Production of hybrid Cadillac using Volt technology to begin next year

Southfield, Mich. - General Motors said it will begin production of the Cadillac ELR, a two-door, plug-in hybrid that uses Chevrolet Volt-like technology, late next year.

GM will invest $35 million in its Detroit-Hamtramck Assembly plant to build the new model, Mark Reuss, president of GM North America, said in a speech in Detroit. The factory already builds the Volt. Cadillac is GM's luxury brand.

GM's second plug-in hybrid follows the introduction of the Volt in 2010. The Volt, which has a similar version sold under GM's Opel and Holden brands overseas, can travel more than 30 miles (48 kilometers) on electric power before a gasoline engine engages. The automaker has marketed the Volt as a show case of fuel-saving technology.

The ELR will be the production version of the Cadillac Converj prototype shown at the North American International Auto Show in Detroit in 2009.

The ELR joins the ATS and XTS in the expanding Cadillac lineup. GM wants to double the 2010 U.S. sales of Cadillac within two years. The company sold 146,925 Cadillac cars and sport-utility vehicles that year. GM last week named Robert Ferguson to the new position of vice president of global Cadillac.

GM planned to resume production of the Volt at its Detroit- Hamtramck assembly plant yesterday after being idled for four weeks, Cristi Landy, Volt marketing director, said Oct. 10 in a telephone interview.

The return of production comes as Volt inventories fall to low levels, after high fuel prices and discounted leases spurred demand, she said. Disruptions at California refineries since August pushed unleaded gasoline in the biggest U.S. auto market to $4.61 a gallon yesterday, according to AAA. The U.S. average was $3.77.

"We're expecting to sell pretty deep into our California supply, deeper than we would ever want to," she said. "By the end of the month, it's going to be pretty tight out there."

Chief Executive Officer Dan Akerson's original goal for the Volt this year was 60,000 deliveries globally, of which 45,000 would be sold in the U.S. Akerson backed away from that goal in June, saying sales would probably total 35,000 to 40,000.

In August, the company said the Volt factory needed to be idled to match supply with demand.

and to prepare for the production of the Chevrolet Impala sedan, which will also be assembled as the same plant.

As deliveries of the Volt increase, more people are getting exposure to the car and the company's marketing message of fuel efficiency, further helping sales, Landy said.

The Volt has been helped by a version that can take advantage of California's high-occupancy lanes, she said. Battery-only and plug-in hybrids that meet strict California emissions rules qualify for a sticker that permits solo drivers to use the car pool lanes.

"All of those things together are really working in our favor," Landy said. "I don't think you could attribute it just to the gas-price spike. I think we've got a great product that meets needs of people, that's getting a lot more exposure due to growing sales that happens to use very, very little gas."

The company is also offering Volt lease deals starting at $299 a month, she said.



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