Demand for Chevrolet Volt Falls in Wake of NHTSA Investigation and Congressional Hearings

Despite its many accolades, including being named the 2011 Motor Trend Car of the Year, sales of the Chevrolet Volt fell below GM’s target of 10,000 units, and now some dealers are turning down shipments of the plug-in electric hybrid.

According to a person familiar with the matter, only 31 of the 104 Volts allocated for the New York market were accepted by the 14 dealerships in the area. However, those same 14 dealers ordered 90 percent of the other GM models they were eligible for.

One California dealership turned down all 12 volts that were allocated for it during December and January. Brett Hedrick, the owner of Hedrick’s Chevrolet, said he sold only 10 Volts last year. Based on the sales record, Hedrick said, “We’ve never sold more than two in a month. Thinking we need six more Volts is just crazy.”

GM spokesman Rob Peterson concedes that Volt orders from dealerships has declined. He attributes the drop in orders to the recent National Highway Traffic Safety Administration investigation into the potential fire risk from the vehicle’s lithium-ion battery pack.

The NHTSA probe was initiated after three Chevrolet Volts caught fire after undergoing crash safety testing.

The NHTSA concluded its investigation last week and announced that it had concluded that the Volt’s battery pack presents no significant fire risk. However, a House Oversight subcommittee is now investigating why it took federal regulators took months to make its investigation known.

Testifying before the subcommittee on Wednesday, GM chairman and CEO Dan Ackerson said, “We did not design the Volt to become a political punching bag and that’s what it’s become.” During his testimony, Ackerson also pointed out that there have been no reports of fires from actual Volt owners.

Peterson said, “There’s a lot of misinformation that has swirled over the past month. Dealers are kind of waiting for things to settle down.”

GM has offered to furnish loaner vehicles to Volt owners who wish to have the vehicles retrofitted with new safety devises aimed at lessening the chances of fires if their battery packs are damaged in a collision.

Speaking with reporters at the North American International Auto Show in Detroit last week, GM executives said they will simply build enough Volts to meet customer demand instead of aiming for their previously stated goal of selling 60,000 units this year.

According to GM North America president Mark Reuss, the company won’t have an accurate gauge of consumer demand for the Volt until the second quarter of this year.

The Volt was launched in seven U.S. markets in late 2010 and GM began offering the model to dealers nationwide last autumn.  During calendar year 2011, GM sold only 7,671 Volts in the U.S.

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