In the competitive automobile industry, you better have a good product.  One that is not only stylish but one that performs well and has that “street appeal” that everyone wants to show off.

After years of being bombarded with multi-million dollar advertising campaigns and trade journal articles, today’s car buyer is very attuned to buying a car that reflects their status in life as well as their affluent “coolness” in buying a car that performs.  If they are spending anything above the median car price ($32,000 for 2011), the car better have performance above the median car as well.

PAY FOR PERFORMANCE

Certain brands have immediate payback when it comes to street appeal and status symbol recognition.  This has been instilled by decades of heavy marketing which was fueled by all the car manufacturers including GM.  Comments when people are driving up tell the whole story:

-          “Wow, nice Corvette!”

-          “Hey, he’s driving a BMW!”

-          “Lexus?  That’s classy.”

If you go back into the 1960s, the slogan for U.S. sales was, “Win on Sunday, sell on Monday.”  The rivalry between Ford, GM and Chrysler was at a fever pitch at the race tracks and if their car won the race on Sunday, people would be in the showroom on Monday looking for that “hopped up” Ford, Chevy, Dodge or Plymouth.  There always was a focus on performance.

Performance on the street (or at the track) carried over to how people measured you as to your choice of car.  A Rambler American did not have the panache as a Ford Mustang or Chevy Camaro.  Were you measured by what you drove?  Yes, and you still are today.

As I was told by a Mercedes salesman when we were looking at buying a used Mercedes, “People won’t ask you what year Mercedes it is, all they see is that you are rolling up in a Mercedes.”

The same value of street panache goes with other brands like BMW, Lexus, and of course, Bentley (the status symbol of the hip-hop generation, Paris Hilton, and NFL stars,).

Pulling up in a Bentley blows out any other car unless it’s a Bugatti Veyron or Lamborghini Reventon.  If you are in a Rolls-Royce, you better have a chauffeur.

There is a premium on these cars.  The premium is for performance, power, precision engineering and panache.  People will pay the premium for those features.

Let’s get back to the Volt and its appeal…

IT’S SELLING LIKE HOTCAKES…….NOT

Where is the market for this electric car?  All those who scream about the environment aren’t putting their money where their mouth is.  Or, maybe they don’t make the money to buy one of these cars.  Environmentalists want someone else to spend a lot of money.

At $40,000-plus, this car’s price does not make it a popular car with the masses.  Those who have spent $41,000 or so on a car are not looking at the Volt as one of their top picks.  For $41,000, you can buy a front-wheel drive Cadillac SRX, a BMW X3 (all-wheel drive SUV) a Nissan Maxima (loaded for $1,000 less) or a Ford Taurus SHO AWD (loaded).  The list goes on with other premium cars like an Acura TL, Infiniti G37 with AWD and others.

Looking at the sales figures of 3,200 in seven months is pretty telling.  That averages out to about 457 cars a month.  Compare that with the first-year sales of the Ford Mustang.  First year Mustang sold about 417,000 units with 22,000 orders on the very first day.  No one is rushing out to buy a Volt and I doubt if it will even reach GM’s sales projection of 10,000 units for the first year.

Articles in the mainstream media are mixed.  Some say they have sold out the inventory and others say that they have called dealers and cars are available.  With only 125 cars sold in July 2011, I would say that you can still buy one at a dealer – they have NOT sold out and those articles that say they are seem more like GM propaganda than fact.

THE BIG QUESTION - HOW MUCH?

If the Volt is $41,000 and you get the preferred loan rate of 5.73% (only for those with a 720-850 credit score, lower scores pay higher rates), the monthly payment for a 48-month loan with no down payment is $1,024 a month.  Lower credit scores jump the percentage rate as you can see in the table below (percentages accurate as of 8/19/2011)

Not too many recent college grads can afford that, plus their college loans even if they are still living with Mom and Dad.

Take the $7,500 government rebate and the car is still $33,500.  Re-calculate at the preferred rate of 5.73% (if you have great credit) and the monthly payment is approximately $850 a month.  (The calculator I used also had a built-in sales tax for your zip code built in)

If you are really worried about the environment, buy a used car.  The most energy is spent in building the car – not driving it.  So all who bleat about “saving the environment” go out and buy a used car instead of a brand-new one.

As for the Volt, with its sales so dim, are they going to create another “Cash for Clunkers” program specifically aimed at the Volt?  I hope not.

CARLINI-ISM :  The market for electric cars are more in people’s minds than on the streets.

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