2017 Chevrolet Bolt EV electric cars outside dealership [photo: Patrick Reid]
One of the biggest tests of an automaker’s discipline is what it does when sales start to ebb and inventories of unsold cars swell.
Does it keep the production lines churning, and dial up its incentives to keep new-vehicle deliveries flowing?
Or does it prioritize profitability and suspend production until inventories are back where they should be?
General Motors is now doing the latter, after seeing its inventories bulge to 105 days’ worth of sales by the end of last month, according to a report by the Reuters news service, the company’s highest inventory level in 10 years.
Worse yet, looking solely at passenger cars and netting out ever-more-popular crossovers and SUVs, Fortune notes that GM’s inventories were 126 days, as calculated by industry trade journal Automotive News.
That’s more than twice the 60 days’ worth that analysts consider ideal.
First 2017 Chevrolet Bolt EV buyers, Fremont, California: Bobby Edmonds, Bill Mattos, Steve Henry
The factories GM shut down include the Lake Orion Assembly plant where both the Chevrolet Bolt EV electric car and the aging Chevy Sonic subcompact sedan and hatchback are built.
The Sonic’s sales are down 37 percent for the first half of this year over the same period last year.
But not too surprisingly, the Bolt EV gets the headlines in recent news coverage of that plant’s summer shutdown, which GM recently lengthened.
The Reuters report specifically underscores that it’s softening sales of the Sonic that led to the production suspension at Lake Orion:
A spokesman for the company said the shutdown at Orion was “due solely to softening sales of the Sonic” model, adding that its production plan for the Bolt for this year was unchanged.
Chevrolet sold 7,592 Bolt EVs in the U.S. from January through June, as it slowly adding new states to the initial pair of California and Oregon where the car was launched in mid-December.
At that sales rate—which should increase in the second half of the year as all states get their cars, and both dealership personnel and buyers become more familiar with the 238-mile electric car—GM now has a 111-day supply of Bolt EVs at its dealers.
Over the same six-month period, Chevy delivered 17,958 Sonics, almost two and a half times its total Bolt sales.
The Bolt EV, with a base price of $37,500 before incentives, will be available in all 50 states by the end of next month.
The other GM plants whose summer shutdowns were lengthened all build passenger cars, not SUVs: the Chevrolet Cruze compact sedan in Lordstown, Ohio; the Malibu mid-size sedan near Kansas City; and the Impala large sedan in Oshawa, Ontario.