Following weak sales, GM throttles Chevy Volt production
For General Motors, a multimillion-dollar ad during this year’s Super Bowl just wasn’t enough to save its Chevy Volt from lackluster sales.
After less-than-desirable profits over the course of 2011, the company has decided to halt production of the plug-in hybrid car for five weeks starting this month, the Wall Street Journal reports.
During the break, GM executives will focus on making the hybrid a more desirable option for consumers. Part of this initiative will include dropping the monthly cost of leasing the vehicle from $399 to $350. In California, new low-emissions versions of the Volt that qualify for use in the state’s carpool lane will be eligible for an additional $1,500 rebate.
The company will also launch an ad campaign featuring Volt owners addressing misconceptions surrounding the vehicle.
GM still struggles to overcome negative publicity garnered after the National Highway Traffic Safety Administration questioned the safety of the Volt’s lithium-ion battery last fall.
Sharon Terlep reports:
One vehicle caught fire and battery packs in three others sparked or caught fire after severe crash tests by a U.S. regulatory agency. GM said it would modify and strengthen the vehicles, and federal officials cleared the Volt of any safety risk. Executives blamed the extensive media attention that accompanied the investigation for crimping interest and sales earlier this year.
The Volt’s hiatus also raises questions about the success of electric cars in the United States, with some arguing that consumers simply aren’t ready to make the switch.
Much of the reason has to do with the high price of electric and hybrid cars. The vehicles usually cost at least $30,000 due to their expensive batteries. The Volt sells for $41,000 before the $7,500 government rebate—a high price to pay considering GM’s fuel-efficient Chevrolet Cruze starts at just $16,800.
“Consumer demand is just not that strong for these vehicles," Lacey Plache, chief economist for auto-research firm Edmunds.com, told the Wall Street Journal. "The price premium on the Volt just doesn't make economic sense for the average consumer when there are so many fuel-efficient gasoline-powered cars available, typically for thousands of dollars less."
Image: CNET, Video: Chevrolet
This post was originally published on Smartplanet.com