General Motors plans to halt Chevrolet Volt production for five weeks to reduce stock, the second extended stoppage since late December.
Production of the extended-range EV will stop at the Detroit-Hamtramck plant from 19 March to 23 April, the Detroit Free Press reported. Chevrolet sold 1,023 Volts in February, over double the number of all-electric Nissan Leafs sold, the paper added.
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“Volt sales are increasing but we are currently at a point where we have to maintain inventory levels,” GM spokesman Chris Lee said.
In February, hybrids and electric cars accounted for 3.2% of US industry sales, up from just over 2% for 2011, Jessica Caldwell, senior analyst for Edmunds.com, told the ‘Freep’.
GM ended the month with a 154-day supply of Volts, according to WardsAuto data cited by the paper – over twice the 60-day supply considered adequate.
Edmunds.com chief economist Lacey Plache said: “The fact that GM is now facing an oversupply of Volts suggests that consumer demand is just not that strong for these vehicles. The price premium on the Volt just doesn’t make economic sense for the average consumer when there are so many fuel-efficient gasoline-powered cars available, typically for thousands of dollars less.”
Edmunds’ senior analyst Michelle Krebs added: “The Chevrolet Volt has had a very rocky go of it, from the very beginning of the launch when confusion emerged about what it was – an EV or a hybrid – to the latest episode with Volts catching fire after NHTSA testing. Sales have been extremely disappointing along the way. As a result, the plant has been started and stopped a number of times.
“This period of high gas prices should have given sales of the Volt and other hybrids and electric cars a lift. Instead, there’s a wide selection of 30mpg and even 40mpg cars that don’t carry the hefty premium of vehicles like the Volt so the Volt, Nissan Leaf and others are up against stiff competition.”
“I think the Volt has viability long term, but the sales numbers are going to be low for the next few years,” Mike Omotoso, an auto analyst at LMC Automotive, told the Detroit Free Press.
The paper noted that the Volt costs about US$32,500 after a $7,500 federal tax credit. Some states such as California offer additional rebates for certain plug-in vehicles.
In contrast, the 2013 Chevrolet Cruze Eco gets 37 mpg on the highway and starts at $25,235.
“I think it’s hard to charge $40,000 for something people are kind of confused by and just don’t understand,” Caldwell said.
GM halted production of the Volt from 23 December until 6 February to make production modifications it promised to the National Highway Traffic Safety Administration – two Volts caught fire at least a week after their batteries were punctured in crash tests though federal safety regulators closed their investigation of the fires after GM strengthened the battery pack casing and installed sensors to detect leaking battery fluid.
The report said about 1,300 workers will be temporarily laid off at the plant for another five weeks – the factory is being retooled to produce the redesigned Chevrolet Malibu.
Aaron Bragman, analyst for IHS Automotive, reportedly gaves GM credit for cutting back on production.
“In the old GM days, they would have kept building and building and building and would have slapped big incentives on it,” Bragman told the Detroit paper.
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