estimated at between $1 billion and $1.2 billion by Reuters’ calculations. Production costs for the Volt are estimated at between $20,000 and $32,000, a wide margin to be sure. The Volt retails for a base price of $39,145 (before a federal tax credit of $7,500).
The issue with Reuters’ math, though, is that it only takes into account the 21,500 Volts sold so far, as if GM would never sell another one. If that is taken to be true, then each Volt sold has cost GM around $55,000 in development costs.

Every hater basked in the Volt losing $49K per car, like there were executives of Exxon or something. However, the calculation is well overblown and misguiding. That figure takes into account the $1.2 billion invested to create the technology! Of course putting that R&D dollars used to discover the product is going to create a deficit. HOWEVER, if you take that out of the question: GM nets $7K-19K on each model sold. That is only off the base, add extras and they make more.

Most new like the cell phone, PC etc showed deficits the first year when you considered the R&D costs.

The Volt is a step in the right direction and everyone liberal and conservative should embrace it!

If we take that out of the question we are ignoring the reality that it has to be paid for.

 

[Quantum Windbag]

Chevy isn’t losing $49,000 on every Volt it sells, for God’s sake | Grist
I’ll let the International Business Times explain what the hell I’m talking about.
General Motors Company loses as much as $49,000 per Chevy Volt it builds, according to one news organization’s report, but the article is not as self-evidently accurate as it may first appear. …
General Motors has sold approximately 21,500 Volts since the gasoline-electric hybrid was introduced in December 2010, and development costs of the high-tech car are estimated at between $1 billion and $1.2 billion by Reuters’ calculations. Production costs for the Volt are estimated at between $20,000 and $32,000, a wide margin to be sure. The Volt retails for a base price of $39,145 (before a federal tax credit of $7,500).
The issue with Reuters’ math, though, is that it only takes into account the 21,500 Volts sold so far, as if GM would never sell another one. If that is taken to be true, then each Volt sold has cost GM around $55,000 in development costs.

Every hater basked in the Volt losing $49K per car, like there were executives of Exxon or something. However, the calculation is well overblown and misguiding. That figure takes into account the $1.2 billion invested to create the technology! Of course putting that R&D dollars used to discover the product is going to create a deficit. HOWEVER, if you take that out of the question: GM nets $7K-19K on each model sold. That is only off the base, add extras and they make more.

Most new like the cell phone, PC etc showed deficits the first year when you considered the R&D costs.

The Volt is a step in the right direction and everyone liberal and conservative should embrace it!

Where is your source for a net profit of $7k to $19k per vehicle?

A source would imply that what he is saying is true.

 

[martinjlm]

....

I saw that, and?
The roll over of the line to the Impala which is NOT a hybrid or elec. car doesn't help your case...you see that, right?

further, didn't they just use $1.5 Bn last year (summer) to tool that plant for the Volt?

...

Rather than continue the back and forth on every single point, I'll only address two of them. I will try to do this from a standpoint of giving you a little insight on how the auto industry work, as opposed to a pissing match over who's right and who's wrong.

The way the industry works is that with very few exceptions, the most efficient vehicle assembly plants build multiple types of vehicles and occasionallly switch from vehicles A, B, and C to building vehicles D, E, and F.

Detroit Hamtramck used to build Cadillac DTS, Buick Lucerne, and one other vehicle that I cannot remember and don't feel like looking up. The rid vehicle ended production. Then Lucerne ended production and it's replacement vehicle was set up to be built at a different assembly plant. Then D-Ham was shut down to get it ready for Volt production. Before shutting down, DTS volume was ramped up to build inventory to sell off while the plant was down to add Volt to the plant. I guess you call this "Channel Stuffing". In the industry it's called "managing inventory".

Then the DTS was discontinued and replaced by XTS whic is built at another plant. So Volt was the only vehicle being produced at the plant at that time. That intent was there from the start to put the new design Malibu and the new design Impala in D-Ham so that D-Ham would again have three products in place in order to fully use the capacity. Adding Malibu and now Impala have absolutely no bearing on how successful anybody thinks the Volt is. It is a completion of a plan several years in the making.

As for whether or not GM spent $1.5B recently to tool the Volt. Yes GM spent some amount of money tooling for the Volt (pretty sure it was not $1.5B, but again, don't feel like looking it up). But that's for Volt. Malibu requires its own tooling and fixturing and Impala requires its own tooling and fixturing. Think of a bakery that does cakes, pies, and cookies. Different pans and utensils are required for each. They all wind up in the same oven (or assembly line) but the tools used to get them there are different. Similar scenario for auto plants that make several different models.

Hope that helps your understanding of auto assembly plants. Not just GM plants, ANY company's multi-product assembly plant.

 

[Trajan]

thats all well and good.

I understand chasing the market by tooling for what you hope or see indicators of selling, then there is making the market.

GM tried to make a market for the Volt, would you say it has been successful? I wouldn't, as they will now retool at the Volt final assembly plant, Detroit-Hamtramck, to chase the Impala. Great, but the Impala isn't the mission standard that was advertised for the Green agenda ala the Volt and their predictions for sales etc.

If the volt was all that and a bag of chips, then they would not be decreasing production and changing direction over there to build the Impala QED.

I misspoke, as I cannot find the link I saw for $1.5bn yesterday but found this, it appears that there was $336 mn directly for Detroit-Hamtramck, and a total apparently of $700 mn. for the Volt overall spread across several locations.

GM Invests $336 Million In Detroit-Hamtramck Plant To Build Chevrolet Volt

 

[depotoo]

thats all well and good.

I understand chasing the market by tooling for what you hope or see indicators of selling, then there is making the market.

GM tried to make a market for the Volt, would you say it has been successful? I wouldn't, as they will now retool at the Volt final assembly plant, Detroit-Hamtramck, to chase the Impala. Great, but the Impala isn't the mission standard that was advertised for the Green agenda ala the Volt and their predictions for sales etc.

If the volt was all that and a bag of chips, then they would not be decreasing production and changing direction over there to build the Impala QED.

I misspoke, as I cannot find the link I saw for $1.5bn yesterday but found this, it appears that there was $336 mn directly for Detroit-Hamtramck, and a total apparently of $700 mn. for the Volt overall spread across several locations.

GM Invests $336 Million In Detroit-Hamtramck Plant To Build Chevrolet Volt

here you go (you were close, it is $1.2 according to this article) -

GM's quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs - which will be difficult to bring down until sales increase.

GM's Volt: The ugly math of low sales, high costs - Yahoo! Finance Canada

 

[martinjlm]

thats all well and good.

I understand chasing the market by tooling for what you hope or see indicators of selling, then there is making the market.

GM tried to make a market for the Volt, would you say it has been successful? I wouldn't, as they will now retool at the Volt final assembly plant, Detroit-Hamtramck, to chase the Impala. Great, but the Impala isn't the mission standard that was advertised for the Green agenda ala the Volt and their predictions for sales etc.

If the volt was all that and a bag of chips, then they would not be decreasing production and changing direction over there to build the Impala QED.

I misspoke, as I cannot find the link I saw for $1.5bn yesterday but found this, it appears that there was $336 mn directly for Detroit-Hamtramck, and a total apparently of $700 mn. for the Volt overall spread across several locations.

GM Invests $336 Million In Detroit-Hamtramck Plant To Build Chevrolet Volt

Either you don't get my point, are ignoring my point, or I'm not doing a good job communicating my point. One more try.

Decisions on what vehicles would be produced at D-Ham when were ,
Made before the 1st Volt was rolled off the assembly line. The addition of the Impala to that plant in September / October 2012 was the completion of a decision probably made in 2009. Before the first Volt left D-Ham.

As far as whether GM is pleased with the current market position of the Volt? Absolutely. I've spoken personally with a number of key people involved in the development, engineering, and manufacture of the Volt and they are happy with the rate at which it is moving in the market.

 

[martinjlm]

thats all well and good.

I understand chasing the market by tooling for what you hope or see indicators of selling, then there is making the market.

GM tried to make a market for the Volt, would you say it has been successful? I wouldn't, as they will now retool at the Volt final assembly plant, Detroit-Hamtramck, to chase the Impala. Great, but the Impala isn't the mission standard that was advertised for the Green agenda ala the Volt and their predictions for sales etc.

If the volt was all that and a bag of chips, then they would not be decreasing production and changing direction over there to build the Impala QED.

I misspoke, as I cannot find the link I saw for $1.5bn yesterday but found this, it appears that there was $336 mn directly for Detroit-Hamtramck, and a total apparently of $700 mn. for the Volt overall spread across several locations.

GM Invests $336 Million In Detroit-Hamtramck Plant To Build Chevrolet Volt

here you go (you were close, it is $1.2 according to this article) -

GM's quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs - which will be difficult to bring down until sales increase.

GM's Volt: The ugly math of low sales, high costs - Yahoo! Finance Canada

$1.2B is probably close to accurate for TOTAL PROGRAM COST, but way overstated for PLANT INVESTMENT. More on how the auto industry works.

Total Program Cost includes Engineering costs, costs to build prototypes, cost to build validation vehicles to test important systems and attributes, costs to build and operate regulatory test vehicles (crash tests, emissions tests, fuel economy confirmation vehicles) and a whole bunch of other costs too deep and too detailed to just casually mention here.

Plant Investment is just what it sounds like. Money to prepare the factory to produce that specific vehicle. Most plants produce multiple products so it is sometimes difficult to identify cost for one specific program, but it gets done. Plant Investment includes special equipment, special tools, material handling equipment that moves the parts from storage to the assembly line, investment in painting facilities, etc.

Total program cost is significantly more than Plant Investment. Total Program Cost includes Plant Investment. The $1.2B described in the article quoted is more in line with Total Program Cost.

 

[RGR]

I love the concept of electric drive --- I just don't think we should jump into an infrastructure makeover before we even agree how to keep the lights on NOW TODAY.

Agree on what? The lights are on NOW TODAY. And there isn't any sign that they will be going off anytime soon. What would that have to do with how well the Volt works as electric transport, using local produced, distributed and used fuels?

 

[martinjlm]

Seems to be a bunch of confusion here..

Oh there's no confusion. The volt is an epic fail and the lefties know it. But they have to keep the green agenda going so they just twist the numbers.

Another example of the epic fail that is Volt.....

Chevrolet Volt In September Sets All Time Record For Sales.


General Motors seems to have found the right formula for selling the Chevrolet Volt, as the 40 mile, extended range plug-in once again set a new level of sales during September..

For the month, 2,851 customers made their way into Chevrolet showrooms in the US and left with a new Volt.

Helping to spur sales was the addition of new and improved 2013 model year Volt hitting dealership floors. The 2013 Volt not only features more electric range, but is more fuel efficient than the outgoing 2012s. For 2013 range has been increased by 3 miles to 38 total miles (as rated by the EPA) and overall fuel efficiency has increased to 98 MPGe.


The 4 Drive Modes of the 2013 Volt
The 2013 model year Chevrolet Volt also adds features previously only available on its sister car for Europe, the Opel Ampera. A selectable ‘HOLD‘ feature .

“Passenger cars (including the Volt) have been the launch point for a broad and deep GM product offensive,” said Kurt McNeil, vice president of U.S. sales operations. “Auto sales will continue to be a bright spot for the U.S. economy, which is particularly good news for GM as we walk into an even stronger cadence of new products in 2013 and 2014.”

At the moment, the Volt’s Hamtramck assembly is on hiatus for 4 weeks as GM prepares the factory for the new Chevrolet Impala. The plant is not expected to reopen until the 15th of the month.

Previously, GM stated they had sufficient Volts to satisfy demand for the car until the plant restarts, but some dealerships have said they are currently waiting on more cars to sell.

In a work shortened September, GM produced 1,214 out of their Michigan facility, while also producing 247 Amperas for Europe. To date GM has sold 16,348 Volts, and increase of 320% over 2011 (3,895).

We think with a 9,000 vehicle lead over nearest competition, the Toyota plug-in Prius, it is fair to say that the plug-in champion for 2012 will be the Chevrolet Volt.

 

[RGR]

Another example of the epic fail that is Volt.....

Chevrolet Volt In September Sets All Time Record For Sales.

Curious, have you actually driven one, to comment on its "epic fail" or not? Seems a bit difficult to proclaim it a failure without at least the most basic of familiarity with how it does at its job.

It is like proclaiming that a Pulitzer Prize winning author is an epic fail...because he is short. Methinks using sales figures to determine success or failure is just an excuse to not actually consider what it would be like, supporting the American economy, keeping the production of our transport fuels locally produced and distributed, and telling the big oil companies, "No thanks...I am not suckling at the teat of Big Oil no mo".

 

[Trajan]

thats all well and good.

I understand chasing the market by tooling for what you hope or see indicators of selling, then there is making the market.

GM tried to make a market for the Volt, would you say it has been successful? I wouldn't, as they will now retool at the Volt final assembly plant, Detroit-Hamtramck, to chase the Impala. Great, but the Impala isn't the mission standard that was advertised for the Green agenda ala the Volt and their predictions for sales etc.

If the volt was all that and a bag of chips, then they would not be decreasing production and changing direction over there to build the Impala QED.

I misspoke, as I cannot find the link I saw for $1.5bn yesterday but found this, it appears that there was $336 mn directly for Detroit-Hamtramck, and a total apparently of $700 mn. for the Volt overall spread across several locations.

GM Invests $336 Million In Detroit-Hamtramck Plant To Build Chevrolet Volt

Either you don't get my point, are ignoring my point, or I'm not doing a good job communicating my point. One more try.

Decisions on what vehicles would be produced at D-Ham when were ,
Made before the 1st Volt was rolled off the assembly line. The addition of the Impala to that plant in September / October 2012 was the completion of a decision probably made in 2009. Before the first Volt left D-Ham.

As far as whether GM is pleased with the current market position of the Volt? Absolutely. I've spoken personally with a number of key people involved in the development, engineering, and manufacture of the Volt and they are happy with the rate at which it is moving in the market.

I'll spare you the Reuters take according to Reason mag. and skip to the GM response;

Replies GM:

Reuters’ estimate of the current loss per unit for each Volt sold is grossly wrong, in part because the reporters allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates. The Reuters’ numbers become more wrong with each Volt sold.

more at-
Is GM Losing $50,000 per Volt? - Hit & Run : Reason.com

so, the position is; GM made a decision back in 2009, to pull the volt assembly now in summer of 2012 to go with the impala, but invested 336Mn there, at that plant last summer anyway.

market position? are they selling according to forecasts? No, IF the Volt was selling what they were making with a predictable back log would they still be shifting there to the Impala? Especially in light of future and ongoing competition, tooling costs etc. that would defray the costs of the Volt as the GM response states? And as far as each Volt sold, well, they are channel stuffing and leasing at an extremely low costs to boot....dude....