Some Chevy dealers turn down additional Volt inventory

Some Chevrolet dealers are turning down Volt EVs that General Motors wants to ship to them, a potential stumbling block as GM looks to accelerate sales of the plug-in hybrid.

For example, consider the New York City market. Last month, GM allocated 104 Volts to 14 dealerships in the area, according to a person familiar with the matter.

Dealers took just 31 of them, the lowest take rate for any Chevy model in that market last month. That group of dealers ordered more than 90 percent of the other vehicles they were eligible to take, the source said.

In Clovis, Calif., meanwhile, Brett Hedrick, dealer principal at Hedrick's Chevrolet, sold 10 Volts last year. But in December and January he turned down all six Volts allocated to him under GM's "turn-and-earn" system, which distributes vehicles based on past sales volumes and inventory levels.

GM's "thinking we need six more Volts is just crazy," Hedrick says. "We've never sold more than two in a month." Hedrick says he usually takes just about every vehicle that GM allocates to him.

GM spokesman Rob Peterson confirmed that "dealer ordering is down" for the Volt. He said many dealers have been waiting for resolution of the National Highway Traffic Safety Administration's investigation into the risk of fires in the car's battery pack. Last year three packs caught fire in the days or weeks following government test crashes.

This month GM announced a voluntary repair aimed at protecting the battery pack. And last week NHTSA said it has closed its investigation, concluding that the battery pack poses no significant fire risk.

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

Hedrick and other dealers say that their GM zone reps aren't pressuring them to take more Volts. "They haven't jammed us," he says. "I think they'll just give them to somebody else."

Industry insiders are closely watching sales of the Chevy Volt and Nissan Leaf as barometers of market demand for electric vehicles. Several other automakers are set to launch EVs this year.

At the Detroit auto show this month, GM executives said they wouldn't chase a previous Volt production target set for 2012--60,000 units, three-quarters of which would be for U.S. sales--and vowed simply to build as many as customers want.

GM sold 7,671 Chevrolet Volt EVs in the United States in 2011, short of its 10,000-unit target. It launched the car in seven key markets starting in late 2010, but didn't begin a national rollout until this past autumn.

"We haven't satisfied demand," GM North America President Mark Reuss said on the sidelines of the Detroit show. He said GM will be able to gauge Volt demand by sometime in the second quarter.

Many dealers say they no longer have customers waiting in the wings

One East Coast Chevy dealer said he agreed to take all five of the Volts that GM allocated to him this month, even though he has seen a "huge dropoff" in customer interest.

"I probably should have taken only one," he said. "Sometimes as a dealer you choose to do things that are good for the company. I believe in the car."

The sales staff at Ourisman Rockmont Chevrolet near Washington, D.C., sold 19 Volts last year. General Manager Dug Dugger says "there are more buyers out there."

He's about to find out. Last week he had 18 Volts en route to his dealership.

Dugger says: "I'm not about to run scared until I have a feel for what the appetite is."

By Mike Colias- Automotive News