General Motors announced it is putting production of Chevrolet Volt on hiatus for five weeks according. The auto giant made this decision due to flat sales of the car in the market. As a result of this temporary production shutdown, employees on the Volt assembly line can expect layoffs. Although the sales have recently improved, the company says it still has an excess inventory of the hybrid.
"We're going to build to meet market demand, and while we're optimistic, we're not able to maintain regular production,” the spokesman from the company, Chris Lee said in his statement. The GM’s Detroit Hamtramck plant will be closed from 19th of March to 23rd of April.
Analysts feel that the company had set a sales target that was to high for the current economy and buyer hesitation about hybrid autos. According to Jessica Caldwell, an analyst at Edmunds.com which is a website for auto research, the sales target was very aggressive i.e. 60,000 sales in the year. "It was a niche vehicle using technology people were not familiar with. I don't think it has appeal to a large enough audience," Caldwell said regarding the car design and architecture.
Chevy Volt is a car by General Motors that is an experiment and the company does not want to follow the earlier strategy of continuing the production even if demand drops. They want to make it a valuable addition to their brands and therefore are considering letting the already built cars sold out before new ones are made.
General Motors is considering several options to improving the Chevy Volt sales during the suspension period so that they can meet clear out the current inventory. Consumer concerns about the car’s technology, performance and affordability need to be addressed before the Volt can earn a profitable part of the market. “Even with sales up in February over January, we are still seeking to align our production with demand,” Chris Lee said while announcing the decision by GM.
Although the continuously rising fuel prices are a big issue for the car owners, many are reluctant to switch to the hybrid cars because the technology is new and performance is not tested. Consumers have questions regarding the safety of electric cars. The Chevy Volt had its share of safety issues, but those have been resolved by GM after making changes in the car engine’s design.