GM is loosing money

Posted on Wednesday, 12 September 2012 , 12:09:48 byEmil

Filed under gmamericansalesvoltchevroletpricingGMAmericanPricingChevrolet

GM is loosing money


Everything seems to work just fine on the street of General Motors. For example, the Chevrolet Volt has a starting price of $39.995, but despite of the high price, the carmaker managed to sell it quite well. GM sold 2.831 units of the hybrid in August alone. This sound really good, but unfortunately not everything is pink. The development costs, the battery packs and power train, the tooling and the rest, all have a very high price so, in the end, the Volt is not really that price-efficient. According to different manufacturing experts, the development price of each Volt goes up to $89.000. After a simple math, the result indicates the fact that the General motors is loosing $49.000 on each model it sells. Dennis Virag, President of Michigan-based Automotive Consulting Group declared that the Chevrolet Volt a over engineered and also over-priced. This is not all. The American manufacturer lowered the prices for leases. Now, a lot of Volt owners pay around $5.050 annually for a two-period time. This strategy will increase sales for sure, but this only means that the company will loose more with every vehicle. At the beginning, the carmaker had a $1.0-1.2 billion budget. This money did not include sales, marketing or any other corporate costs. The carmaker then divided the amount to 21.500 units the specialists have sold until the end of last month and the result was $89.000. Still, it seems that these numbers are incorrect. The research into battery cells, battery packs, controls, regenerative braking and electric motors and other technologies will be applied across a lot of current and future products. This was the purchasing and manufacturing costs will decrease. GM sees this strategy as a long term investment even if now, they are not really producing any money. In conclusion, we still have no idea on how much a Chevrolet really costs to build.



GM is loosing money image GM is loosing money image
GM is loosing money image GM is loosing money image
GM is loosing money image