Quote:
Originally Posted by jimmy5
Well then the obvious answer should have been not to develop a $40,000+ economy car.
During all of this no one in their right mind should have realistically thought that this car would sell enough at the price they marked it at to turn a profit. I realize the government forced this since they are majority shareholders. But it's a clear example of good thought, terrible execution.
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Do you remember the price of VCRs when they came out? Plasma TVs? Using your logic, nothing innovative would ever be developed. Yes, early adopters pay a lot for technology. There are two main buyers for the Volt right now. The tech savvy early adopters and the save the planet crowd. There's also more than a few who are willing to pay a premium to drive in the HOV lanes in CA. All three groups are willing to pay a premium now. Is it high volume, no. GM knows that. However, early adopters subsidize the development of technology so eventually the price comes down over time for the rest of us. The same thing that happened with VCRs and flat screen TVs will happen with the Volt as the technology is used in other vehicle platforms.
As for those comparing the technology of the Volt and the Prius...the Volt is to Prius as iPhone4s is to the basic flip phone from 10 years ago that you can still buy today. Both phones had their moment in the sun as the newest and best and both still perform the same basic function. They place phone calls. However, the iPhone does a lot more. If you would like to buy a flip phone, it will still do the job and definitely cost a lot less than the iPhone. However, if everything else the iPhone does is important to you, you will pay more for it. It all depends on the consumer. Despite the fact that they perform the same basic function and are roughly the same size, the buyer for a $20k Corolla is not the same as the buyer for a $40k plus Volt. That's Marketing 101.
Yes, the laws of economics still apply. Lower prices bring higher volume, but lower prices don't necessarily bring lower costs. The Volt is priced commensurate with it's technology at a price GM thinks can generate the volume it needs to support the business case to build it as well as turn a profit on each one. Although I'm sure GM would like to sell Volt in high volume, I'm also sure GM never banked on it. They have a car called the Cruze that already does that job very well. If a person is only looking for commodity transportation, the Volt is not the car for them as there are many choices that perform the same basic function at a lower price. However, comparing the Volt to those cars right now is truly apples and oranges.
As for your comment on the government "forcing this" as a shareholder, the Volt was in development as a product program well before the government intervened to save GM. It was always a technological exercise, not a political one...