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Chevy Volt

GM loses $49,000 per unit on the Chevy Volt. Gonna make it back on volume.

Submitted by Roanman on Mon, 09/10/2012 - 12:47

 

From Reuters.

Click anywhere below for the entire piece which also mentions layoffs in Hamtramck.

 

Insight: GM's Volt: The ugly math of low sales, high costs

General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn't a good thing for the automaker's bottom line.

 

 

Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.

GM's basic problem is that "the Volt is over-engineered and over-priced," said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

And in a sign that there may be a wider market problem, Nissan, Honda and Mitsubishi have been struggling to sell their electric and hybrid vehicles, though Toyota's Prius models have been in increasing demand.

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.

 

 

I'm thinking that the Indiana State Police Pension Fund wouldn't have been so stupid as to piss away a billion two hundred million on a car that costs $89,000 to build and stickers for $39,900.

Although, you never know.

 

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