GE Asterisk on Record Volt Sales Deserves Asterisk (Update 1)
NEW YORK ( TheStreet) -- As high gas prices dominate the headlines and pain at the pump multiplies, General Motors' (GM) Chevy Volt is finding more consumers willing to buy into the plug-in electric hybrid vehicle concept.
In fact, initial concerns that the record sales number posted by the Chevy Volt in March was driven by a big fleet purchase from GE(GE) were premature and didn't reflect just how quickly the Volt's fortunes shifted in March.
It's fair to say the Volt ran right over those cautious assumptions. Between the high gas prices and headlines about a Volt battery fire earlier this year possibly receding from the consumer landscape, the sales picture improved.
The Volt -- a month after GM temporarily shuttered production of the car -- reached sales of 2,289 in March, 50% higher than December 2011, which previously was the vehicle's best month since launch. More importantly, only 160 of the purchases were by fleet buyers, while 2,129 Volts were purchased by retail car buyers. The fleet buying was only 5% of Volt sales.
|GE loves the Chevy Volt, but in March it was consumer love leading the buying.|
GE began purchasing Volts for its employees last month in what it called "the largest order in history" of cars for its employees. However, the Volt numbers reflect a slow start to the GE Volt order. GE plans to buy 12,000 Volts by 2015. In effect, GE could buy 500 Volts each month in 2013 and 2014 and meet that target, without buying any Volt fleet vehicles this year. GE did say all fleet vehicle replacements in 2012 will be made with Volts, but it seems as if that could be a minor part of the Volt story if it is successful this year.
The GE buying of Volts will continue to be a swing factor in month-to-month sales figures for the Volt, but the March data shows consumer demand for the vehicle is increasing at a critical time for GM, critical because of the excess supply.
There have been more than 18,000 Volts produced and roughly half had been sold through February, a situation that led to the production halt and a more recent statement from GM that the production shutdown could be extended by a week.
Analysts have also pointed to sales of the Nissan Leaf, down 29% for the past two consecutive months, as a sign that all is not well among U.S. consumers when it comes to the electric car market.
However, the "inorganic source of demand," from GE and the trend in Leaf sales didn't reflect what was simply a good month for the Volt in March, once GM broke out the retail vs. fleet numbers on a conference call with analysts and the media.