Although General Motors has started the year with big plans concerning its presence in the fuel efficient auto market, so far things didn’t go as good as expected. The automaker has restarted production at its plant for the Chevy Volt in late February only to announce days later it will have to cut the vehicle’s production to reduce costs.
Basically, General Motors is trying to reduce its costs by avoiding a price discount. As a result, General Motors has decided to stop production at its plant in Hamtramck, Michigan for about five weeks, between March 19 and April 23.
Chris Lee, spokesman for General Motors, stated in an e-mailed statement that the decision is an attempt “to keep proper inventory levels”. When GM first started the Chevy Volt production this year, Chief Executive Officer Dan Akerson was disappointed in what the company had managed to sell in 2011 and argued that for this year they will try only to keep up with the demand.
For 2011, General Motors was targeting a mark of 10,000 sold Chevy Volts, but it finished the year with only 7,671 sold units. This year, the plan Dan Akerson had was to boost sales at 45,000 in the United States market. So far, it’s not likely the company will reach its target. For instance, in February the company sold 1,023 Volts, a higher level than last year’s same month, but without a doubt not enough to reach the 45,000 mark.
General Motors has been trying hard to boost sales for its hi tech Chevrolet Volt, but the last two months of 2011 wasn’t exactly helpful. The company underwent a two months investigation from U.S. regulators looking at the car’s electric battery under scrutiny for the potential risk of battery fires.
Also the Chevrolet Volt isn’t exactly affordable. While it is true the $7,500 federal tax credit is a nice incentive it is without a doubt not enough for today’s auto buyers. The decision to cut production on its Volt might not change much for General Motors. It seems that until the automaker decides to cut its price on the Volt, sales will continue to remain low.