Sunday, March 04, 2012

Chevrolet Volt plant to be idled due to slow sales

The Chevrolet Volt plug-in hybrid outsold its big rival, the all-electric Nissan Leaf, by a 2-to-1 margin in February. That doesn't mean that the car did well, however: GM said Friday that its Volt plant will be idled for five weeks beginning this month because of slow sales.

The plant shutdown is due to slow sales, the company said, in a bid to reduce inventory. About 1,300 workers at the Hamtramck, Mich., factory where the Volt is built will be out of work between March 19 and April 23. The plant had just resumed production on Feb. 6, after a prolonged holiday shutdown, and had only recently begun building new versions of the Volt that were "clean enough" to meet the standards necessary for the California HOV lane.

1,023 Volts sold in February. 478 Nissan Leafs were sold. But the Volt has a large backlog while the Leaf is in short supply.

At the same time, consumers who pre-ordered the Toyota Prius Plug-in, a prime competitor to both of those vehicles, recently received emails indicating that the autos of those first in line will be built in March.

The cost of the Volt, $41,000 prior to a federal tax rebate, is a big negative for consumers. Lacey Plache, chief economist for auto-research firm said that GM's move signals 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."

In addition, a U.S. safety investigation into whether the car's battery posed a fire risk after a serious accident added negative publicity. The Volt was eventually cleared of any safety concerns, with GM even offering to buy back Volts from any concerned owners.

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