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Weak sales of Chevrolet Cruze Lead to More GM Cuts

Disruption within the automotive industry continues apace as SUVs gobble up market share at the expense of certain sedan models. One of these is the Chevrolet Cruze, sales of which have been melting like snow in the springtime for the past few years. As a result, GM has been forced to eliminate another shift tasked with assembling the small sedan at the company’s Lordstown, Ohio plant.

Around 1,500 of the 3,000 workers at the plant will be affected by the layoffs, which take effect on June 18.

GM had already eliminated a first shift at the plant in January 2017, meaning that two-thirds of the workforce assigned to assembly of the Cruze have been laid off in the past 18 months. GM gave no other explanation than to point at the shifting preferences of consumers.

In a statement sent by email, GM specified that market trends, which are in a period of historically significant flux, are forcing the company to slow the rate of production to re-align itself with decreasing consumer demand. In their view, one shift will be sufficient to maintain supply-demand stability.

According to Automotive News, current inventory of the Chevrolet Cruze – around 45,000 units – is enough to cover 78 days.
This past March, sales of the model dropped by 26% in comparison with last year. In 2017, sales totaled 184,751 units, a decline of 2.2% in relation with the previous year.

The model’s struggles clearly reflect what is happening in the market writ large. 2017 saw sales of cars decline for a fifth straight year. And in the first quarter of 2018, compact cars like the Cruze saw their overall sales decrease by 10% in comparison with 2017. In the same period a year earlier, sales in the category dropped by 5.8% over 2016.

The Cruze is also available as hatchback, but that version is built in Mexico. A refreshed version of the model is expected for 2019.

2018 Chevrolet Cruze
2018 Chevrolet Cruze