n8dogg

Tadge,

Could you explain to us what is behind the determination of how many Corvettes are produced per day, week, month, year?

I ask this question because it is well noted that the demand for new Corvettes are down, yet production seems to be as high as ever. When supply exceeds demand both the new and used Corvette markets get damaged. Especially for the Corvette Loyalist who traditionally trades every few years. It seems irresponsible for GM to over-produce America's Sports Car.

The bonus tags on left over 16's and the 2 top Corvette dealers selling new 2017's at 15% off, kill the value of 2-3 year old trades! Smaller dealers can't compete. GM is allowing a Corvette monopoly and restricting dealers from being able to take care of Corvette customers. It would seem to make sense for GM to throttle production according to demand. The well-being of the Corvette market as a whole should be GM's priority. It would help us understand production numbers if you could explain things from GM's side.

Thank you!
-Nate

Gary '09 C6

don't the dealers order all the cars ?

suspect allocations are high and the dealers don't want to lose any...when the cars can't be sold in a timeframe acceptable to the ordering dealer,
the ordering will stop...

L8T8

I'd welcome a side note as to when is Europe going to get the full fat order program that the US is getting.

It's improved somewhat since 2015 but still lags significantly behind what is offered in the States.

TIA

69427

So, you would prefer that GM operate like OPEC to keep prices high?

If GM overproduces then all Corvettes, new and used, are available at better prices. The customer wins. The guy who buys new, and the guy who buys used. And everyone down the line too. Some of us buy Corvettes for the performance and fun factor, not for the exclusivity and snob appeal.

GM is in the business to make money (although it occasionally fails spectacularly). It's not there to be busy being distracted by "the well being of the Corvette market as a whole", WTH that means.

The free market works. Let it.

jvp

I agree with 100% of this reply. And I think the "let's control the production of the Corvette" mentality to be, well, mental. I kinda like not having to pay over sticker or even sticker for my expensive Corvette. And I like that deals get cut all the time so that others can comfortably afford the car, too.

Withholding production is a Ferrari game. Let them play it. Corvette needs to stay out of that.

L8T8

Just by reading between the so-called lines, without any internal knowledge, I'd say that GM may have in their corporate minds a somewhat different path than the one travelled till now.

The writing is on the wall imo...they are building a new standing for Vettes as the success of the C7 must have wet their appetites. No target is too big or distant, it seems.

Keeping the US character of what the Corvette stands for is crucial but not the only requirement necessary for success these days. The C7 has proven that GM can go after the big ones.

I think they will, the C7 being just the opening salvo.

n8dogg

Free market can work, and it can be a good thing, but when there is a monopoly, does it work? No. And did you know that GM pays higher volume dealers more $ than low volume dealers for every car they sell. It is not a free market.

There are small dealers that care about taking care of Corvette owners. In order to take care of Corvette owners, properly, they need to sell and service enough Corvettes to become sensitive to what satisfies the Corvette owner. Small dealers are losing deals to the "Big 2", because they simply cannot afford to sell cars for a loss. "The Big 2" can afford to sell Corvettes so cheap because they get more $ from GM. They also get sticker price for every Corvette during the first year of a new generation and profit BIG. 1000 X $8k to $10k.

Read all of the complaints on this forum about local Chevrolet dealers. It isn't necessarily the dealer's fault. When GM makes it so small dealers have to take a loss in order to compete, they will choose to not sell that product. What choice do they have? Survive or not survive.

No one was complaining about Corvette production in 2009 or 2010 when they only produced 12k to 16k Corvettes (1/3rd of 2016 production). That's because there weren't enough buyers. There aren't enough buyers now, why would it matter if they produced 5k or 10k less?

Even if production were throttled back, dealers would still discount, they just wouldn't need to take a loss. Heck, even if they could break even I think you'd see more dealers participating.

Let's not forget about the back-bone of Corvettes, the Corvette Loyalist, the guy/gal that buys a new Corvette every time a new model is introduced. These are the guys that bought the 2014's and 2015's and are now trading for a 2017 GS. Without these guys, there wouldn't be a Corvette. With supply being much greater than demand, their trades aren't worth what they could be. They aren't trading. Look at how many 2016's are still on dealer lots, look how many 2017 GS's are sitting, there is no where near the demand for 2017 GS's that was expected to be.

I understand the benefit of free trade, but over production has proved to be detrimental to business as GM has seen, and GM needs to encourage dealer responsibility in not diluting the market. I think it could be handled with a little more care and everyone will benefit.

dfettero

On the tour in April they said that all Corvettes are ordered by dealers (or their customers). And that they produce about 170 per 10 hr shift. PS: Do the math - that's 1 corvette rolling off the line every 3.5 min.

69427

You're still lost.

n8dogg

I'm not. I understand how it works on the dealer/GM side, which is why it is confusing for the average Joe.

Yes, dealers order Corvettes, but they cannot free-order, it is allocation based. The more you sell the more you earn. If cars sit on the lot, it hurts their allocation. If dealers cannot afford to take losses on new Corvettes in order to compete with the big Corvette dealers, then they cannot earn Corvettes. The Corvette owner gets hurt, because not many dealers can effectively support Corvette owners.

Do dealers choose not to take their allocation? Sometimes. If a dealer declines an allocation, will GM alter how many Corvettes are going to go down the assembly line? NO. GM will still produce X amount of cars, each day, each month, each year. What happens to the empty allocations? Dealers who request additional Corvettes get them and who ever "earned" it the most, gets it. Guess who usually gets extra allocations. The top selling Corvette dealers. Again, small dealers would participate if they could afford to. They cannot afford to because they do not earn the same $ from GM as a high volume Corvette dealer.

Free-trade only makes sense if a customer can walk into any dealer and order a Corvette at a competitive price. Your average dealer can't be competitive because they only sell 3-4 Corvettes per year, their allocation is next to nothing. The big Corvette dealers can sell the car cheaper and get it faster because GM pays them more for each car they sell as they are in a higher kick-back tier and because they sell cars so cheap they have sold a high volume of cars which has earned them a large allocation. Your average dealer will stick with Trucks and core vehicles like Malibus and Cruzes because they have bills to pay.

We've strayed far past the original question of what is behind the determination of how many Corvette's are built. Yes, dealers request the Cars, but GM knows how many Corvettes are sitting on dealer lots and GM knows there are large Corvette dealers that are discounting Corvettes lower than the average dealer's cost, diluting the market.

69427

Yea, yea, I get it. You like the exclusivity and snob appeal of a lower volume, higher priced car.

Enthusiasts like me aren't interested in GM reducing/limiting production volume so that you can feel better about your next purchase and/or resale. Me personally, I'm tired of going to track days and seeing damn few Corvettes there. Too many Corvette owners are scared off from non-waxer activities (ie: track days) because these cars aren't inexpensive. When the new ones are damn expensive it drags up the purchase cost of previous models too (These are Chevrolets, for gosh sake, the everyman's car.). If extra production volume results in lower prices due to dealers having to discount the cars, that's going to put more enthusiasts (and probably a few more of the exclusivity crowd) into Corvettes. That helps all Corvette buyers and enthusiasts.

You seem to have a several complaints about how dealers are allocated cars and incentivized to sell them. I don't see where anyone in engineering has enough free time (or interest) in his day to explain/justify sales and marketing issues. Seems your complaint should be directed to the people who determine dealer allocations.

I do wish you the best of luck finding anyone at corporate who will give a crap about the situation though.

L8T8

I think you are both right, funnily enough.

We should all treat as a fact of life that the C7 is a generation that has sunk its teeth into the flesh of more expensive competition. That automatically creates a step for the future and I am sure that Tadge et Team are quite aware of this.

The usual misconception is that Euro cars are limited in numbers compared to Corvette production. That used to be the case twenty years ago, even new-mode Ferrari is today aiming at 10k plus cars and has the underbelly of Maserati numbers to sweep up customers. Suddenly, Vette production is not that distant in numbers.

I think that the US end must accept that Corvette is now a global winner and not a well kept secret. It is also somewhat unfair to the design team to actually say that Corvette should stay focused to a particular perception and not advance the game further.

The C7 has proven the point, imo.

n8dogg

I can't afford a C7. Do I wish I could? Yes. Am I mad at GM for making them too expensive for me? No. No snob appeal here. I've worked in Corvette sales and service for close to a decade and just simply care about the affect that supply and demand has on both the consumer and the dealer. When supply is greater than demand the dealer hurts and the late-model Corvette owner hurts. However, it is beneficial to the person looking to purchase a Corvette (with-out a Corvette trade). Overall, is that good or bad for everyone affected?

I wish you were right about when there is a stong demand for new, the used prices go up. Used late-model prices never go up, only down, just at various rates.

You are probably correct, it would be difficult to find someone at GM that cares enough and could make a difference in how the dealers are affected. If they cared they would personally take the loss on their profit instead of letting the dealer take the hit. The dealer is GM's customer. The vehicle buyer is the dealer's customer. If GM really cared, do you think they would encourage customers from across the US to purchase a new Corvette from 1 of 2 dealers in the North East? That's exactly what they are doing and the bulk of it stems from over-populating Corvettes.

n8dogg

I agree. The C7 is a super-car player at a sports-car price. This has been true for a long time.

I'm not sure one can compare Corvette's production to its competitors. Porsche makes approximately 30k 911's per year, not far off from the Vette, right? But only 10k of those make it to the US. Chevy produced over 40k Corvettes in 2016. 40k!! There are still thousands of 2016's sitting on dealer lots. For 2014 model year, Chevy's goal was to produce 30k Corvettes. They ended up producing 37k and kept that figure for 2015 and then added 3k to 2016, yet demand dropped as time went on. Once GM saw the demand drop, they decreased the dealer profit and kept MSRP the same.

I understand that GM wants to brag about how many Corvettes are produced per year, it encourages sales and generates hype. But when dealers are giving them away, it's for a reason, and that does not look good. And when 15k new Corvettes are sitting on dealer lots, that is a problem. But thankfully the plant keeps putting out 150 per day!

Bill Dearborn

The cars are selling just at a lower price. As for Corvette Loyalists they are in the beginning stages of dying off. Over the next few years there will be far fewer of them. Why tie yourself to a marketing strategy that depends on them? That is very short sighted. I may have purchased my last new Corvette at the end of last year. I will probably keep it for about 6 years which is how long I kept the previous cars. If I live long enough more than likely the only way I get into my next Corvette is in a used C8 so I hope the prices on those fall the same way.

Bill

n8dogg

http://www.corvetteblogger.com/2016/12/19/gm-shut-corvette-assembly-plant-one-week-sales-slow/

n8dogg

https://www.corvetteforum.com/forums...-shutdown.html

n8dogg

I think this is a great question for Tadge's next round of answers! Will help clear a lot of confusion!

Sillyme

I'm on the other side of the fence on this issue. At this time I don't own a Corvette. In the past have had several. I had a 2004, a 2009 and a 2011.
At this time, I have a leased Infiniti that has 10 months left on the contract. I have been looking at the C7 and thinking that his will be my next car. However, when I saw how much the prices have gone up, I almost changed my mind.
After seeing all the deals that were out there at the end of the 2016 model year I thought, maybe I can make this happen!
I'm hoping that the good deals will be available when I'm ready. Then, I will once again be part of the Corvette Family again.
So as you can see, the great deals are really good for some of us, and not so good for others. We all can't be happy about it.

StancyPants

Guys, 3 month production shut down, they've ramped up to meet any year end shortages.