Friday, March 02, 2012

GM Halts Chevy Volt Production Over Excess Capacity

GM has halted production of the Chevy Volt after racking up poor sales thus far. Excess capacity has resulted in the production lines being shut down until sales can clear lots.

It's going to suck for the 1,300 workers who are idled as a result of this action.

GM failed to sell 10,000 cars in its first year on the market as it was expected to do - and has fallen behind the Nissan Leaf, an all-electric car. It's also behind projected sales thus far in 2012.

This isn't a good sign for the Volt, but it isn't a death knell.

Part of the problem stems from the pricing of the car - and the fact that while the car may get the first 30 miles on its electric motor, it's gas mileage thereafter is only middling. On long drives, it's much more cost effective to drive a Prius, which is significantly cheaper.

There isn't much else for GM to do at this point, but it should look to inserting a far more economical engine to boost overall gas mileage down the line.

GM is reporting that sales are rebounding while Nissan is reporting a slight slump. High gas prices are seeing a shift in buying preferences, which bodes well for the more fuel efficient vehicles in the automakers' stables.

1 comment:

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