It looks like General Motors is attempting to make up for the money it loses on every Chevy Volt in volume as August sales, spurred by recent price cuts, reached an all-time high of 3,351. The fact that the car has been on the market for about three years and initial much-hyped proclamations from GM would have put sales at 20,000 per month by now goes unrecognized by those that think 3,351 vehicles is a lot of cars to sell in a month. To put the sales in perspective, it took Toyota about 2 ½ days to sell that many Camrys with August sales coming in at 44,731. Fortunately for taxpayers, Volt sales are nowhere near those figures. The 3,351 Volt sales came at the expense of over $25 million dollars of federal subsidies.
The auto industry, including Detroit manufacturers, reported strong sales numbers for the month of August. Sales for the industry rang in at pre-recession levels hitting over 16 million units on an annualized basis. While General Motors got its fair share of the wealth, one unusual tactic to drive sales stands out. That is the use of "stair-step" incentives which are paid to dealerships in the month following the reported sales.
Another fiscal quarter has passed and if you consume most of the mainstream and/or pro-renewable energy media, it’s been another consecutive financial smashing success for luxury plug-in maker Tesla Automotive.
That is, if you don’t subtract the buyer’s federal tax credit for each vehicle, or the California emission credits sales scheme, or state tax credits and incentives, or subsidies for battery manufacturers. Also, it’s great for Tesla and CEO Elon Musk if you disregard Generally Accepted Accounting Principles.
If you can swallow all that government market distortion, taxpayer largess and books-cooking, Tesla’s Model S is finally taking off!
The Chevy Volt madness continued this week with General Motors announcing that consumers will see a $5,000 decrease in the price of President Obama's favorite green wonder-car. Sales of the Volt have been dismal, with most consumers refusing to be as smitten with the car as the President and the few enthusiastic green ideologues who seemed to believe that spending approximately $20,000 more for a car (over a gas-powered rival) that can save them about $3 a day in gas makes sense. What seems to go unrecognized is the fact that the price cut comes at the expense of GM shareholders, not to mention the costs to American taxpayers.
The US Chamber of Commerce's "On the Road with Free Enterprise" tour has quietly entered its second month. The main story currently on the "Free Enterprise" website is a piece titled "First Ever Sushi Tech Combats Fish Fraud." The fact that General Motors is hypocritically co-sponsoring a free enterprise tour might bring to mind the words fishy and fraud as well.
"Beneath the deep purple cuts of healthy tuna and the smell of fresh wasabi, there lies a sushi underbelly in America that will make your stomach turn," reads the first line of the all-important "fish fraud" story. Likewise, GM's anti-free enterprise bailout process exhibited an underbelly of political cronyism that turned the stomach of those (like GM bondholders and Delphi non-union retirees) who saw there rights subordinated to the politically-favored UAW.
It appears that there is no end in sight to the Obama Administration's costly quest to electrify America's auto fleet, despite the recent flurry of reports that continue to confirm that the benefits of electric vehicles (EVs) are practically nonexistent in comparison to the costs. One of these reports even came from Obama's own NHTSA (National Highway Traffic Safety Administration) panel which downplayed the importance of EVs and claimed that electric cars will only need to account for between one and three percent of car manufacturer's product portfolios by 2025 for lofty government EPA requirements to be met.
General Motors has announced a $4,000 rebate (or $3,000 and a four year, zero interest loan from government-owned Ally Financial) on the slow-selling Chevy Volt. The company had a choice regarding how to deal with an excess supply of Volts that is growing faster than demand. GM could have, once again, temporarily halted production until inventory (currently at about a 6 month supply) came down to reasonable levels. It instead chooses to lose more millions of dollars by spending on incentives designed to manufacture demand that otherwise is practically nonexistent.
A recent search for new Chevy Volts on cars.com unearthed 9,254 vehicles currently at dealerships for sale. There were another 258 late-model, used Volts available. About half of those had less than 5,000 miles on them. Considering the abysmal sales rate for the self-proclaimed electric wonder-car (1,306 in April for those keeping track), the unofficial inventory numbers point to about a seven month supply of Volts available. Ideal inventory levels are considered to be in the two month range. It may be near time for General Motors to halt production, yet again, for the floundering Volt.
Great news for consumers who are considering buying General Motors' green wonder car, the Chevy Volt. I know how excited those environmentally conscientious Volt enthusiasts can get, but a little patience can pay off big time if potential buyers hold off for a year or so on their purchase. According to GM CEO Dan Akerson and following another dismal month of Volt sales (1,306 in April), the car that defies logic will soon be available for up to $10,000 less money. The good news extends to shareholders of GM as the next generation of the Volt will supposedly be profitable for the company. So, as we say prepare to say goodbye to the current generation of the obsolescent Volt, let's take a trip down memory lane to review how past promises for the car panned out.
Earlier this year, I reviewed General Motors' first quarter earnings report and annual results. My take-away from the report was that GM relied upon shady accounting techniques and a build-up of US dealer inventories to produce some rosy-looking results. Channel stuffing to the tune of an over 20% increase in inventory from year end 2011 provided for GM's revenue growth. The trend continues as GM has further pumped-up inventory for quarter one.