The media may want to take a break from its rooting for General Motors, not to mention its hype surrounding the Chevy Volt. USA Today recently summarized Consumer Reports’ ranking of automakers based on performance and reliability. Of the 13 automakers receiving report cards, GM and Chrysler received the worst rankings.
The number one performer according to CR was Honda, followed by Subaru. Strong reliability contributed to the high overall scores. GM was number 12 on the list with only Chrysler receiving a lower score. It should not come as a surprise that the bottom two performers were the automakers that ended up bankrupt and receiving taxpayer funded bailouts.
Almost two years after the bailouts, it appears there are still underlying areas of concern regarding quality and new product launch. It seems the fact that the Obama Administration chose to be advised by bankruptcy experts and Wall Street fat cats when orchestrating bankruptcy proceedings enabled GM and Chrysler to remove obligations from their balance sheets but didn’t address the most important reasons for the decline of the two companies, primarily the lack of competitive vehicles.
In the case of GM, there was an additional blow to their reputation with negative commentary on the much-hyped Chevy Volt. GM has had a history of over promising and under delivering regarding the Volt. The public was led to believe that the Volt was a revolutionary, pure electric vehicle that would travel 40 miles on an electric charge and get the equivalent of 230 MPG. The media bought in and touted the Volt proclaiming that it would be the savior for GM. Skeptics were not impressed with what the Volt offered at a price of $41,000 and now reports are surfacing that question the practicality of the Volt and expose the vehicle as not being as environmentally friendly as GM would have us believe.
CNNMoney.com published a ranking of the 12 greenest cars by the American Council for an Energy-Efficient Economy. The Chevy Volt ranked number 12 on the list. Consumer Reports also was not impressed with what the Volt had to offer. Detroit News quotes David Champion, the senior director of Consumer Reports auto testing centers, as stating that the Volt “doesn’t really make a lot of sense.” Test results seem to support that statement. Champion says the Volt only went 26 miles before the gas engine took over when tested in cold weather. CR had previously reported that the Volt averaged 30 MPG in gas mode. Compare this to the Toyota Prius which gets 51 MPG and starts at $23,000. This is data that hardly seems to justify the $7,500 taxpayer subsidy each Volt sold receives.
The Chevy Volt may end up becoming a huge embarrassment for GM. GM CEO, Dan Akerson, recently upped the ante by claiming that 25,000 Volts will be built in 2011 with expectations as high as 120,000 in 2012. GM has also boasted of pricing power with demand far exceeding supply. Sales figures for the Volt do not support this claim with an abysmally low 281 vehicles being sold in February. That’s even lower than January’s 321 sold.
If Chevy Volt sales do not eventually live up to the hype, GM and Akerson should rightfully lose much credibility. If this is the case, it should be asked if the initial hype on the Volt was a PR stunt designed to help GM receive a taxpayer funded bailout as well as being a ploy to help support the subsequent IPO. I also have to wonder if the overwhelmingly positive media coverage was influenced by anything other than herd mentality. If retail sales for the Volt do not improve significantly, the time will come for much needed reflection.