GM’s Chevy Volt Will Miss 2011 Sales Target Amid Slow Growth

GM’s Chevrolet Volt
Chevrolet Volt cars move down the production line at General Motors Co.'s Detroit-Hamtramck Assembly plant in Detroit, Michigan, U.S. Photographer: Jeff Kowalsky/Bloomberg

General Motors Co.’s Chevrolet Volt will miss its sales target of 10,000 cars this year, the company said. While dealers sold 1,139 of the plug-in hybrids last month, the company is more than 3,800 shy of its 2011 goal.

“It appears we will deliver the 10,000th Volt in early 2012,” GM Vice President of U.S. Sales Don Johnson said today in a conference call with reporters. “We’re not at all disappointed. You have to continue to build awareness.”

While GM is expanding annual production to 60,000 units starting in January, the Volt is being investigated by the National Highway Traffic Safety Administration because its batteries caught on fire in the weeks following three government crash tests. NHTSA announced a safety probe of the Volt Nov. 25.

Chevrolet has been making a marketing push as dealers begin the third month of selling the Volt in all 50 states. GM last month allowed dealers to sell as many as 2,300 demonstration models to retail buyers, helping spur a 2.8 percent increase from October and the model’s best month yet. Volt sales through November totaled 6,142, the company said.

“That’s not as much as I would have expected,” said Alan Baum, principal of Baum & Associates, a research firm in West Bloomfield, Michigan. “I would think that they would have been able to work down their waiting list. That’s not a good result.”

More Inventory

Baum said he didn’t think the safety probe hurt Volt sales because NHTSA’s official investigation was announced late in the month.

GM aims to sell 45,000 Volts in the U.S. next year and export the remaining 15,000.

At the end of November, Chevy had 4,000 Volts in inventory, said Alan Batey, vice president for Chevrolet U.S. sales. The demonstration cars built up inventory later in the month and will have a bigger impact on December sales, Batey said.

Chevy sold 600 Volts to fleet customers this year, Johnson said.

The Volt investigation has the potential to harm the reputation of electrified vehicles. Lithium-ion batteries, such as those used in the Volt, are also installed in all-electric cars, such as Nissan Motor Co.’s Leaf and models made by Tesla Motors Inc.

Automakers and U.S. and California regulators are looking to increased use of electric power to meet tightening U.S. fuel-efficiency standards.

A Volt caught fire three weeks after a May 12 side-impact crash test while parked at a NHTSA testing center in Wisconsin, leading regulators to conduct more tests.

Nissan, Tesla

Nissan has said that it has had no reports of fires in its Leaf electric car. Tesla also said it hasn’t had a fire in its Roadster electric car.

The Volt can go about 40 miles on electricity before its gasoline engine kicks in and powers a generator, which recharges the battery. It has a range of 379 miles with electric and gasoline power combined. The Volt’s battery can also be recharged at an electrical outlet.

The U.S. Environmental Protection Agency last year estimated the Volt would average 60 miles per gallon in combined gasoline-electric driving, compared with 50 mpg for Toyota Motor Corp.’s Prius. Volt’s range is about four times what Nissan’s Leaf travels on a single charge.

Loaner Cars

GM is trying to reassure customers. North America President Mark Reuss sent a letter to Volt owners on Nov. 28 saying that if they have concerns about their safety, the Detroit-based company will provide them with another model as a loaner until the U.S. investigation concludes.

So far, 33 Volt owners have asked for a loaner, Batey said.

GM also is willing to buy back Volts from any owners who are concerned for their safety, said Greg Martin, a spokesman. The Associated Press reported the development earlier, citing an interview with Chief Executive Officer Dan Akerson.

The automaker has engineers working with NHTSA to establish the cause of the fires and no conclusions have been reached, the company said this week.

The Volt was the highest-ranked car in Consumer Reports’ owner-satisfaction survey, taken before the U.S. probe was announced. The magazine said 93 percent of Volt owners who responded said they would buy the car again. The plug-in hybrid finished ahead of the Dodge Challenger and Porsche 911 sports cars, each of which had 91 percent owner-satisfaction scores.

The Volt’s technology and its recent accolade from Consumer Reports make the Volt a marketing tool for Chevy, Batey said.

“This vehicle is about more than how many we sell,” Batey said. “This vehicle is a magnet around everything we are trying to do to showcase our brand.”

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