Volt Battery Problems Don't Halt Chevy Marketing Efforts -- Yet

GM Reaches Out to Owners, Slows European Rollout, Keeps Eye on Investigation

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Chevy Volt
Chevy Volt
One of the intended ripple effects of Chevrolet's Volt -- that it would serve as a showcase for General Motor's sophisticated electric-power technology and drive customers to the brand -- recently took an unintended swerve, and the automaker is seeking to defuse worries that the Volt's batteries can catch fire.

As reaction to the potential hazard escalated last week, Volt owners were initially offered free loaner or rental cars; by week's end, President Dan Akerson was saying that GM was prepared to recall the 6,000 Volts on the road if a federal investigation deemed it necessary, and he offered to buy back the Volts from owners concerned about fire risks.

Meanwhile, managers at Chevrolet -- General Motors' most popular and prosperous division -- maintain that the fires, caused by intensive crash-testing procedures in unoccupied vehicles, won't alter their marketing plans for the $40,000 plug-in hybrid. Goodby, Silverstein & Partners does creative for the Volt.

According to the Associated Press, Transportation Secretary Ray LaHood said "that he was confident that the Volt is 'safe to drive,' and said the government was not trying to protect GM. . . . 'We're not in the business of protecting the auto industry. We're in the business of making sure cars are safe,' LaHood said."

The tests that have produced the fires are being conducted by the National Highway Traffic Safety Administration.

"We have been advertising the Volt heavily, and we're not going to change anything with regard to spending," Joel Ewanick, GM's chief marketing officer, told reporters last week. The four-door Volt, long hyped by GM as a real-world alternative to pure petrol power, went on sale in the U.S. about a year ago, and GM reported last week that it sold 1,139 Volts in November, 2.8% more than in October. GM has been steadily ramping up distribution channels and production, and says it hopes to sell 60,000 units worldwide in 2012.

But Mr. Akerson told Reuters on Thursday that delivery of the Volt in Europe, under the Opel brand badge, would be delayed until engineers re-examine and possibly redesign the battery packs. "We want to assure the safety of our customers, of our buyers, and so we're just going to take a time out, if you will, in terms of redesigning the battery possibly," he said.

While electric models like the Volt and the Nissan Leaf represent only a fraction of U.S. auto sales, other players in premium segments have rolled out electric concepts recently, including Audi, BMW, Mercedes-Benz, Toyota and Volkswagen, among others. Production series vehicles are expected next year. Still, questions raised about the credibility of the power sources threaten to inhibit the rollouts.

While Mr. Akerson conceded in an interview with the Associated Press that the publicity may deter some from considering a Volt, others put it in a different perspective.

"This sounds like the same risk I run carrying around a laptop computer," said Ralph Paglia of Tier 10 Marketing in Herndon, Va. "For people interested in the Volt, this theoretical risk won't affect their buying one." He referred to reported instances of lithium-ion batteries used in portable PCs catching fire; as recently as May, Hewlett-Packard voluntarily recalled thousands of notebook batteries.

The report from the National Highway Traffic Safety Administration, which came after two of Volt's rechargeable lithium-ion batteries emitted smoke and sparks, was issued in late November. Rather than address the matter in a defensive ad campaign, "we'd prefer to let actions speak louder than words," said Chevy spokesman Rob Peterson. "It's painful to go through this kind of investigation, but our key objective is to get out the word that we stand behind our product."

Mr. Peterson said Chevy employees held a Facebook session last week for about an hour to discuss the Volt. "From a brand perspective, there's never a good time for an investigation, and with all the new technologies, your greatest learning occurs at the beginning," he said. "We're learning here about the challenges."

Perhaps ironic in terms of timing, Consumer Reports last week announced the results of its most recent owner-satisfaction survey. Subscribers were asked: "Considering all factors (price, reliability, comfort, enjoyment, etc.), would you get this car if you had it to do all over again?" Topping the list was the Volt.

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