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Chevy Volt Production To Halt For 5 Weeks Due To Oversupply

 
2,216 views Mar 5, 2012
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First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010

HI-RES GALLERY: First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010
  • First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010
  • First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010
  • First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010
  • 2011 Chevrolet Volt Production Line at Detroit-Hamtramck Assembly Plant
  • 2011 Chevrolet Volt outside Detroit-Hamtramck assembly plant

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Late Friday afternoon, Chevrolet announced it would idle production of its Volt range-extended electric car for five weeks, from March 19 to April 23.

The story was first reported by the Detroit Free Press; GM informed the 1,300 assembly-line workers at the Detroit-Hamtramck plant of the shutdown on Thursday.


Because the Volt is the only car now built at the plant, the lines will be idled for those weeks. Later this year, production of the 2013 Chevrolet Malibu will be added at Hamtramck, which will likely more than double its output.

The spring shutdown follows a multi-week hiatus last summer for retooling (along with removal of dies and tooling for the discontinued Cadillac DTS and Buick Lucerne), and an extended pause over the end-of-year holidays that lasted until February 6.

Sub-par sales

GM spokesman Chris Lee told several media outlets that the latest decision was made to "maintain the right inventory levels" and "meet demand."

Volt sales have not reached the levels GM predicted before the car went on sale in December 2010. The company expected to sell 10,000 Volts in 2011, but sold a total of 7,671.

More recently, Chevrolet stepped away from its prediction of 45,000 U.S. Volt sales during calendar 2012, saying it would build Volts to meet demand.

Volt sales in February were 1,023, a 70-percent rise over January's 603, but at the end of February, the company had roughly 3,600 Volts in dealer stock. That figure--which differs from totals reported elsewhere--comes from Alan Batey, vice president of Chevrolet sales and service, as quoted in the Detroit News.

Target: 60 days of sales

The ideal supply is 60 days' worth of any model, and 3,600 Volts represents more than twice the desired number at the car's current average sales rate.

Following its bankruptcy and restructuring, General Motors has been relatively careful to keep its inventories in line, building only those vehicles it can quickly sell.

Overproduction was one of the (many) things that got Detroit automakers in trouble before the market collapsed. They kept too many factories rolling, rammed cars down dealers' throats, and resorted to huge discounts to "move the metal" that had been parked in stadium lots all over Michigan.

Cadillac coupe coming

So despite the Volt's status as GM's slightly tarnished halo car, the company wants to keep the supply of Volts at 60 days, not more. Sales being what they are, it would be folly to build more Volts than what's needed to keep that 60 days in inventory.

Cadillac ELR

Cadillac ELR

Enlarge Photo

Until assembly of the 2014 Cadillac ELR range-extended luxury coupe is added to Hamtramck next year, the plant's plug-in production will vary with Volt sales (and those of its lower-volume European sibling, the Opel/Vauxhall Ampera).

And hard as it is for Volt fans to hear, GM is making the right decision by maintaining production discipline.

It's been a tough year for the car, with garage fires, a Congressional hearing into a battery-pack fire three weeks after a NHTSA crash test, and a relentless drumbeat of often uninformed criticism of the Volt for partisan political purposes.

'Political punching bag'

“We did not design the Volt to become a political punching bag," GM CEO Dan Akerson told the Congressional panel in January, but "that’s what it’s become."

Volt advocates, meanwhile, may want to brace themselves for more questions from an ill-informed public.

The not-very-Volt-friendly Drudge Report had no fewer than three Volt headlines trumpeting the production halt by "Gov't Motors" and highlighting the "layoffs" of 1,300 GM employees. (They haven't been fired or let go; they'll all go back to work after the hiatus.)

Or as Volt owner Andrew Byrne wrote late Friday, "Well that sure didn't take long. A friend just called to tell me he heard on the news that 'GM cancelled the Volt and laid everyone off at the factory.' He concluded the message with '...guess you ended up with a modern Edsel.' Awesome."

It may prove to be a long five weeks.

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Comments (36)

  1. Chris O avatar Chris O Posted: 3/5/2012 6:25am PST

    Anemic Volt/Leaf sales in the past months already indicated that plug-ins aren't really taking off. No doubt the anti Volt crusade of conservative politicians and media outlets didn't help Volt sales, but the even worse sales of the Leaf suggest that's not the only problem. Surprised not to find a question to the readers at the bottom of this article about how we see the future of Leaf/Volt, or is that just reserved for Tesla? Since Tesla sales are actually pretty good if pre-orders are any indication the question seems even more warranted for the Nissan/GM plug-in offerings.
     
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  2. Chris O avatar Chris O Posted: 3/5/2012 6:28am PST

    So here goes:
    Volt: how committed is GM to the Volt? It already served it's purpose of helping to warrant the bail out, the vehicle is very popular with the Obama administration. But is there a long term vision like Toyota had with the Prius? Let's hope so. If not and Ampera sales can't save the day I expect GM to pull the plug on the Volt within a year. Unless Obama wins the election in which case political considerations would make continuation of the program the best strategic move.
    Leaf: no doubt about real vision and commitment here. If sales don't pick up I think Ghosn will largely cancel Leaf production in Smyrna TN and bank on the next gen with better battery tech and slowly changing attitudes in the market for long term success.
     
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  3. cracovian avatar Red Baron Posted: 3/5/2012 7:03am PST

    I don't think Tesla will do any better if Volt/LEAF sales don't pick up. I'd be sad to be just one of the few but I realize that the entry price may just be too steep for pretty much everyone. They need to come out with 10K rebates on these things (it works for the pickup trucks) and go for the economies of scale before it's too late...
     
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  4. Chris O avatar Chris O Posted: 3/5/2012 8:23am PST

    Tesla operates in a market segment where price is less of an issue.

    A significant price cut could save the day for Volt/Leaf but I doubt GM could afford it. The Volt is a very complex car with it's double drivetrain architecture so it's always going to be expensive to build. A price reduction could mean GM no longer covers marginal cost of production meaning they loose money on every extra unit they produce.
    For the Leaf it might be the ticket though, especially if production costs get lower once US production gets on line (which it seems they needn't bother anyway if they don't reduce prices).
     
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  5. cracovian avatar Red Baron Posted: 3/5/2012 10:14am PST

    GM needs to re-engineer the darn thing to add the fifth seat. And, yes, flood the market and lose money for the first couple of years - it worked for Toyota. They're losing money right now. Billions poured into research and now workers taking 5 week vacations because there are a few thousand Volts sitting at dealer lots...
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  6. Yanquetino avatar Mark Larsen Posted: 3/5/2012 6:42am PST

    I wonder if the majority of those 3,600 Volts on dealer lots are the earlier model that doesn't qualify to use HOV lanes. If so, I can understand consumers passing them up, now that they know the newer alternative would allow them that access.
     
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  7. fb_100002544459353 avatar Ramon Leigh Posted: 3/5/2012 6:45am PST

    This won't be the last halting of the Volt production line. How can a factory that produces so few cars make any sense? GM has only themselves to blame for the Volt's problems: "It's the car, stupid!" It's not a political thing, which has become the silly excuse to explain why folks don't want to buy a car worth $13K but which has a $42K sticker on the window. Low Volt sales? Gee, what a mystery.
     
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  8. cracovian avatar Red Baron Posted: 3/5/2012 7:41am PST

    I see you keep repeating that same crap over and over again last time comparing the LEAF to the Korean budget car. Take a look at either one of them and then take a ride in a 20K compact (that's where they start realistically these days) to see for yourself. They're more expensive but with high content and quality. The question to ask is if you want to offset the operating cost with the higher entry price. However, most people can't get past that since their reasoning and math skills stopped in the 4th grade (studies now clearly indicate the clear link between low intelligence and "conservative" values.)
     
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  9. robok2 avatar robok2 Posted: 3/5/2012 8:25am PST

    Same old nonsense, of course, since RL never stops by once he's been corrected mnay times, as he always is.

    For months, you've bragged about how the LEAF would outsell the Volt and the Volt should be killed due to low sales, but somehow, when the LEAF sells fewer units, not more, no comments from you about ending the LEAF.

    Also love the ridiculous $13k comparison point when a decently loaded Cruze is about $22k. Ignores the tax credit, check. Ignore fuel savings, check. Ignore the battery warranty, check...

    If the Volt is work $13k, what does that make the LEAF worth? But you're not interested in reason, only your usual hit-and-run attacks not based in reality.

    And again, the Malibu goes into production there this year. Again & again.
     
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  10. YelH2Hummer avatar Eric Salyer Posted: 3/5/2012 7:03am PST

    People must love giving there money to big oil.
     
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  11. Chris O avatar Chris O Posted: 3/5/2012 7:39am PST

    I doubt it but no doubt Big Oil loves to hear about the Volt's woes.
     
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  12. CDspeed avatar CDspeed . Posted: 3/5/2012 8:42am PST

    Maybe this is big oil at work. Though an excellent car, I can't help wondering if some of the trouble the Volt has caused the EV movement was planned. GM themselves in the beginning called the Volt a plug-in hybrid so this problem would be a slow selling hybrid, but in changing their marketing strategy to try and call it an EV its now dragging down the reputation of all other EVs currently available.
     
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  13. Chris O avatar Chris O Posted: 3/5/2012 9:26am PST

    Good luck proving direct Big Oil involvement in current anti plug-in FUD campaigns. Oil companies do predict a marginal role for plug-ins for decades to come though and they certainly have the money and power to make these predictions come true.
     
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  14. cracovian avatar Red Baron Posted: 3/5/2012 7:43am PST

    The problem is that the ones who can't afford to subsidize Exxon can't afford electric cars either. The richer folk still prefer to move their fat @ss in the Tahoe and will pay for gas as needed.
     
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  15. Chris O avatar Chris O Posted: 3/5/2012 8:30am PST

    I do think that sums up the problem of non premium EVs in a nutshell. So maybe the Cadillac ELR could save the day for GM? Doubt they'll risk another "punching bag" at this point. Maybe they should have started premium to begin with, but that wouldn't have worked for the government I suppose.
     
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  16. john_v avatar John Voelcker Posted: 3/6/2012 3:45am PST

    @Chris O: Not sure what you mean by "worked for the government." As has been amply documented, the White House auto-industry bailout team wanted to kill the Volt, which had been conceived and developed long before the bankruptcy, because it wouldn't be initially profitable. Lutz and others fought hard to keep it, and managed to convince the task force.

    But please don't repeat the "Evil Gummint Forced GM To Build The Volt" canard that we hear from certain segments of the "media." Your comments indicate you're much smarter than that. :)
     
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  17. Chris O avatar Chris O Posted: 3/6/2012 9:33am PST

    I wonder what people mean by "the" government. Does a taskforce represent "the" government? The same government that decides to reserve $25 billion for the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program and subsequently only spends a quarter of those funds while initiatives like Bright Automotive are kept dangling until they die in what appears to be a very deliberate strategy (well,according to Bright anyway...)? I think things are very complex when it comes to "the" government.
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  18. ev_enthusiast avatar EV Enthusiast Posted: 3/5/2012 8:14am PST

    gm has never wanted evs, and they still dont. anyone with half a brain can see the evidence of their marriage to big oil.

    you really cant talk about the prices until the supply catches up with demand. are there still not people waiting for their leaf ?
     
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  19. Chris O avatar Chris O Posted: 3/5/2012 9:51am PST

    I do believe that a guy like Bob Lutz really believes in the Volt just like former GM CEO Roger Smith really believed in the EV-1 all those years back. Lutz considers the Volt his legacy at GM and I doubt he wants to be remembered as creator of the 21th century Edsel. But leadership changes, circumstances change and strategies change and there are always opposing forces if you want to do something new and possibly disruptive.
     
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  20. ev_enthusiast avatar EV Enthusiast Posted: 3/5/2012 9:39pm PST

    dont kid yourself. actions speak real intent.

    i dont know about any particular individual, but i certainly know about gm, as a company.

    they killed the ev1, when people loved it. they came out with a hybrid, when they had a chance to come out with the leaf.

    and not until coda was really gonna come out with a car, did gm and the other bigger car companies actually hop on the bandwagon.

    gm announced the spark, a real ev - let's see if it arrives. believe me, it wont arrive unless gm is forced to keep up. they are not gonna be pushing the envelope.

    nissan has shown that they have real intentions of putting out evs. so that is at least one big company on our side. coda isnt big enough to do it alone. neither is tesla.
     
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  21. ev_enthusiast avatar EV Enthusiast Posted: 3/5/2012 9:45pm PST

    and tesla seems content to sell bmw's. that alone, wont have any effect on car companies. we have to hit them where the masses live. the coda, the leaf, the focus, etc. these are the cars that will help the snowflake down the mountain.

    to me, the most interesting thing to see in the near future is what happens to prices when supply catches up to demand.

    PRICE and not range is by far the biggest deterrent. and there is no need for price to come down until supply catches up with demand.

    as i have said many times before, our weakest link in the chain is supply. once we can get that up, then we can better evaluate where the ev industry stands.

    the bottom line is that if the bigwigs desire, gas cars can go away at any moment.
     
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  22. ev_enthusiast avatar EV Enthusiast Posted: 3/5/2012 9:47pm PST

    all they have to do is lower the price. if evs and ices sold for the same amount, ices would disappear tomorrow.

    the industry knows this. and it is gonna take years for the industry to change, assuming it wants to change.

    the decrease in price will exactly mirror the rate at which evs replace ices.

    at its heart, a very simple model.
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  23. CDspeed avatar CDspeed . Posted: 3/5/2012 8:59am PST

    Sadly lack of knowledge and negative press paid for most likely by big oil are doing a great job of keeping people who refuse to do any research on what they drive, scared of plug-in cars.
     
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  24. fb_100000502624690 avatar John McVicker Posted: 3/5/2012 10:57am PST

    Just what does "taking off" mean? Why not say that sales are not going to match some wild guess someone made in a meeting.

    1500-2000 Plug in total PiHVs (Volt, Leaf, i-MiEV and Karma, etc.) per month is fantastic and is a move in the right direction. Every car sold is one more marketing tool to help people get to know this more-complex technology.

    Should it be 10K one year, 50K the next? How about 10K, then 20K and then 35K and so on. It's unrealistic to have expected 45K units built and sold in the USA in 2012. That was GM's only problem. Unrealistic expectations.

    If the Volt was $32K MSRP before incentives - it would sell 3000/month. Gas > $5/gallon will help sell Cruze, Sonic. People can't get past MSRP in thinking.
     
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  25. cracovian avatar Red Baron Posted: 3/5/2012 11:48am PST

    That's a very nice and positive comment. However, the major concern is that they'll kill the car due to low sales and it will screw everything up including any positive public reception. The spillover effect will affect other models including LEAF, the i, and whatever is next (plug-in Prius is sort of bogus and it will not suffer - those things will always sell because they're gas-powered.) It's a sensitive time but hopefully it's nothing more than a bump in the road.
     
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  26. fb_1425304620 avatar Joe Foerster Posted: 3/7/2012 12:46pm PST

    Whether or not GM kills the Volt, EVs and hybrids are not going away. Our household includes one 2011 Volt and one 2012 BMW Active-E. When BMW announced the Active-E lease program, 700 cars were up for grabs and within a few days over 2000 people were trying to grab them. But those who say MSRP gets in the way are right. So here's our approach. When people ask how much the Volt cost, we tell them how much a month our lease is. That puts it on a more even footing. A lot of people can handle a lease payment of $300 to $500 a month but will choke if you tell them what the full retail price is of the cars that lease for that. I also like to add the fact that fuel costs for the month only add about $35 to the cost of having a Volt.
     
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  27. fb_100001118863474 avatar Richard Yeager-Stiver Posted: 3/13/2012 10:17am PDT

    I agree. Forget the price tag and tell them your monthly payment. Mine is just over $2xx, and I paid nothing down nor security deposit. But, I've discovered when I tell folks the crazy low price I pay they still say it is too much. Really?! This is $34 less per month than my monthly payment when I purchased a new 2004 Grand Am. Add that I paid $120/month in fuel and $20/year on oil changes - Leasing the Volt is $156 per month cheaper (with monthly payment).
     
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  28. fb_1001015277 avatar John Briggs Posted: 3/5/2012 3:09pm PST

    Firstly, this is huge news, and not in a good way.

    Secondly, I was wrong. I really thought that in 2012, volume sales would pick up now that the Volt and LEAF are available in 50 states. It is clear now (only here in March) that it is not going to be a great year for EVs.

    Thirdly, where is all the government and fleet commitment to the Volt. Where are all the promised purchases from GE, etc.
     
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  29. Chris O avatar Chris O Posted: 3/6/2012 12:08am PST

    About government commitment: don't bank on it.

    "US General Services Administration purchases of hybrid and electric models fell 59 per cent in fiscal 2011" that includes a paltry 145 Volts.

    Source:http://www.business-standard.com/india/news/obamas-green-car-plan-hits-speed-bump/465990/
     
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  30. Chris O avatar Chris O Posted: 3/6/2012 9:36am PST

    @ John Voelcker: another example of the complexities of "the" government: Obama making multiple visits to the Volt plant an saying he will buy one some day while his bureaucracy mostly shuns the vehicle.
     
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  31. Evergreen avatar So Evergreen Posted: 3/6/2012 10:44am PST

    So 7,671 Obama Supporter was all the Administration could drum up to buy this Car. Really, I figured all his supporters would rush right out and buy one! Wow guess not! So does that mean that the BAIL OUT for GM was a flop!! Yessssss. Green cars are good but you cant ram them down peoples throats. This is a decision that takes time to do. I love Green.. But am not ready to give up my Gas powered Car (which is paid off) to go into debt for this thing... I like my car!! And when you figure the Gas prices verses Car Payment... My car wins hands down. To many people are in the same boat, cant afford the thing! And some wont buy it even if they could, I don't care how Green they think they are!..BAIL OUT again no! Reduce Gas Prices Yes
     
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  32. fb_1001015277 avatar John Briggs Posted: 3/6/2012 11:52am PST

    I think GM's success as a company does not rest on the Volt. GM is doing very well thank you.
     
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  33. ev_enthusiast avatar EV Enthusiast Posted: 3/7/2012 1:12pm PST

    you mean like being bailed out by the taxpayers ?
     
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  34. jeffhre avatar Jeff Hre Posted: 3/6/2012 12:14pm PST

    Replacing 5% of gasoline with ethanol and putting 18,000 highway capable EV's on roads in the last 14 months, that will replace nearly 5 million gasoline miles a month with electric propulsion, should all things being equal, put downward price pressure on gas.

    Probably why the Bush Administration set those things up, with a Republican Congress no less. Look it up, Obama only took office in '09 if you don't believe it.

    The bail out is a completely separate issue. And what incumbent technology just disappears overnight. Certainly not gas engine cars.
     
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  35. USAFANG67 avatar Matt Mann Posted: 3/6/2012 11:42am PST

    GM has mud all over their face with the Volt that will take quite some time to get rid of.
    They,GM, has no one to blame except themselves.
    I still say GM should have named this thing "Re-Volt" instead of "Volt" ;-)
     
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  36. JamesFrenkline avatar JamesFrenkline Posted: 3/7/2012 3:08am PST

    Well its a fantastic effort by GM. It's really looking like an imagination but it's true.
     
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