Chevy Volt sales continue to disappoint, causing major GM losses
Although much fanfare surrounded the introduction of the Chevy Volt in 2010, sales have fallen far short of expected projections, and the negative return on investment is costing GM millions, Reuters reports.
The firm spent over $1 billion on technological research and development for the hybrid electric-gasoline car, and in addition to that initial investment, analysts at Munro and Associates estimated that the firm fronts between $20,000 and $32,000 to produce each vehicle. Combining these two figures, they predicted that it costs GM $75,000 to build every Chevy Volt — a car with the sticker price of $39,995.
They then concluded that GM could be losing up to $49,000 for every Chevrolet Volt that they sell.
GM’s losses would be minimized if the Volt was selling well on auto lots, but consumers simply do not seem interested. Only 13,500 Volts have been sold this year, meaning the company is on pace to fall short of the 40,000 GM was hoping to sell in 2012. August saw a pickup in sales, but many of those were two-year leases, some for as low as $199 a month.
The Detroit-Hamtramck plant is set to temporarily halt production this month, the second to do so this year.
GM released a statement on Monday calling these figures “grossly wrong” because they only factor in current sales, and don’t project the numbers over a long-term future of the Volt or potential cars like it. The company did not provide its own figures.
“Every investment in technology that GM makes is designed to have a payoff for our customers, to meet future regulatory requirements and add to the bottom line. The Volt is no different, even if it takes longer to become profitable,” GM posted on its website.