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Sunday, August 15, 2010

Nice cars finish last

A best seller in Europe, the Astra was a handsome car.
Nice cars finish last. This is not always true but all too often nice is not enough to earn a profit. For that reason, nice cars come and nice cars go. Think of the Saturn Astra, a car envisioned as the saviour of the Saturn car company but instead became the company's swan song.

Before the Astra even hit North American dealerships there were clear signs of trouble. General Motors predicted no more than 30 to 40,000 in first year sales. These sales numbers were much lower than those achieved by the poorly received Saturn Ion which the Astra replaced.

And even those mediocre numbers were too  high. GM sold about 12,000 Astras in the States in 2008. With a 139-day supply of  '08s, GM didn't even import the 2009 Astra into the U.S. Yes, I said import. Saturn, originally created to battle the imports, was itself an import at the end.

The Astra in a sense delivered on its promise in spades. It was supposed to sell poorly and it did. Now, GM is touting the Chevrolet Volt as a fine car but with predicted sales of possibly 10,000 units in its the first year.

Each Volt sold in the States will cost the American taxpayer $7500 in rebate money or this poorly selling care will cost the American treasury $75 million over the course of a year. Of course, if the Volt proves to be popular and the U.S. government retains the rebate program, the charge to the American taxpayer could grow to more than $337 million or more annually. (Chevy sees sales climbing to possibly 45,000 units by 2012.)

The Chevrolet Volt is a nice car but with a price tag of $41,000 even the $7500 government rebate  will not make it a success. At least, that's my opinion.

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