No employee discount, but Costco discount available!
- Thread starter jjr
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oilerlord
Well-known member
Guys, read the fine print at the bottom of the page:
"Certain vehicles may be excluded from the program."
If GM isn't offering a discount to employees, then I doubt they will offer one for Costco members. It's easy to get a $2000 discount on a highly profitable Tahoe, not so easy finding a discount on a car that's already being sold well below cost.
Unless GM decides to juice sales in CARB states for ZEV credits, don't expect to see any significant discounting anytime soon.
"Certain vehicles may be excluded from the program."
If GM isn't offering a discount to employees, then I doubt they will offer one for Costco members. It's easy to get a $2000 discount on a highly profitable Tahoe, not so easy finding a discount on a car that's already being sold well below cost.
Unless GM decides to juice sales in CARB states for ZEV credits, don't expect to see any significant discounting anytime soon.
Lots of reports of people getting a discount thru the Costco Auto program.oilerlord said:
They even had a configuration section up with (MSRP but no member pricing) for about a day.
Costco has become a big player with a pre-negotiated price. You can often get the same or better deal on most cars if you're a decent negotiator, but not on a new or high demand model like the Bolt (until they are sitting on the dealers lot for a bit).
http://fortune.com/2016/10/06/costco-cars-membership-program/
oilerlord
Well-known member
DucRider said:
I'm merely posting the fine print - that certain vehicles may be excluded from being discounted - not minimizing the value of the Costco program itself. While there is certainly a chance for Costco to negotiate a discount with GM, or local dealers on behalf of it's members on a Bolt, buyers need to realize that GM is already selling these cars below cost.
roundpeg
Well-known member
Below cost, I am not so sure about. We will soon know whether GM decides to incentivize sales of the car this early in its run, but just the general principle that they don't need to with the first however many off the line argues against. Even if they did, those incentives would pass along to all dealers, not just to sales through Costco. Otherwise, it's up to the dealers to decide whether they want to cut into their margins to offer a discount.
Selling at a loss or not, a discount is indeed available thru Costco's Auto Program. Not sure exactly what your point is as this thread is about that fact.oilerlord said:
But since you have cost figures;
How much are they losing per car?
Is that accounting for R&D and retooling of the factory?
Or only parts and labor?
Does it take into account the value of the ZEV credits?
What value are you placing on raising the fleet average to comply with CAFE standards (which allows them to sell more pickups and SUV's at a large profit)?
Are you placing any value on intangibles like earning Car of the Year awards, beating Tesla to market with a sub $40K 200+ mile EV, and the associated positive publicity and free advertising?
m16charged
Member
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- Oct 26, 2016
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We used a Costco discount on a Chevy we bought years ago
oilerlord
Well-known member
DucRider said:
Geezus, Gary...stop being the thread police chasing the pedantic. I doubted that Costco would offer a discount on the Bolt, but I never said Costco WOULDN'T offer a discount, only that we shouldn't expect anything significant based on an assumption that the Bolt is being sold below cost.
I'll stipulate that I don't work for GM, Costco, or have access to the cost accounting for the Bolt. My assumption is based on reports of unit losses that Tesla incurs on every Model S they sell, and on expert opinions such as Bob Lutz's experience with the Volt project. To quote Bob Lutz's comments regarding profitability on the Bolt:
"I no longer have access to General Motors figures, but I would be surprised and shocked if the 200-mile electric Bolt is going to make money,” stated Lutz (this was at an Automotive News roundtable back in August). “You look at the cost per kilowatt hour of batteries and the number of kilowatt hours they have got in there and then you look at the selling price. It’s just not going to work.”
https://cleantechnica.com/2015/12/27/bob-lutz-thinks-chevy-bolt-will-lose-gm-money/
I put more faith in an "opinion" from someone that used to be Vice Chairman, Special Advisor Design and Global Product Development at GM, and an insider on the Volt project - then the "facts" you aren't privy to. You're free to agree, disagree, or spend hours googling something else that aligns with your self-righteous agenda, whatever that is, but I'm going with Bob on this one.
oilerlord is right. Costco may offer a discount, but it doesn't mean the dealers have to honor it. I found that out when I tried to buy the 2014 Corvette when it came out. None of the dealers would touch the Costco or USAA discounts when the Corvette first came out. It was under constraint, and they could get MSRP or above for the few care they could get.
It doesn't hurt to try, but I wouldn't count on it.
Michael
It doesn't hurt to try, but I wouldn't count on it.
Michael
roundpeg
Well-known member
It's always a tricky business to attempt to estimate profits on any given product. Costs are more than just the materials and labor used to assemble the product. How much corporate overhead is included in the cost of manufacturing? How much capital investment in plant, equipment and tooling? How much R&D? The number you get is going to depend on a lot of accounting assumptions.
I suspect that GM has a lot of R&D invested in the Bolt. They don't recover that cost in the first one that rolls off the line, nor in all the cars made the first model year. Those costs can be amortized out over a number of years and the cost per car goes down the more they sell.
Not sure what any of this had to do with Costco, though. One point I'd make here is Costco's brokers aren't going to get access to many of these cars for awhile. As long as Chevy dealers can sell as many as they are able to get at full retail, why would they make them available to brokers at a discount?
I suspect that GM has a lot of R&D invested in the Bolt. They don't recover that cost in the first one that rolls off the line, nor in all the cars made the first model year. Those costs can be amortized out over a number of years and the cost per car goes down the more they sell.
Not sure what any of this had to do with Costco, though. One point I'd make here is Costco's brokers aren't going to get access to many of these cars for awhile. As long as Chevy dealers can sell as many as they are able to get at full retail, why would they make them available to brokers at a discount?
Here;s some more Bob Lutz wisdom:oilerlord said:
"Hybrid cars like the Toyota Prius make no economic sense" (2004)
About Tesla:
"As they say, 'Socialism is great until they run out of other people’s money.' Tesla burns cash. It’s not a car company, it’s a cult of fanatics who think Elon Musk can do no wrong. But financially, it doesn’t work.”
"Tesla is doomed to fail"
"Tesla's showing all the signs of a company in trouble: bleeding cash, securitized assets, and mounting inventory. It's the trifecta of doom for any automaker, and anyone paying attention probably saw this coming a mile away."
" Elon hasn’t delivered a thing, except increasingly negative cash flow, and an increasing lack of profitability; more and more capital spending.”
And to top it off:
"Global warming is a crock of ****"
Quoting an anti-EV source on the costs of producing the Bolt is questionable (at best). Why not ask the Koch brothers what they think?
You've said "on the assumption that the Bolt is being sold below cost". You have shown no basis to assume that, and it still doesn't change the fact that a discount is available thru the Costco Auto program. You hedge your negativity with term like significant. When people are assuming that MSRP is the best deal to be had, $600 below invoice = significant. This is a useful piece of information for those looking to purchase a Bolt.
oilerlord
Well-known member
Michael1 said:
LG Chem predicts the Bolt will sell 30,000 Bolts in 2017:
http://gmauthority.com/blog/2016/10/lg-chem-predicting-30000-2017-chevrolet-bolt-ev-sales-next-year/
That sounds like a lot, however GM has over 20,000 dealers. To your point, and if LG's sales projections are correct, there won't be a lot of Bolts to go around. GM dealerships that are lucky enough to get allocation should be able to get MSRP, and really have no reason to discount the car. That being said, if Costco does come through with a discount - everyone wins, and I'm happy to be wrong.
Roundpeg, why don't you give Costco corporate a call and ask them for a discount? Let us know how it goes.
roundpeg
Well-known member
You don't have to burrow far down to find that LG actually said they expect to sell at least 30,000 battery packs for the Bolt. This was in a conference call on earnings, which are usually conservative on forward guidance. So it could be more. Not that even twice that many cars will cover all the Chevy dealers in the country, but probably a lot of them aren't even certified to sell EVs.
All I know about buying through brokers was a couple of cars I bought that way years ago. The broker worked with fleet sales at a dealership. Got me an okay deal but nothing to write home about, and that was on cars not in short supply or particularly high demand. Anyway, I am not a Costco member (nothing I need comes by the gross or in drums), so a better experiment for someone who is a member.
All I know about buying through brokers was a couple of cars I bought that way years ago. The broker worked with fleet sales at a dealership. Got me an okay deal but nothing to write home about, and that was on cars not in short supply or particularly high demand. Anyway, I am not a Costco member (nothing I need comes by the gross or in drums), so a better experiment for someone who is a member.
oilerlord
Well-known member
Well, as someone that has a Bolt on order, you have nothing to lose in calling up Costco and finding out what (if any) discount is available. If it turns out the discount is more than the cost of a $50 membership - you win.
You're right about the concept of underpromise & overdeliver in terms of forward guidance to investors. LG may indeed deliver 50,000 or more battery packs for the Bolt in 2017. Even if that happens, there won't be enough cars to go around - at least in the first year of production. To Michael's point, dealers may not be inclined to offer a discount due to short supply and high initial demand.
You're right about the concept of underpromise & overdeliver in terms of forward guidance to investors. LG may indeed deliver 50,000 or more battery packs for the Bolt in 2017. Even if that happens, there won't be enough cars to go around - at least in the first year of production. To Michael's point, dealers may not be inclined to offer a discount due to short supply and high initial demand.
roundpeg
Well-known member
As someone who has a Bolt on order and expects to see the car in a few weeks, I do indeed have something to lose, which is my place in line for one of the first to arrive. Even if Costco offers me a couple of hundred off, I don't see the win if I have to wait until April to get the car. Besides, they'd probably ask me for a member number before quoting me a price, which I ain't got. One of the fans of buying cars though Costco should really be the person who checks this out.