How a Chevy Dealership is Selling Volts

Forbes Magazine, 4/29/12

All it takes to sell Chevrolet Volts to the American public is a dealership that is dedicated to the task from the top down, focused training of salespeople in how to showcase the car, a handful of Volts in inventory, and a homegrown Excel spreadsheet with some data comparing the cost of ownership of several Chevrolet models.

And one other thing — it helps to have windmills on the property, providing electricity to your dealership. They attract Volt aficionados like a homing beacon.

Those are several of the elements used by Serra Chevrolet in Southfield, Mich., to sell a phenomenal 25 volts per month these days. That may not seem like a lot to outsiders, but consider that the average U.S. auto dealer sold only a total of 653 cars for all of 2010, according to National Auto Dealers Association data.

And understanding that most of the 3,000 Chevy dealers still sell only one Volt, or maybe fewer, per month, Serra’s accomplishment is highly notable — especially as General Motors attempts to gauge both near-term and long-term demand for its highly visible “extended-range hybrid.”

“We’re getting in 25 a month” from the GM factory in nearby Detroit, “and we’re selling 25 a month,” Greg Brown, general manager of the dealership, told me. “We only have five left on the lot; we should always probably have 15 to 20 here at the dealership. So we just put in an order for another 25.”

The general idea of electric cars and plug-in hybrids such as Volt is still taking on water. Just last week, for instance, the consensus of auto-industry executives at the Society of Automotive Engineers World Congress in Detroit was that such vehicles are likely to remain confined to a niche of under 10 percent of the U.S. market through 2025 and beyond.

As for Volt, it isn’t clear how long the car will yet take to reach GM’s original first-year sales goal, set for 2011, of 10,000 units. Volt sold a remarkable 2,289 units in March, by far its best sales month to date. But Alan Batey, vice president of sales for Chevrolet, told me that it would be an “unbelievable achievement” if Volt also hit that sales level for April, because of a number of factors that come into play when selling any low-volume model, and some particular to Volt. This month’s sales will be announced on Tuesday.

In the meantime, however, Batey said that a handful of dealers around the United States “have really gotten after it and created some momentum” for Volt sales. Besides Serra, they include Criswell Chevrolet in Gaithersburg, Md.; Penske Chevrolet in Cerritos, Calif., and others in the West where Volt interest and demand runs highest.

Al Serra’s dealership group is a long-time stronghold for General Motors, with a base in Flint, Mich., GM’s original hometown. Southfield also is in the heart of GM’s base of employees, so they comprise a huge sort of native demand for Volts, no doubt. Yet neither historical footnotes nor the mere fact that Motown is GM’s town sell Volts.

Some other things do. Here are factors Brown and Serra Chevrolet are leveraging to sell an outsized number of Volts:

Cross-selling the car: Many Chevy dealers failed to move Volts last year because they steered typical customers quickly toward other high-mileage models at the first sign of  resistance or a buyer’s lack of understanding the technology. Serra’s approach is to start by understanding the customer’s overall automotive needs and to allow that discussion to lead naturally to the possibility of a Volt for consumers where it could make sense.

That tack has opened the door to some cross-selling of Volt that many dealers still don’t think is possible because they believe the plug-in hybrid only appeals to green “true believers” and avid early-adopter technologists. Serra’s salespeople like to point out, for instance, that Volt is actually a hatchback even though its design silhouette is more suggestive of a sedan. Noting the hatchback broadens its appeal to some purchasers based on an important attribute other than fuel economy.

“Since we really got to know the vehicle, we’ve been able to switch people from the Cruze, Equinox [crossover] and Malibu [midsize sedan] to Volt,” Brown said. And now, he said, about half of eventual Volt buyers come into the dealership intending to buy the car regardless — but about half don’t start with Volt in mind.

Creating sales-force expertise: Every salesperson at Serra Chevrolet is “extremely comfortable” selling Volt, Brown said. One reason is that each of them has had at least 12 hours of instruction and training specifically in how to highlight and explain the features and peculiarities of the car, such as how Volt seamlessly shifts to reliance on gasoline power if the electricity in the batteries runs out, and how drivers can use a gauge on the instrument panel

“We typically spend 45 minutes on each delivery of a Volt, far more than for other cars,” Brown said. “And we also encourage people to come back with any questions. It’s kind of like selling an iPhone.”

Now that Serra personnel are “extremely comfortable with this product,” he said, “it’s easier for us to explain it to customers.”

Coming up with new sales hooks: Serra doesn’t try to pretend that Volt isn’t different or special but, rather, addresses its peculiarities and tries to exploit them where it can.

For example, Serra makes sure Volt browsers understand that the dealership has set up a partnership with Detroit Edison that would ease installation of a charger in their garage. And a  dealership finance-and-insurance representative created an Excel spread sheet that calculates monthly fuel expenditures for Volt and the other 16 Chevrolet models that Serra sells.

Such information tends to tilt perceptions of the cost equation significantly toward Volt and its $41,000 sticker price (less $7,500 after a federal tax credit) even compared with, say, a Cruze whose prices begin at $16,800.

“A payment on a Volt might be $150 more a month,” Brown explained. “But we can show them that they’d be saving $150 or $200 a month in gas with a Volt, so it might make sense for them.

Playing the parent card: As Serra has probed for ways to boost the appeal of Volt to mainstream customers, one thing it has come up with is a way to pitch the car to parents: With a Volt, teenage drivers don’t have to hit them up for gas money anymore.

“And if they are hitting you up for gas money if they’re driving a Volt, then you know that they’re driving the car further than they should be,” Brown joked.

But the results are no joke: Of the 50 Volts Serra has sold in the last two months, five have been purchased by parents for their kids.

Keeping Volts in stock: Serra has found that it pays simply to have not only a Volt or two on the showroom floor but also to have a handful in stock at all times. American car buyers are used to seeing a row of any particular model out on the sales lot, and the sight of few Volts — alongside the Traverses and Sonics — on the premises is visual reinforcement of the notion that this is a mainstream vehicle.

Committing from the top: Brown said that, at Serra, “It’s important from the top down to be dedicated to this car.” That includes, for instance, having one sales manager at the dealership who is entirely dedicated to Volt.

And Brown is among many at the outlet who personally often drive Volts. The vehicle is ideal for his 45-mile commute. And, Brown said, he’s helped sell Volt to a handful of his neighbors.

Using The Windmill Effect: Serra is a new dealership that has been open only since early this year. So it had some opportunities to harness green technologies that aren’t as easy for pre-existing dealerships to implement.

“Those aspects of the store, and the mindset of the Volt, go hand-in-hand,” Brown said. “It helps.”

Offering generous lease rates: Nearly all Volts are leased rather than purchased outright, Brown said, and GM has been helping dealers make Volts affordable by subsidizing leases on the $41,000-list-price car, making them available for about $300 a month. The $7,500 tax credit on Volt purchases goes to the leasing company in the case of a lease deal but, of course, it also helps keep Volt lease rates within the range of many consumers. By comparison, Serra typically leases a Cruze for about $200 to $220 a month.

When on Tuesday GM announces new leasing parameters for Volt, Brown hoped that the company would continue favoring the vehicle. “Right now, it’s phenomenal, so I hope it stays,” he said.

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