GM Hybrids Slow Start in First Quarter
Sales of new General Motors hybrids, including its touted full-sized SUVs, are taking off at a crawl.
GM sold 843 hybrids in the first quarter — 655 of them the Two Mode hybrid versions of its full-sized Chevrolet Tahoe and GMC Yukon SUVs. The rest are mild hybrids: the Saturn Aura Green Line, Saturn Vue Green Line and Chevrolet Malibu Hybrid.
Sales are slow because the Malibu Hybrid and the Two Mode SUVs are just entering the market, says a GM spokesman. “We talked about a model-year volume of 8,000 to 12,000 for the Tahoe and Yukon, and that hasn’t changed,” says GM spokesman Brian Corbett. “Generally hybrid vehicle sales tend to be a little slower initially compared to regular vehicles. We’re expected to increase sales as awareness increases.”
GM has been advertising the Tahoe and Yukon Two Modes since the Super Bowl in February, says Don Butler, executive director of Chevrolet truck advertising.
‘Cutesy’ ads? But analysts say there has been no bang so far. “The marketing for selling hybrids is too soft and squishy,” says Jim Hall, director of industry analysis at 2953 Analytics in suburban Detroit. He says the hybrids are “in a cutesy-pie commercial that doesn’t scream this is the product you need to buy.” For the Two Mode hybrid, GM is using a demonstration vehicle at dealerships for test drives. Customers then must order the vehicle. Butler says it’s a way to gauge where to send inventory. Hall says Americans don’t like to have to order vehicles and wait but says it is a reasonable approach. But Americans’ love affair with hybrids might be waning, says J.D. Power and Associates analyst Jason Rothkop. “We’re seeing a softening in broader interest,” Rothkop says. That’s because of “the gap between the actual fuel economy and claimed fuel economy,” he says. That gap makes it difficult for automakers to maintain price premiums. More green to buy green The price for the mild hybrid system, such as that on a Malibu, is about $3,000 more, Hall says. The starting sticker price on a four-cylinder Aura is $20,695, compared with a Green Line at $24,290. Both prices include shipping. A mild hybrid system cannot drive the vehicle on electric power only. The Two Mode, a full hybrid, is capable of going about 30 mph on electric power. The Chevrolet Tahoe base model starts at $35,530, and the top-end four-wheel-drive Tahoe LT starts at $40,460. The hybrid starts at $50,490. The GMC Yukon starts at $36,245, and the top-end all-wheel-drive Denali starts at $50,380. The hybrid starts at $50,945. All prices include shipping. Because the hybrids also feature specialized equipment such as lightweight body panels and aerodynamic bumpers, it is difficult to isolate the premium for the hybrid powertrain system itself. Hall estimates that the Two Mode hybrid system alone adds about $5,000 in cost. GM remains confident it will meet its hybrid sales targets. “Even 8,000 to 12,000 vehicles over a full model year isn’t a lot of vehicles when you consider how many Chevy dealers there are,” Corbett says. “We just need to build awareness.” Via: Automotive News |
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