I8ABMR

http://green.autoblog.com/2010/08/03...er-msrp-for-v/
Researchers from Edmunds decided to drop their local Chevrolet dealer a line to inquire about staking a claim for one of the first available Volts, and the response was shocking at best and galling at worst. Here's the email, sans names:
Hello *****

Thank you for your online request, as you know the Volt is going to be a very limited production vehicle for the first 2-3 years. Demand is going to far exceed supply for this vehicle, initially our asking price for the Volt is going to be MSRP plus $20,000, we are expecting only receive 9 Volts all of next year.

I will keep you in my customer base for when the Volt comes out and I will contact you with any information as I receive it. We are taking orders right now for the Volt, if you would like more information, please let me know and I will be more than happy to help you. Thank you.

***** *****, Internet Specialist
******* Chevrolet
********, CA
You read that right. A $20k markup over MSRP for a 2011 Chevrolet Volt.

As Edmunds' AutoObserver points out, this email exchange took place before General Motors announced its plans to increase Volt production by 50% for 2011, churning out approximately 45,000 units in its first year. But even with that knowledge, would the unnamed dealer still avoid bilking early adopters? We doubt it.

While it's not clear if any other Chevy dealers plan to follow suit, history would suggest that big markups are likely – the Corvette ZR1 initiated this sort of fervor when it was announced, too. On the flip side of the coin, AO sites a report from GM-Volt.com this past June, in which a GM spokesperson is quoted as saying: "We also aren't expecting our dealers to overcharge anyone for this vehicle, either, and will monitor the situation closely when we launch," adding, "we'll be paying close attention when the vehicle launches and do our best to strongly discourage this kind of behavior, as we always do with any GM-branded vehicle."

GM is allowing Volt buyers to lease the plug-in hybrid for $350 a month (with a $2,500 down payment) when sales begin later this year, so it strikes us as odd that someone would choose to purchase a Volt outright if the dealer would tack on such an astronomical amount to the MSRP. Then again, there's the possibility that dealers might only allow purchases, negating the option to lease.

With so much riding on the Volt's success – from GM's long-term environmental program to the political pressures over the federal bailout – the General better get its dealers in line post-haste. If not, the fallout has the potential to stymie the Volt's success before the first owner takes delivery.

CK6Speed

iTrader: (1)

Bummer. I hope not all the dealers do this. When its time to buy my mom a new car hopefully sometime next year, the Volt was on the list as well as the Camry, Camry Hybrid, Hyundai Sonata, and even the Venza. I was really hoping the Volt would meet all the needs as it appears to do on paper, but no way I'm paying over MSRP. Probably would just get the Sonata.

GS3Tek

iTrader: (8)

that's insane!
a brand new z06/zr1 is understandable but this?

that's 20k in gas money there

eh, give it a couple of months when it's collecting dust and they'll drop the price

Infra

iTrader: (1)

Seems like an odd way of doing it.

If the demand for the car is there - do not give any dealers allotment beyond 1 car as a demo. Allot them a car when someone orders one - thereby forcing the dealer to honor the MSRP.

ABC

Yup, my thoughts exactly.

Fizzboy7

Not surprised. GM has long been known for huge price gouging with new/popular models. The irony is these new models always end up with heavy rebates within a year or two. The Saturn Skyy and Pontiac Solstice are a good examples.

mmarshall

Whether Chevy dealers can charge this kind of mark-up (and get it) will probably depend on how long it takes for the extended-range hybrid Prius to be released, which will have comparable mileage to the Volt. Once the extended-range Prius hits the market, the Volt will have some real competition, and price gouging will stop.

bagwell

there's a sucker born every minute....some will pay it and not even care.

mmarshall

Three things. First of all, GM itself (and most other auto firms) have little or no control over what individual dealerships charge.....dealerships are usually privately-owned enterprises. GM simply builds the vehicles, ships them to the dealers, and charges the dealerships whatever the wholesale price, including freight (minus holdback fees) is...the dealerships take it from there. Second, a few companies, like Scion and the now-discontinued Saturn, require all of their dealerships (per the franchise requirements) to sell at list-price only, plus tax/tags. Third, the Solstice was, as you note, a good example of price-gouging (though a friend of mine bought an early-model at list), but not its sister Saturn Sky, because Saturn required dealerships to sell the Sky, like all of their other products, at list, without mark-ups. So, to get around that, Saturn dealerships sometimes added dealer/manufacturer-approved accessories, which bumped the price up a little....(legally). But actual Saturn price mark-ups, for the vehicle itself, were not allowed.

IS-SV

Three things. GM could take control of what dealers charge, if they wanted to (Saturn is a recently expired example). $20K over list for a Chevy, don't expect to sell many at that markup (they can park them out front with all the Vette's collecting dust out front). Yes, most of us have low expectations of auto dealerships, especially the business as usual practices of GM.

SLegacy99

Well certainly for a car like the Volt, which is already recieving much attention for the cost. GM doesn't need any more negative PR, leading to auto articles discussing the long term pay back of a $60k Volt.

PhilipMSPT

iTrader: (5)

Dealers need to create customer-centralized business strategies.

If they begin their relationship based on ****ing over their customers, they will surely fail miserably.

Joeb427

iTrader: (1)

I'm not surprised dealers will want a premium over sticker.It's done quite often with a new special vehicle.
However,$20K is ridiculous on a $40K car.
The $120K Corvette ZR1 had a $20K over list number when it first came out but a $40K car.....

mmarshall

If you remember, GM did briefly try that with Oldsmobile back in the 1990's, modelled along the Saturn line, and, unlike Saturn with its extremely high customer satisfaction rate, the results were not good. Olds, of course, by then, was already in a downward spiral....and some of their customers were already starting to shift to Buick.


Chevy has been able to get big markups on Corvette Z06/ZR-1 and new Camaro SS models, and Cadillac, to a lesser extent, on the CTS-V, but, in general....you are correct. Most of GM's model lines just doesn't have the supply/demand situation for it.



The "buisness as usual" practices, of course, refer to almost any new, media-hyped car in high demand and short supply.....not just GM or the Volt. Charging big markups for these products is nothing new. We saw it with the Honda CRX in 1984-85, the Mazda Miata in 1989-90, the Plymouth Prowler in 1997-98, the Chrysler PT Cruiser in 2001-2002, the Ford Thunderbird in 2001,
the Nissan 350Z in 2002, the Toyota RAV4 in 1996, the BMW Z8 in 2000, and of course, many other examples. Of course, some dealerships held the line and sold these cars at list...or for a very small markup. They were, obviously, more concerned with customer satisfaction and repeat ownership than quick profits.

mmarshall

I agree. But we routinely saw that in 2001 on 40K Thunderbirds. And people were willing to pay it. I actually watched a lady walk into a dealership in 2001, whip out her checkbook, and drive off in a new 38K T-Bird after paying almost 56K for it.

And early last year, when the Camaro SS came out, on the few that were available, I saw 35-38K models marked up, likewise, into the mid-50s. (In fact, I did a partial, static-review on one, since they weren't allowing test-drives)