But there's one major problem with the story: it never happened. As a matter of fact, Chevrolet did reasonably well with the Nova in Latin America, even exceeding its sales projections in Venezuela. The story of the Chevy Nova is a classic example of an urban legend, a story that is told and retold so often that it is believed to be true even though it isn't. Like most other urban legends, there is some element of truth in the story (no va indeed means "it doesn't go"), enough truth to keep the story alive. And, like many urban legends, the story has the appeal of showing how the high and mighty can by humiliated by stupid mistakes.
Even if you couldn't confirm or reject the story by looking into history, you might notice some problems with it if you understand Spanish better than those who spread the story. For starters, nova and no va don't sound alike and are unlikely to be confused, just as "carpet" and "car pet" are unlikely to be confused in English. Additionally, no va would be an awkward way in Spanish to describe a nonfunctioning car (no funciona, among others, would do better), just as in English we'd be more likely to say "it doesn't run" than "it doesn't go."
Additionally, as in English, nova when used in a brand name can convey the sense of newness. There's even a Mexican gasoline that goes by that brand name, so it seems unlikely such a name alone could doom a car.