GM Says Dealers Told to Stop Selling Some Chevrolet Cruzes

Mar 28, 2014 4:17 pm ET

(Updates with closing share price in final paragraph.)

March 28 (Bloomberg) -- General Motors Co. said it has instructed dealers to stop selling some 2013 and 2014 Chevrolet Cruze compact cars with 1.4 liter engines while not saying why the halt was ordered.

Greg Martin, a spokesman for the Detroit-based automaker, said the company told its Chevy stores this week to stop selling those Cruze compacts. He declined to say why. The order affects only 20,000 1.4 liter gasoline-turbo cars, or about one third of all Cruze inventory at dealers, GM said.

The Cruze isn’t part of the recall of 1.6 million cars that GM has been dealing with in the past month after faulty ignition switches were linked to the deaths of 12 people. Chief Executive Officer Mary Barra is scheduled to testify next week before panels of the U.S. House and Senate about why it took the automaker more than a decade to fix the cars after the first customer complaints.

“The timing of this stop-sale order might appear unfortunate given the publicity surrounding GM’s ignition switch recall, but it actually illustrates a new approach by the automaker,” Karl Brauer, a senior analyst at car information company Kelley Blue Book, said in a statement. “Rather than waiting for a full understanding and planned fix for the Cruze, GM is apparently stopping sales at the first sign of a problem to remove the potential of endangering customers.

GM recalled 1.76 million additional models not related to the ignition switch flaw on March 17 in what the company said was a sign it would recall vehicles sooner and with less study than in the past. Barra also appointed Jeff Boyer to the new position of vice president of vehicle safety to give more focus to the topic.

Automotive News earlier reported the stoppage of some Cruze sales.

GM’s shares rose 0.6 percent to $34.73 at the close in New York.

--With assistance from Jeff Green in Southfield, Michigan.