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New article from Bloomberg News: Aging Corvette Gets Cues from Ferrari

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Old 10-16-2011, 12:49 AM
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Jim_Lammers
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Default New article from Bloomberg News: Aging Corvette Gets Cues from Ferrari

http://staugustine.com/news/business...i#.Tppgf9KIm0s

Not sure what he means by "C6 is not relevant" as I think it outsold most other sports cars.

Jim

====


By DAVID WELCH
Bloomberg News
SOUTHFIELD, Mich. — Conspicuously absent from this week’s celebrations in Detroit for the 100th anniversary of Chevrolet: any talk of the overdue seventh-generation Corvette.

General Motors delayed overhauling the sports car in the unprofitable era leading up to the automaker’s 2009 bankruptcy. Now the Chevrolet division’s Corvette is in a slump, headed toward sales of 13,000 this year, or about a third of the level five years ago. With 87 percent of buyers over age 50, the Corvette resonates almost exclusively with baby boomers.

As development progresses toward the new model in 2013, GM is trying to refashion Corvette for a younger buyer. The cockpit is being embellished and getting better seats to justify a price that can top $100,000. The goal is to boost sales for one of GM’s most-profitable cars and draw more buyers to dealers. Corvette, introduced in 1953, was last redesigned in 2005.

“In its current generation, the car isn’t relevant,” said Eric Noble, president of the CarLab, an automotive consulting firm in Orange, Calif. “But if GM gets the styling on the next car right, it will sell across generations.”

The time lag also has put more distance between the debut and a recession that ended in June 2009, as well as the global financial crisis. Cars like the Corvette, which starts at $49,045, typically struggle when the economy slows, said Rick Scheidt, Chevrolet’s executive director of product marketing. In a rebound, “that market does come back,” he said.

Bob Lutz, GM’s retired vice chairman of product development, says he rejected plans for an earlier introduction that included low-cost proposals for only modest changes. He preferred to wait until GM had the cash to build a car that would make a Corvette owner want to trade up.

“It’s a much bolder and more dramatic design,” Lutz, who still consults for GM, said in a telephone interview. “The new car will also surpass the fuel economy and performance of today’s car in all respects.”

There are hints of Ferrari styling in the next Corvette, which will depart from the traditional looks of the last two generations, a person familiar with the design work said. GM may use direct injection, which can improve fuel economy in powerful engines, another person with knowledge of those plans said. The Chevrolet Camaro’s V-6 engine uses the same technology to get 312 horsepower and 29 mpg on the highway.

Noble said some consumers had complained of uncomfortable seats and a Spartan interior, considering the current Corvette’s price. The 505-horsepower Z06 model starts at $74,375 and the 638-horsepower ZR1 Corvette starts at $110,300.

Sales should rise when the seventh-generation Corvette arrives because some buyers will have been waiting for the newest version, said Jim Hall, principal of 2953 Analytics Inc., a consulting firm in Birmingham, Mich.

Through September, Corvette’s U.S. sales have risen 4.8 percent this year, trailing gains of 10 percent for cars and light trucks and of 13 percent for Porsche’s 911. Sales are so slow that the Corvette plant in Bowling Green, Ky., is operating only one shift a day, making eight cars an hour. Because the plant specializes in the car’s plastic body, it can’t easily build anything else.

GM’s internal studies show that buyers under 40 don’t aspire to drive a Corvette as do baby boomers, who tend to view the car as a reward after children are grown, according to a person familiar with the results.

To reach different buyers, Chevrolet marketers have been talking to Porsche-owner clubs about the car, Scheidt said. Some buyers view the Corvette as a brutish car that’s all about raw horsepower and underestimate how well it handles, said Chris Perry, Chevrolet’s vice president of global marketing.

For now Chevrolet is relying on other models to create buzz. This week, with about 200 journalists visiting Detroit for briefings geared to Chevrolet’s centennial, officials showed a 1969 Camaro and focused on the sales success of the modern version, and announced the Spark electric car. There was no official update on the 2013 Corvette.

The Camaro outsold Ford Motor Co.’s Mustang last year and leads through September with sales of 70,249 versus 56,618 for the Mustang. The car featured prominently in the “Transformers” movies, giving it strong recognition in China and South Korea, said Susan Docherty, vice president of sales and marketing for GM’s International Operations.

In the growing Chinese and South Korean markets, GM is more often represented by the Camaro than the Corvette, said Susan Docherty, vice president of sales and marketing for GM’s International Operations.

In China, the Corvette’s big V-8 engine is taxed heavily and the sticker price is out of reach for all but the wealthiest buyers. As a result, the Corvette is a boutique car there, she said.

Even in the United States, where the Corvette is most famous, the Camaro and Volt plug-in hybrid get far more attention these days, Perry, the marketing executive, said in an interview.

Regardless, GM executives say they intended to protect the Corvette, which was designed as a fast two-seater for sports-car enthusiasts. Since joining GM in May 2010, Chief Marketing Officer Joel Ewanick has used the Corvette in more Chevy advertising to elevate the brand.

“The Corvette is the icon of sports cars in America,” said Mark Reuss, president of GM-North America. “It’s our aim to keep it there.”
Old 10-16-2011, 01:28 AM
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VETTE-NV
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I have no doubt the C7 will be a triumph of design and engineering, but when marketing and consulting geeks make profound....or should I say stupid....statements to justify their job, I get worried about GM's judgement.

"Not relevant" to whom?? A younger buyer who can't afford the car? That's who they think they should appeal to?? I have no problem with dramatic changes, in fact that's what hoping for, but change things for the right reason.

I wish GM execs would let the designers and engineers do their thing and let the new car speak for itself when it arrives....screw spending money for ignorant rhetoric and just shut up until the big reveal.

Build it and they will come.

Not relevant my a$$........
Old 10-16-2011, 05:06 AM
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Default Parts of the article that I likeI like

[QUOTE=Jim_Lammers;1578970801]http://staugustine.com/news/business...i#.Tppgf9KIm0s


By DAVID WELCH
Bloomberg News
The cockpit is being embellished and getting better seats

The goal is to boost sales for one of GM’s most-profitable cars and draw more buyers to dealers.

“But if GM gets the styling on the next car right, it will sell across generations.”

He (lutz) preferred to wait until GM had the cash to build a car that would make a Corvette owner want to trade up.

“It’s a much bolder and more dramatic design,” Lutz, who still consults for GM, said in a telephone interview. “The new car will also surpass the fuel economy and performance of today’s car in all respects.”

Some buyers view the Corvette as a brutish car that’s all about raw horsepower and underestimate how well it handles, said Chris Perry, Chevrolet’s vice president of global marketing.

Regardless, GM executives say they intended to protect the Corvette, which was designed as a fast two-seater for sports-car enthusiasts. Since joining GM in May 2010, Chief Marketing Officer Joel Ewanick has used the Corvette in more Chevy advertising to elevate the brand.

The Corvette is the icon of sports cars in America,” said Mark Reuss, president of GM-North America. “It’s our aim to keep it there.”[/QUOTE]

Old 10-16-2011, 09:12 AM
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Nothing new in this but the message at least is consistent. "Relevant" or not, they realize that too few younger folks with money in their late 30s and 40s want a Corvette. They are buying Porsches, C63s, M3s and who knows what else. With the right redesign, some of that business can be recaptured.
Old 10-16-2011, 10:33 PM
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zland
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Interesting, the Z06 had the best lap time in a recent "Best handling" car contest of 11 cars in Motor Trend magazine. They placed it in 6th place & slammed it for having race tires yet did not slam the Porsche they ranked in 3rd place & slower lap time with the same type tires. The Corvette is not relevant when selling 13000. How many GT3 Porsche's do they sell? My bet is a lot less & somehow it is wonderful.
Old 10-17-2011, 03:05 AM
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Originally Posted by zland
Interesting, the Z06 had the best lap time in a recent "Best handling" car contest of 11 cars in Motor Trend magazine. They placed it in 6th place & slammed it for having race tires yet did not slam the Porsche they ranked in 3rd place & slower lap time with the same type tires. The Corvette is not relevant when selling 13000. How many GT3 Porsche's do they sell? My bet is a lot less & somehow it is wonderful.
It wasn't just about the type of tires. They did note the difference in the amount of tread:
"In the Corvette's defense, the Porsche GT3 RS also came packing basically the same sticky Michelin Pilot Sport Cups. However, they're different spec, and the autobahnstuermer's tires had tread all the way around. Not the 'Vette's meats. A quarter of the enormously wide 345s had no tread at all."

This is understandable as the Corvette's tires have the standard MPSC tread pattern, while the GT3's Cup+ tires have a slightly different tread pattern (additional circumferential groove, wider main grooves, more siping) and compound designed for better wet weather performance.

You can't really compare the GT3 model to all Corvettes (13000). You'd have to compare the Z06 numbers, and even then the Z06 will have the pricing advantage, which makes it more affordable to more people. Looking at the larger picture, Porsche sells over 20k 911s, and these are cars with much higher average transaction prices than Corvettes.
It is not relevant in the sense that relatively few people in the younger demographic are buying Corvettes. You can't sustain a model much longer if your core demographic might soon not be legally able and healthy enough to drive. You can't sustain a model simply with great track times and not much else that really appeals to the buying public.
There is also a problem here for Cadillac's relevance too: If the core Corvette demographic is buying Corvettes, they are not aspiring to own a premium GM. BMW, Porsche, Audi, and Mercedes know that if you get the younger generation (30- to 40-year-olds) into their lower end models, you have a good chance at retaining them and "feeding" them into the upper models as they age and improve economically.
Old 10-17-2011, 11:47 AM
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Originally Posted by zland
Interesting, the Z06 had the best lap time in a recent "Best handling" car contest of 11 cars in Motor Trend magazine. They placed it in 6th place & slammed it for having race tires yet did not slam the Porsche they ranked in 3rd place & slower lap time with the same type tires. The Corvette is not relevant when selling 13000. How many GT3 Porsche's do they sell? My bet is a lot less & somehow it is wonderful.
Motor Trend didn't call the car irrelevent; after all, they included it in their comparison. It's "Best Driver's Car" btw. Bloomberg News called Corvette irrelevent, and if you take it as gospel that Corvette doesn't appear on a lot of shopper's lists today that could afford it, then they have a point. (I'm starting to think too much is made of Corvette's lack of appeal to youngsters, but what else is anyone going to talk about during this dry spell?)

Also, race tires alone don't account for Corvette's 6th vs 911's 3rd place finish. You left out Motor Trend's biggest slam:

Then there was the Corvette's perennial Achilles' heel -- those damn seats! Lago noted that with this 'Vette, the ultra-gumballs help highlight just how inferior the seats are... Justin, who won Le Mans at the wheel of a Corvette, commented that he just couldn't believe a car with such tremendous levels of performance would let the occupants get tossed around in such a ridiculous manner.
That's why the fastest car in the contest ended up ranked sixth, behind a Mustang. Just like MT's 2009 Best Driver's Car comparo (then it was the ZR1). Of course, those great numbers are going to sell a handful of Z06s, but most people are just going to remember the car as a cheater with crappy seats. Bummer.

.Jinx
Old 10-17-2011, 05:59 PM
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Yes, it's really a mystery why this problem persists. It's not as though you have to change the entire car to give it proper seats.
Old 10-17-2011, 07:13 PM
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Originally Posted by BobRBob
Nothing new in this but the message at least is consistent. "Relevant" or not, they realize that too few younger folks with money in their late 30s and 40s want a Corvette. They are buying Porsches, C63s, M3s and who knows what else. With the right redesign, some of that business can be recaptured.
I'm not seeing any more under 40's driving Porsches than Corvettes. As for the M3, it's not a comparison. The new Camaro ZL1 is a more appropriate comp to the BMW from a performance standpoint. The 4 seat M3 is an easier sell to somebody with a kids to haul around.
Old 10-17-2011, 08:11 PM
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Originally Posted by lake_bueller
I'm not seeing any more under 40's driving Porsches than Corvettes. As for the M3, it's not a comparison. The new Camaro ZL1 is a more appropriate comp to the BMW from a performance standpoint. The 4 seat M3 is an easier sell to somebody with a kids to haul around.
What you see in your neck of the woods is not necessarily a reflection of ownership demographics as a whole. A Boxster/Cayman is priced closer to most Corvettes, and their average ownership age is right around 40 years old. A 911 costs more than either a Boxster or a Corvette, so we should expect its average age to be more. At 51 years of age, it's older than the Boxster/Cayman demographic, but it's still 3 years younger than the Corvette demographic. Now here's another interesting bit: The median income for the 911 owner is $390,000.
I agree, an M3 might not be the best comparison. A BMW Z4 would be a closer fit in philosophy (2-seater). Average is around 37 years old.
Old 10-17-2011, 08:29 PM
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So when it comes to the C6 to C7 transition the following applies:

The vette is a viable sports car.
It's the best price per features sports cars with one caveat there is just not the due dilligence or build quality/materials found with the foreign competitors.
The brand image does little to restylize the reflection of car ownership as a representation of the over-the-hill and through the woods crowd.
The dealership experience adds another level of irrelevance with service support equaling that of the Chevy Aveo [aka Geo Metro] along with the denial of service under warranty game played to utter fustration.

GM needs to make another attempt at a bold younger statement like it did with the CTS_V coupe vis-à-vis C7 vette.
In addition they’ll need to install a loyalty redemption program for previously disillusioned and somewhat disgruntled vette owners [a larger percentage than one would think] to trade up.

But what they really need to do most of all is to apply thoroughness in design and engineering via a continuous improvement process. So when you get into the new CTS_V coupe for example you are impressed by the design and interior quality only to be completely let down by the powertrain [i.e. transmission] being sluggish and behind the shifting points in a performance touted 500 hp car as similarly delayed in your A6 paddle shift corvette of six+ years ago. A point of contention vocalized across the vette community for years.

Last edited by User 2623; 10-17-2011 at 08:38 PM.
Old 10-17-2011, 08:44 PM
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I think "relevance" has less to do with the Corvette's actual abilities than the social stigma that goes with it. A buddy of mine who is about my same age (mid 40's) has a 911. He certainly respects my Vette and knows it's the better performer and a much better value, but he would never own one. Why? He's part of the elitist group that views Corvettes as blue collar cars, and he always makes good natured jokes that refer to gold chains or Mr. Goodwrench. This is an image that has been far outdated by the C5 and C6, but still lingers on. The current Corvette is fighting it's past image and that's a battle it can't win, no matter how good the current car is. Maybe there are just too many old Corvettes still on the road with old bald guys driving them.....not much GM can do about that.

Building the best Corvette possible is all GM should be focusing on. Making pointless changes just because they think these changes will appeal to a different audience is the tail wagging the dog. As my Porsche-owning buddy says, "it's still a Chevy." Whatever the hell that stupid comment means.
Old 10-18-2011, 12:40 AM
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Nothing wrong with improving the interior if the rest of the car can still be all that it can be.
Old 10-18-2011, 01:08 AM
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I think people at GM realize that Corvette needs to broaden out their current customer base to that of all ages and design the C7 to be sold not only in North America but in Europe, Japan and China. Ferrari brand is the number one selling supercar in China. The Corvette needs to have the same appeal to everyone that a Ferrari does. Sophiscation, comfort and speed. Currently, the C6 just has speed!
Old 10-18-2011, 04:33 AM
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While I'm sure the Corvette team can (and should) broaden their customer base through design, I think in the grand scheme of things, they shouldn't necessarily target what Ferrari is doing.
On the one hand, Ferrari have a fairly unique position in the world. A byproduct of their legacy in F1, which is branching out to emerging markets. Formula One races in China, Malaysia, Korea, India, Singapore, Abu Dhabi, Bahrain, etc. Massive profits through just merchandising alone; they didn't put a single cent into that Ferrari theme park in the Middle East, apparently, but you can bet they are milking all the trademark associations on that. In terms of price, volume, and a heritage more aligned with GT racing, Porsche seems to be the more immediate benchmark for Corvette.
On the other hand, shouldn't it be Cadillac that takes the fight to Ferrari (and even to a similar extent, Porsche)? I personally think GM should still make some public statement about what Corvette should be doing vs what Cadillac perhaps should be doing instead. With Cadillac reorganizing its lineup to more directly challenge the European sedan makers, perhaps there should be something more premium and exclusive above Cadillac, that can produce wildly extravagant products like the Ciel and any Ferrari challenger.

Speaking of which, anyone know if a new XLR is in the works, to be based on the C7? Against public buying opinion, I actually liked that design and felt it deserved better development.
Old 10-18-2011, 08:28 AM
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Originally Posted by lake_bueller
I'm not seeing any more under 40's driving Porsches than Corvettes. As for the M3, it's not a comparison. The new Camaro ZL1 is a more appropriate comp to the BMW from a performance standpoint. The 4 seat M3 is an easier sell to somebody with a kids to haul around.
Well, I dunno. When I drive around downtown during the week I see lots of Porsches but very few Corvettes. Most of the Porsches are driven by 40something guys going to work. Not so much with the Corvettes. They tend to come out on the weekends and are driven mostly by retired guys (like me). Seems the Corvette just doesn't have the same cache with the up and coming professionals as the Porsche. As for the comparison to M3s and C63s, I know they aren't 2 seaters but many of these high performance cars are owned by people who also own a 4 door sedan and/or an SUV. These buyers don't need a back seat in their fun car; they cross shop high performance two and four seaters. When one of these folks doesn't even look at the Corvette and buys an M3, that's a problem for GM and it happens all the time. My next door neighbor has a Porsche and a Land Rover. He used to have a C63 and a Land Rover. I can guarantee you he never looked at a Corvette when he bought his Porsche. There are 3 Porsches within a block of my house and they are all family households. I own the only Corvette on the street and it's far from new (like me).

Some Corvette owners remain in denial about this but I'm pretty sure GM has a complete understanding of the problem. Now all they need is a solution to it.
Old 10-18-2011, 11:24 AM
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Cadillac should not be building a sports car, or even a two-seat GT. Cadillac needs a flagship sedan, and no the XTS is not even close to fitting the bill. "But what will the people who want a more luxurious Corvette buy?" They'll keep buying European cars, until Corvette finally gets it right and becomes a little less of a performance bargain and a whole lot more of an excellent automobile.

Corvette doesn't need to match Porsche and Ferrari; Corvette just needs to better every car that costs less, in every single aspect -- sexier shape, more personal technology, better designed interior (as distinct from better laid-out or merely better wrapped), tighter panel gaps (and if that means ditching the plastic, so be it), cooler lighting... not a hint of cheapness anywhere, and not a single lower-priced competitor with a single compelling "wow" that Corvette doesn't beat, clearly, in the eyes of the press, even if (especially if) the press opinion doesn't line up with that of "traditional Corvette buyers."

GM is close; they might even truly understand the problem now and be empowered to solve it, if Bob Lutz' book is to be believed. (Relaxing the litany of obscure extreme functional engineering standards should finally let them build an interior the way the Europeans and Japanese do. Lutz' bits about ashtrays and wheel-fender gap were revelations.) The Motor Trend slam of the 2012 seats is not a good sign, though. I really hope that was a stopgap measure and not GM's best effort for a new seat.

.Jinx

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Old 10-18-2011, 12:17 PM
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In the world of marketing and sales, perception easily trumps reality. And the perception is that when it comes to cars, especially pricey cars, German cars are superior to American cars. This is especially true when it comes to comparing the C5 & C6 to its German competiition.
Keep in mind that the vast majority of people who buy a Corvette or any of its German competition do so because thay want a quality daily driver that offers performance....not because they want the fastest, best handling track car. I have owned 10 Vettes, Ferraris, a viper, and every make of German car. (currently a 2010 GS vert). Most of my friends are into cars and drive fun cars. I can tell you that as far as performance goes, I will take a Vette over almost anything. But that does not sell cars to the majority. The feeling one gets when sitting in almost every German car is a better feeling than sitting in a Vette, including my GS with the 4LT package. The good news is that GM can and will change the perception of the Corvette with the C7. It will be a sleek looking sports car with an extremely high quality interior including some of the best seats going. It will have all of the latest technology, a direct injection engine, a 6 or 7 speed dual clutch tranny
available, a great nav and sound system. This will be a car that will be priced below most of its German competition and will sell like hotcakes.
The perception of the Corvette will change with the C7. It has to.
Old 10-18-2011, 12:25 PM
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Originally Posted by Jinx
Corvette doesn't need to match Porsche and Ferrari; Corvette just needs to better every car that costs less, in every single aspect
.Jinx
You sir, are absolutely correct.

For the record, I was 24 when I bought my Vette new. There are those of us younger guys that are able to afford the car. However, I bought the car understanding that I was getting great performance and ... Yeah, just great performance.

Basically it boils down to this. A $50,000+ car should not have constant rattling coming from the roof (Yes I know this is fixable but I shouldn't have to fix it.)

The Corvette is a great performance car and I love driving it but I also hate that it constantly sounds like it's falling apart. You can basically compare me to Jeremy from Top Gear, I think this car is very cheaply made and has no manners, but I'd rather drive this wild crazy beast than something that's "tamer" and more civilized. Unfortunately for GM most of my counterparts don't agree with that mentality, so the buy Porsches. It's ok though, they don't mind looking at my tail lights all the time because, well, they're comfortable in their seats..
Old 10-18-2011, 05:26 PM
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The C6 is a great car, just don't drive it in cold weather! Living in Michigan, I put mine away two weeks ago, lots of noise from all over. Back in August when its warm, no problem. It may not be as solid as a Porsche but the price is less and it always puts a smile on my face. The next version, C7 will have more of everything, power, fuel economy, style and hopefully quality. I think GM gets it now that poor quality cars turn people off. I am sure Bob Lutz will make this car a hit, lots of people are counting on that. I still believe in USA made products, we all better or we will not be important anymore!


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