GM loses almost 50K on each Volt
Mon, 10 Sep 2012 15:22:15 GMT —
A new report says GM heavily subsidizes each Chevy Volt. The gasoline engines for each Volt are made at the GM Flint Engine plant on Bristol Road.Accoring to Reuters, General Motors sold a record number of Chevrolet Volt sedans in August â?? but that probably isn't a good thing for the automaker's bottom line. Nearly two years after the introduction of the plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds. 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.According to the Chicago Tribune, GM disputes the contention, saying Reuters' research "is grossly wrong" and accusing the news agency of bad math. The automaker said the news agency incorrectly "allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates.â??
The report says 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.
For the Reuters story click here: http://news.yahoo.com/insight-gms-volt-ugly-math-low-sales-high-041323264--finance.html
For the Chicago Tribune story: http://www.chicagotribune.com/business/breaking/la-fi-mo-auto-chevrolet-volt-losses-20120910,0,5031317.story?track=rss