General Motors is lowering the output of the Chevrolet Sonic and Buick Verano small cars, which inventories have reached higher-than-normal. GM plans to idle output at its Orion Assembly plant in suburban Detroit in the weeks of Feb. 16 and April 6 to adjust supply to market demand, two people privy with the production schedule told Automotive News.
One of the sources said the company has already informed workers of the planned downtime. The production reduction comes as inventories reached their highest levels at their highest level in a year in the US -- a 127-day supply as of January 1, or 26,600 Sonics.
On the other hand, inventories of the Verano reached an 84-day supply as of January 1, or 9,800 units. The Orion site is home to around 1,800 workers. GM announced in November a plan to lay off around 160 employees at the site this month as it cuts production.
A source told Automotive News that a slowdown in the assembly line rate would cut overall output at Orion by about 16 percent, from 45 cars per hour to about 38.
According to Kelley Blue Book analyst Karl Brauer, small-car sales had on the drop even before fuel prices were declining, as more consumers choose small SUVs.
He noted that shift to small SUVs is further pushed by dropping fuel prices. GM sold 9 percent more Sonic – both in sedan and hatchback models – in the second half of 2014 to 93,518, while subcompact cars overall grew 8 percent. On the other hand, sales of the Verano dropped 4 percent, to 43,743.