GM stops selling some Cruze small cars, offering no reason

Fri Mar 28, 2014 1:06pm EDT
 
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By Ben Klayman

DETROIT (Reuters) - General Motors Co (GM.N: Quote) said on Friday it had told its dealers to stop selling certain Chevrolet Cruze small cars without saying why, in another blow to a company already facing a crisis over defective ignition switches linked to at least 12 deaths.

The automaker said the affected Cruze cars, 2013 and 2014 models equipped with a 1.4-liter turbo engine, are not being recalled. The action only covers the affected models that are unsold on dealer lots, which make up about one-third of the vehicle's inventory at dealers, a GM spokesman said.

The 1.4-liter gas turbo engine accounts for about 60 percent of the Cruze's retail sales mix in any given month, a GM spokesman said. The vehicle also is sold with a 1.8-liter gas engine and a 2-liter diesel engine.

"With GM still in the midst of trying to resolve the recall related to faulty ignition switches on the Chevrolet Cobalt and other legacy models. The last thing they need is a major issue with one of their current high volume production models, in this case, the Chevrolet Cruze," said Kelley Blue Book senior analyst Alec Gutierrez.

Last year, Cruze sales rose 4.4 percent to 248,224 vehicles, making it the 12th strongest selling vehicle in the U.S. market, according to Autodata. Through February, Cruze sales this year were up 19 percent.

"I can just confirm that we put a stop-sale in last night," GM spokesman Alan Adler said.

He said he did not have any details on why the action was being taken, but said stop-sale orders can happen for various reasons. He said stop-sale orders mean the dealers need to do something to the vehicle before it can be sold.

Last month, GM recalled 1.6 million older-model cars globally to replace defective ignition switches that can be knocked out of the "run" position while driving, turning off the engine and disabling airbags and electrical components.   Continued...

 
Cristi Landy, Chevrolet marketing director for small cars speaks during the debut of the 2014 Chevy Cruze Clean Turbo Diesel at the Chicago Auto Show, in this file photo from February 7, 2013. REUTERS/John Gress/Files