GM’s Chevy Volt 'Bait and Switch'
According to a report by the Detroit News, General Motors claims that it now has fewer than 100 Chevy Volts sitting on dealer lots. In addition, only 1 in 9 dealers are offering the vehicles for sale. However, a search for Volt inventory on the cars.com website uncovers 500 new Chevy Volts advertised for sale to the public. This data confirms that GM dealerships are using a version of "bait and switch" to lure consumers into showrooms by advertising Chevy Volts that are not truly available for purchase.
This may not be illegal but I have to believe that most consumers would nonetheless consider the advertising strategy deceptive. Customers are probably most often switched to the lower priced Chevy Cruze. GM continues to operate with a lack of credibility. Marketing strategies included an ad campaign that proclaimed that government loans were repaid in full when that was obviously not the case. The Chevy Volt was presented as an all-electric vehicle when, in fact, even in battery mode the gas engine helps power the vehicle under certain conditions. Mileage claims were made that the vehicle gets 230 MPG, another statement that is inaccurate.
More recently Chevy dealers were caught gaming tax credits on the Volts. And now the evidence of the bait and switch scheme may shed light on why GM would spend so much money hyping the Chevy Volt when sales have been dismal. It seems the true goal was to sell alternative vehicles that might actually be able to make a profit for GM as opposed to selling high quantities of the money losing Volt.
The credibility question for GM extends beyond marketing. I recently wrote about how GM seems to be stuffing inventory channels to goose second quarter earnings. GM seems to walk a fine line on legality. Insiders at Old GM were also given a bye when they sold their GM shares one month prior to a bankruptcy filing that, according to then car czar Steve Rattner, the executives knew about. With friends in high places, like the Obama Administration, it is unlikely that there will be criticism from government officials. The hundreds of millions of dollars spent on television ads may also buy GM some favorable network coverage. The internet has become one of the few places to find criticism of GM.
It will be hard for GM to continue to deceive the public on what they claim to be unbelievably strong demand for the Chevy Volt. My guess is that the next phase of the Volt hoax will be to pump up sales by selling the vehicles to the Obama led government fleet agencies and thousands more to GE, headed by Obama crony, Jeff Immelt. To add insult to injury, GE will most likely benefit from millions of dollars in subsidies provided on the Chevy Volt by the good old American taxpayers who continue to foot the bill for the auto bailouts.
Eventually the truth will come out that the Chevy Volt was not the "game changer" that GM claimed it would be. Some unbiased sources that are helping to expose the weaknesses of the Volt include Consumer Reports, which claimed that the vehicle didn't make a lot of sense, particularly when compared to the Toyota Prius. A more recent report was made by CNNMoney that also points out the strong advantages of the Prius and states, "it is hard to understand the adulation surrounding the Volt." Even UAW and Obama ally Steve Rattner states in his book, Overhaul, that the Volt had "commercial clay feet" and, "The bottom line was that there was no way for the Volt to have a positive impact on GM's finances any time soon."
At least Mr. Rattner was honest with his evaluation of the Chevy Volt. And CNNMoney is correct that it is hard to understand the adulation given the Volt. Is it really just environmentally conscientious idealism and naiveté that is driving the adulation, or is it more likely the political influence and taxpayer supplied bankroll of Government Motors that is behind the hype? I'll place my bet on the latter.
Mark Modica is an NLPC Associate Fellow