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Why Offer Electric Cars? Because They Sell More Gasoline Cars

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John Duncan takes delivery of one of the first 2011 Nissan LEAF EVs, near Portland OR, 12/15/2010

John Duncan takes delivery of one of the first 2011 Nissan LEAF EVs, near Portland OR, 12/15/2010

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Amidst supposedly slow sales--actually limited mostly by low production--one benefit to automakers of offering electric cars has nothing to do with cars that plug in.

Not only do electric cars attract radically different buyers to the brands that offer them, they also help sell conventional gasoline cars.

Plug-in cars, it turns out, are "halo vehicles" that attract shoppers into showrooms--and those shoppers may end up buying another vehicle, sans plug.

Stories in The Detroit News and other outlets have reported on data showing that the Chevrolet Volt and Nissan Leaf plug-in vehicles attract new customers into those makers' showrooms.

First 2011 Nissan Leaf delivered to buyer, San Francisco, Dec 2010, photo by Eugene Lee

First 2011 Nissan Leaf delivered to buyer, San Francisco, Dec 2010, photo by Eugene Lee

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Some only come to look, or perhaps ask for a test drive--despite not intending to buy.

But knowing that a questioner may become a buyer, the smarter dealers will accommodate their desires--one reason Chevrolet insists that each of its Volt-certified dealers keep one demonstration Volt on hand that it's not allowed to sell.

Data on thousands of buyers who put down a deposit on a 2011 Nissan Leaf shows that most already drive a hybrid car--the Toyota Prius was most common--but few have owned any Nissan vehicle before. Nissan now says that fully 83 percent of Leaf buyers are new to Nissan vehicles.

In June, GM released data on its first wave of Volt buyers. One third of them had never in their life entered a Chevy dealer, and half hadn't been into one in the last 10 years. Almost 90 percent of their trade-ins were non-GM vehicles (33 percent were hybrids), including various luxury makes.

Both makes are attracting new buyers in key early-adopter markets where its cars are all but invisible: southern California, the San Francisco Bay Area, the wealthy suburbs of New York City.

Chevy, Buick, and GMC 'Main Street in Motion' drive event, CitiField, NYC, June 2011

Chevy, Buick, and GMC 'Main Street in Motion' drive event, CitiField, NYC, June 2011

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But do they lure buyers into gasoline vehicles too? The use of electric cars as halo vehicles to sell more pedestrian models was clearly on display at recent GM "Main Street in Motion" drive events held in stadium parking lots all over the country.

The goal of these events is to get potential buyers to drive new models from Chevrolet, Buick, and GMC in a low-pressure environment with no salespeople. Demonstrating GM's cars against competitors' models will boost buyers' impressions of GM's vehicles, the theory goes, even if not all of them buy one.

As we wrote in our June coverage of one "Main Street in Motion" event at New York's CitiField, drives in the 2011 Chevrolet Volt extended-range electric car proved extremely popular, and it had its own driving area.

Chevy, Buick, and GMC 'Main Street in Motion' drive event, CitiField, NYC, June 2011

Chevy, Buick, and GMC 'Main Street in Motion' drive event, CitiField, NYC, June 2011

Enlarge Photo

But because Volt production will be limited at least through next year, Chevy asked that everyone interested in driving the Volt electric car first drive the similarly sized compact Cruze four-door sedan.

In late August, GM said, "According to web traffic data on both Chevy.com and Edmumds.com, the Cruze is the No. 1 cross-shopped Chevrolet vehicle with the Volt. Since April, nearly 200,000 visitors searching for information on the Chevrolet Volt also searched for information on the Cruze."

At the moment, while the Volt struggles to reach sales of 1,000 cars per month, Chevrolet is selling about 25,000 Cruzes each month. That's far higher than the best sales for its mediocre predecessor, the Chevrolet Cobalt.

Lure 'em in with a halo car, sell 'em a family sedan. It's been a tried-and-true marketing tactic for decades. It's just that now the halo car has ditched its V-8 and added ... a plug.

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Comments (9)
  1. Hmmm, Cruze only sold 18,000 last month so I am not sure about the 25,0000 number. Perhaps that is US versus international numbers. http://online.wsj.com/mdc/public/page/2_3022-autosales.html
     
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  2. Cruze sales for 2011 (US only):
    Jan. 2011: 13,631
    Feb.: 18,566
    Mar.: 18,018
    Apr.: 25,160
    May: 22,711
    June: 24,896
    July: 24,648
    Aug.: 21,807
    Sep. 18,097
    So a 23k average for last six months. Add in Europe and Australia as well and volumes are obviously higher.
    The Cruze has been helped by the horrendous reviews of the new Civic and sales have been stronger than expected. Personally, I prefer the Focus by far (but haven't driven one yet) but the Cruze is worlds above the old Cobalt and the ancient Corolla, IMO.
     
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  3. Thanks for the info. The Cruze sales are impressive given that it is a new car. Wonder if the Aug and Sep number indicate softening in demand.
     
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  4. So far, I've heard no plausible reason from Govt Motors as to why the production numbers for the Volt aren't even remotely close to what they promised. It almost seems like they don't want to sell
    them. We can assume Chris Paine will latch onto that bit of info.
    In the end, electrification of the automobile will owe nothing to either GM or the others building their minus-100 mile range EVs.
    They aren't even on the proper design track, despite the pioneering efforts of Tesla, visible to all, even the blind.
     
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  5. @Ramon: Do, please, enlighten us as to what the "proper design track" might be? Since as I can't ascertain it from your typically ill-tempered rant, I too must be blind.
     
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  6. He means that they should be building a $80,000; 300 miles, DB9ish looking EV.
     
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  7. I always stay focused on the cars I want and/or want to test drive. Never let a dealer talk you into spending your money on a car you had no previous interest in. If you go into a Chevy dealer with the intent to buy a Volt DO NOT leave in a Cruze, at the end of the day you'll be much happier with the car you wanted in the first place.
     
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  8. After ordering a Leaf, I ended up leasing a Chevy Volt & I am quite happy with the choice. Except for the gas I burned on the 75 mile trip from the dealer I have burned no gasoline in 456 miles. All of us who are choosing to go electric will make a difference. It's just a shame that it has taken so long.
     
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  9. @Ramon... All of us here know that using actual facts and thinking aren't part of your usual pattern, but even for you this is pathetic... GM is building them almost exactly at the pace provided publicly a year ago. Are the numbers too difficult for you or do you just enjoy making things up fresh with every post you make?
    GM said 10k vehicles, let's see where it ends up at the end of 2011.
    @ John B, you're welcome. I think the release of the Civic hurts a little, even to bad reviews, but perhaps it's just people scared about the economy? Good question, I wonder the same thing.
     
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