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Chevrolet Halts Volt Production

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author photo by Colin Ryan March 2012
  • Despite high gas prices, Volt missed sales targets
  • Chevy temporarily halting Volt production
  • But don't look for big discounts just yet

Gasoline is on course to cost $5 a gallon by the summer. "General Motors, Ford and Chrysler are all reporting solid gains... from their fuel-efficient offerings," said Alec Guttierez, senior analyst with Kelley Blue Book.

Against this seemingly favorable backdrop, the Chevrolet Volt plug-in hybrid/electric vehicle has seen relatively disappointing sales. The company had a target of 10,000 sales in 2011, but only managed to move 7,671 units.

And then there was the adverse publicity last November surrounding incidents where a Volt's battery pack caught fire after crash testing. Some dealers decided not to take every Volt they were offered. "Dealer ordering is down," said spokesman Rob Peterson, adding that many were "waiting for things to settle down."

The result is a suspension of production, with 1,300 workers temporarily laid off from March 19 to April 23. "It's just for five weeks, to keep proper inventory levels," according to spokesman Chris Lee. This would alleviate situations like the one in the New York City area, where Chevrolet had allocated 104 cars to 14 dealers for December 2011, but only 31 were taken.

The laws of supply and demand being what they are, it would not be unreasonable to think there might some incentives coming to make the Volt's hefty $39,995 MSRP (before a federal tax credit of $7,500) more appealing.

"We're not discounting the Volt," said Matt Hibben, sales manager of Harbor Chevrolet in southern California's Orange County. "No need to. I have seven on order that are all pre-sold and there's no delay in delivery. The Volt is still a pretty popular car."

It's a similar story from Rick Corso, manager at Putnam Chevrolet Burlingame supplying GM vehicles to the San Francisco area. "I took delivery of ten Volts today and they are all are pre-sold," said Corso. "It's a great car. I'm not worried about this brief suspension of manufacture at all."

A two-month investigation by the National Highway Traffic safety Administration (NHTSA) found that the Volt poses no more fire risk than any other car and approved modifications carried out by GM to "reduce the potential" of any further combustion complaints.

Perhaps the gas price situation might also revive the Volt's fortunes. It is, after all, General Motors' most fuel-efficient car; EPA estimates have it returning the equivalent of 94 mpg.

Chevrolet sold 1,626 Volts in the United States during the first two months of 2012 (more than half that amount in February) and has plans to manufacture between 45,000 to 60,000 this year - with 75 percent destined for the home market.

But if sales continue to be slow, don't be surprised if Chevrolet and its dealers find some wiggle room in the Volt's price.

What it means to you: If Volt fails to attract an audience beyond the early adopters, Chevrolet may have to lower the price to give it broader appeal.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Chevrolet Halts Volt Production - Autotrader