Chevy Idles Cruze Production As Inventories Build

Edward Niedermeyer
by Edward Niedermeyer

GM has made much of the fact that its Chevrolet Cruze compact has enjoyed strong sales this year, but volume alone isn’t enough to make it in today’s car industry. The key to profitability is keeping production in line with sales, so that plants don’t overproduce, in turn forcing profit-sapping incentives to move the metal. And, as these charts show, GM has been having success selling the Cruze, but not to the extent that it needs to keep production at its current levels. The graph above shows monthly production and sales levels for this year, and it shows that GM has already tried to adjust production once to keep it in line with slower-than-expected sales. But that wasn’t enough. With sales volume dropping the last four months in a row, and inventory jumping from 33 days to 43 days in the month of October alone, the UAW is reporting that the Lordstown plant where Cruze is built will be idled for the entire week of November 28. According to the announcement

The down week is necessary to align production with current market demand. The scheduling modification is attributed to traditional seasonal buying behavior coupled with competitors’ recovering inventories previously impacted by the March earthquake in Japan.

Like a lot of recent Detroit products, the Cruze has received a lot of positive press due to its giant improvement in quality and sales compared to its predecessor. But with demand softening, and GM’s brass fretting over profitability margins as the market shifts to smaller cars, it’s clear that the Cruze’s ultimate success has yet to be proven.

Edward Niedermeyer
Edward Niedermeyer

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  • UnclePete UnclePete on Nov 12, 2011

    Earlier this year, I was in the market for a new commuter car. I decided to not repeat the mistake of buying a one trick pony like the 2007 Prius I had (good gas mileage, but a couple of niggly electrical problems, poor comfort for long trips, and dangerous winter traction, with the inability to turn traction control off.) After testing several cars, I settled on a Cruze Eco with the manual transmission. In the 6 months I've owned it, I've put almost 12,000 miles on it with zero issues. We used it for a 2000 mile vacation trip from New England to the hottest summer weather in DC, then to PA and MI without a complaint. It's one of the more comfortable cars I've ever owned, especially for a small car. My overall fuel mileage is 39.8mpg, which doesn't hurt either. I don't always agree with some magazines like Consumer Reports. While my sample size is a lot smaller, I'll give an example. They rate the 2002 Olds Alero as a poorer than average performer and the 2002 Toyota Camry a much better than average performer. My wife has a 2002 Alero, and the only non-wear parts we've replaced are the front tie rod ends. My ex-wife has a 2002 Camry, and it's going to the shop every other month, mostly for engine and electrical issues. Both cars are almost identical mileage-wise (around 150,000 miles) We pay a small fraction of maintenance cost on the Alero compared to the ex's Camry.

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    • Zykotec Zykotec on Nov 14, 2011

      I'll give GM one thing, some of their older cars could take abuse that any japanese vehicle besides the HiLux wouldn't even dream of taking on. My brothers J-body Opel Ascona was one of the more durable (not the same as reliable) cars I've witnessed. And that's one of the reasons older Opels are competitive in banger racing/autocross , and as field cars and winter beaters. You can jump and shunt and j-turn and handbrake turn an old Opel 'till the cows come home' or whatever... Most Civics or Accords will split in half if you even tried stuff like that. On the other hand, most Japanese cars would actually start and run in the first place, and still be in such a condition that people wouldn't abuse them in such ways...

  • Mjz Mjz on Nov 12, 2011

    Memo to GM: Gee, why not add the Cruze hatchback to the North American portfolio? There are many people in this segment that are buying your competitors cars (Focus, Mazda3, etc.) because you don't offer a hatch version of the Cruze here. Seems like a no-brainer, it's already in production in just about every other market in the world, so you don't have to go back to the drawing board, just start building the damn thing here too. Duh.

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    • Mjz Mjz on Nov 13, 2011

      @carbiz I'm not sure I would look at the Maxx as a true reflection of sales potential for a hatchback Cruze. The Maxx was a weird sort of combination between a station wagon and a hatchback. While practical, it had ungainly proportions and was based on what was a homely (at the time) Malibu sedan. I think Chevy should look at the sales mix of hatch/sedan that Ford has with the new Focus and Mazda with the 3 as a better gauge.

  • Mjz Mjz on Nov 12, 2011

    What does Michael Karesh have to say about Cruze reliability?

  • Caboaz Caboaz on Nov 13, 2011

    GM has a more limited customer base than it had pre-bailout so the old sales models won't work. Whether you agree with them or not there are millions of former customers or potential customers who won't have anything to do with GM due to the government ownership and/or GM's receipt of bailout dollars. Once it sells to those who don't care about GM's recent history it runs into a brick wall of people philosophically opposed to purchasing a GM product for any reason.

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    • Joeaverage Joeaverage on Nov 13, 2011

      @carbiz There are alot of people relatively fixed in their beliefs about politics or cars - take your pick. It's the same when trucks and big engines b/c a topic at work. I do fine with my four cylinder tow vehicle and a light enclosed trailer. I have a Prius driving friend who hates the big trucks. And then I have co-workers who argue they NEED the big truck for this or that occasional use. Whatever. ;)