Chevy Corvette latest victim of auto industry downturn

Luxury brands and halo models have in the past been resilient to the effects of industry downturns, usually because of their niche status and high desirability. However, the industry is currently in one of its worse downturns in decades, with the U.S. at the bottom of a 15 year slump in sales. We’ve already seen BMW forced to prune back production of its premium V8, V10 and V12 engines due to low demand, and now General Motors has announced cutbacks for its Chevrolet Corvette.

The carmaker has confirmed that production of the iconic two-seater will be stopped for a period of one week next month, reports Automotive News. After this point, GM plans to lay-off some employees at the Corvette plant in Bowling Green, Kentucky, and drop the assembly line speed from 18.5 vehicles an hour to just 15.

Through the first eight months of this year, Corvette sales fell 8.5% to 21,066 units. They rebounded 47.4% in August after 2008 models were included in GM's employee pricing sale. During the sale, prices for the Z06 – normally listed at $72,125 – dropped by almost ten grand to just $62,653, while there were savings of close to $6,000 on even the base model.

Similarly, the price for the Cadillac XLR-V dropped to $84,771 – a saving of roughly $15,000 – but unfortunately sales still remained dismal with sales last month only reaching 118 units for the entire XLR range.

Nevertheless, offering discounts on their halo car is something GM is reluctant to maintain, thus the production halt may be in anticipation of a further downturn in sales.

According to the president of the local chapter of the United Auto Workers, Eldon Renaud, the production halt will be the first in almost 30 years. Renaud also speculated that up to 75 people could be let go by GM as a result of the production halt, reducing the number of hourly workers from 800 to 725.