[CCIE]

I don't know if GM is capable of capping the maximum price that a Chevy dealer can charge for a car, but they should for the Volt. With the low initial production numbers Chevy dealers will be having a field day gouging people with $10K+ over sticker. This is fairly common with hot new cars and is one of the many reasons the whole dealer system is out-of-date. Normally this issue goes away after about 6 months because production ramps up. But it sounds like that process will take much longer with the Volt. So, while everyone is complaining about a $40K MSRP, the actual price you can buy one for will likely be much higher. I hate to see all that extra money go to a middle-man dealer who adds little value.

They should have made the Volt a Saturn so they could set the selling price...

 

[jjski78]

I agree 100%. The price needs to be set by GM. They don't benefit from dealers price gouging, so it should be no big deal to them. I worked for Honda when the S2000 was released. As soon as our first shipments came in, I was told to tear off the sticker, and install a new one the dealer had made. They were charging $20000 more than MSRP! The same thing happened at Plymouth dealerships with the Prowler, and yes, even the PT Cruiser got gouged when it first came out. So please GM, set the price, make this a no-haggle deal, and your customers will come in droves!

 

[Rooster]

In a free market, price = f(demand, supply)

If people are willing to pay $20,000 over sticker to purchase one the first production Volts, then that is what they are worth -- regardless of the MSRP. Why shouldn't the dealers be allowed to charge the market price? Besides, what's to keep people from buying them and reselling them on eBay for $20,000 over MSRP if that is what they demand?

The price will eventually come down when supply increases and the people who are willing and able to pay more than sticker disappear -- as with all the aforementioned cars.

I feel your pain, as I want a Volt too, but I refuse to pay more than the MSRP on principal. I would rather wait.

Here’s some food for thought: If people are willing to pay $20,000 over MSRP for the Volt, that is extremely good news. It means GM has a smash hit with consumers, so they will be incentivized to build as many Volts as the can as fast as they can. So in a perverse way, I hope they do demand $20,000 over MSRP initially...the Nation, in addition to GM, need this concept to be a hit with consumers. Reducing demand is the fastest way to rid our dependency on foreign oil.

 

[ghost_in_the_shell]

This can work in 2 ways...

1.) People will pay their way to the front of the line. Good for business? Yes. Great actually. Once it cools, then we can all get our hands on one.

2.) GM may raise the price if the amount of people willing to pay the premium is significant.
That falls under the new-marketing strategy of " What the market will bear.."

I hope this is not the case.
But demand is a good thing. A very, very good thing.

Dealers charging 20k over sticker? LoL let a fool and his money be parted. I don't really care. There are only so many people like that around.

 

[jjski78]

"There are only so many people like that around"

You'd be surprised just how many people are like that. I'm talking normal, middle class, run of the mill types. My experience with the S2000 launch opened my eyes to how many people we have in this country that are really stupid when it comes to financial management. Every single S2K we got was sold before it hit the lot. We had a waiting list of 18 months, and ALL of them were willing to pay 20k OVER sticker, knowing full well that they were getting hosed. I think the only thing that will save the Volt from this kind of gouging is the fact that it is going to be produced in much larger numbers than the S2k or the Prowler ever were. But I think the gouging may still happen in high demand places like California and the Northeast. Luckily I live in Arkansas where you're not "cool" if you don't drive an F250 Super Duty with the Power Stroke, so methinks the demand here will be pretty tame, and I shouldn't have too much of a problem getting my hands on one. I guess I'm not "cool" according to Arkansas standards, my truck gets almost 30MPG on the highway, and it says Nissan on the tailgate! Anywho, GO VOLT!

 

[CCIE]

I am a fan of free markets with very limited regulation (mostly to control monopolies and cartels).

The point I was trying to make in the original post is that the all-but-useless dealers will be making all the profit by marking-up the Volt beyond MSRP. GM should be making that profit, not the dealers. But, their is probably no way for them to charge a premium initially and then bring down the price after demand subsides. If GM did that they'd have the same situation as Apple did with the iPhone; people who were dumb enough to pay the high initial cost demanded (and oddly enough received) a refund of the difference when the price dropped.

For me, dealers add almost nothing to the selling process beyond filling out paperwork; anyone who goes to buy a car without having done enough online research to know more about it (and their financing options) than the salesperson is asking to get ripped off.

Some people would say that GM owes the dealer network a few cars that they can make crazy profit on. But, I think the dealers should either be happy with normal profit levels, or stop selling GM cars. Most of the GM dealers around me also carry a foreign brand and push those cars anyway. So, GM should look out for itself, just as the dealers have been.

In my opinion all selling should be done through regional sales centers where you can test drive a model and then place your order. For common configurations, enough supply should exist to fill the order in a few days. Warranty repair centers would also be needed, though their should be some flexibility to allow certified local repair shops to complete warranty repairs. None of this will happen anytime soon, but it would be nice...

 

[anvilis]

controlling dealer markups

I agree that GM needs to figure out a way to control dealer markups. If the company can't or chooses not to, then the profit should go to GM, not to the dealers. GM needs the cash. GM will most likely lose money on each vehicle sold, solely for the purpose of making the Volt relatively affordable. If GM doesn't control dealer markups, then the company is essentially handing its dealers $20,000 checks for selling a car that actually sells itself. The benefit passes to the dealer, not to the consumer.

If this starts to happen, GM should just auction off the first production run to the highest bidders.

If we aren't going to benefit from reasonable prices anyway, I would rather see the profits go to GM.