GM Extends Plant Shutdown Due to Overstock of Bolts and Sonics
Swelling inventories and slow sales spell bad news for the Orion assembly plant.
GM has been having an inventory supply issue—and for some vehicles, it’s getting worse. The automaker's U.S. inventory hit a 10-year high last month at 105 days' supply, according to Reuters. GM projected that its inventory would shrink to 90 days at the end of June and a much more manageable 70 days by the end of 2017.
Unfortunately, the supply of the Chevy Bolt swelled from 104 days to 111 between June 1 and July 1. This is partly because the car still isn’t available nationwide, but it’s still a problem when supply is outweighing demand. For example, there’s reportedly a Chevy dealer in Rhode Island with more than 500 new Bolts in its inventory at two locations.
To combat the growing inventories, Reuters reports that GM has decided to extend their shutdown of the Orion Assembly plant in Orion, Michigan. The company has also extended summer vacation shutdowns at Lordstown, Ohio and Kansas City, Kansas which produce the Cruze and Malibu, respectively.
According to a GM spokesman, the extended Orion shutdown is “due solely to softening sales of the Sonic” which is being brutally cannibalized by the Trax crossover. Sales of the Sonic are down about 37 percent so far this year and there’s been no indication that it will be discontinued. Prudently, Chevy wants to keep a full lineup making cars of all sizes so they can be ready for shifts in demand.
It’s hard not to see this as a sign that the crossover craze is here to stay. GM is having no inventory problems with trucks or crossovers; the only plants being slowed down are the ones that build sedans and hatchbacks.
So, if you’re in the market for a Chevy Bolt and you live where they’re currently for sale, you can probably get a sweet deal to help Chevy clear out the inventory.
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