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General Motors halts production of hybrid Volt as sales flatline

GM announces it will stop making its award-winning Chevy Volt for five weeks, but company’s overall sales unlikely to slow

General Motors will suspend production of the Chevrolet Volt for five weeks this spring, a spokesman said on Friday.

Disappointing sales of the award-winning plug-in hybrid electric car have left the car firm with too many Volts. Production of the US car and its European version, the Opel Ampera, will be on hold starting 19 March and 1,300 workers will be temporarily laid off. They are expected to return to work on 23 April.

Last month at the United Auto Workers conference Obama told car workers that he intended to buy a Volt when he leaves office.

“Volt sales increased in February as compared to January, but we still need to maintain our inventory levels and so we’re taking this action,” GM spokesman Chris Lee said. “We’re going to build to market demand.”

At the end of February, Volt inventory stood at about 3,600 vehicles, which does not include in-transit vehicles.

Car sales in general have been picking up in the US for two years, aided by a shift to more fuel efficient vehicles. But sales of electric and hybrid vehicles have been disappointing.

Auto sales were up more than 10% in the US last year. But sales of “alternative power source light vehicles” rose just 2.3%, according to the analysts WardsAuto.

The Volt was car of the year at Detroit’s 2011 auto show, beating Nissan’s all-electric Leaf for the title. But neither car proved a hit with buyers. GM had aimed to sell 10,000 Volts in its first year but sold 8,000.

In January GM vice chairman Steve Girsky said the company would wait until June to decide whether to cut back on production of the Volt if sales remained subdued. senior analyst Michelle Krebs had a more historical take on the car. “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,” he said.

“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.”

The decision to cut Volt production is unlikely to dent GM’s overall US sales, which have been growing steadily since the firm emerged from bankruptcy in 2009. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds