Monday, May 12, 2014

GM offers dealers $5,000 for Cadillac ELR test drives

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The ELR went on sale in late December starting at $75,995, including shipping

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Nora Naughton

Automotive News

May 12, 2014 - 4:04 pm ET

General Motors is offering Cadillac dealers a $5,000 incentive to offer test drives of its ELR plug-in hybrid, which has gotten off to a slow start since its launch five months ago.

GM is calling the offer the Demonstrator Allowance Program, and it is designed as a tactical move to help register more test drives, said Cadillac spokesman David Caldwell. He also said it probably will take awhile for widespread consumer awareness about the ELR.

“We want to do it because of the newness of the ELR,” Caldwell said. “It’s a different brand.”

GM also is offering up to $3,000 in customer discounts toward the lease or purchase price of an ELR, The Wall Street Journal reported last week.

The moves come as ELR inventories continue to grow. At the end of April, GM had 1,700 ELR coupe models in stock, which is a 725-day supply, according to the Automotive News Data Center.

Caldwell said GM’s Detroit-Hamtramck plant, which assembles the ELR, has had heavier production since the beginning of the year than it will in the summer or fall, which could be the explanation for the inventory backup.

Industry analysts have a different opinion. The ELR went on sale in late December starting at $75,995, including shipping. Analysts and dealers have criticized that price -- twice that of the Chevrolet Volt, which shares its powertrain with the ELR.

The ELR is the second vehicle to get GM’s Voltec technology, which uses a 435-pound battery pack and two electric motors for an estimated electric range of about 35 miles. Once the charge is depleted, a gasoline-powered, 1.4-liter, four-cylinder generator kicks on to power the drivetrain.

The Volt’s U.S. sales fell 7 percent through April compared with the year-earlier period, to 5,154 units.

The Demonstrator Allowance Program is part of a nationwide effort to get more dealers to back and support test drives, Caldwell said. He said Cadillac has had a lot of success with similar programs on the West Coast.

Dealers have until June 2 to designate ELRs as test vehicles. The program will pay $5,000 for each ELR assigned to the test fleet. Dealers with fewer than seven unused ELR models in stock may designate one for the demonstrator program, and those with more than seven ELRs in their inventory can designate two as test vehicles to qualify for $10,000 in payouts. Each vehicle must accumulate a minimum of 750 logged test drive miles.

On top of that, dealers can collect an additional $2,000 for every ELR sold in July and an extra $1,000 for every one sold in August.

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