Corvette Pricing
Le Mans Master
Joined: Sep 2007
Posts: 5,526
Likes: 16
From: Mechanicsburg Pennsylvania
Maybe I'm getting forgettable, But I'm pretty sure I saw GM Corvette manager Tadge Juechter said the 'target' Market was in the younger 25 to 35 market. I have to wonder if the C7 is priced at $40K, or 50K, or $70K Isn't it going to cut away sales of the Camaro? You can get a supercharged Camaro for $69K sticker price-wise. Why does GM get in this same "Eating itself through marketing" Like it did when Pontiac was still in production, only now we have the Camaro and not the Firebird ? Maybe I just don't understand the marketing thinking ? 
I do not recall seeing/hearing Tadge make that statement - assuming he did, and with some sense of reason being able to estimate what the C7 will cost, he would in essence be saying the 25 to 35 year old buyer can afford $50k (stripper) to $75k (equipped) autos (plus tax, tags reg, etc) . . . . that would not only be hard to swallow, but borderline BS
Melting Slicks
Joined: Oct 2012
Posts: 3,109
Likes: 2,032
There were already big discounts in '06-'07. It has only a little bit to do with the C6 being around 2-3 years too long. There is something laughable about a convertible with 505 hp at $90k, if a potential customer walks out and buys a similar car for $14k less elsewhere. That convertible is going to sit there until a customer (undiscerning enough to not shop around) comes in, or until the dealer lowers the price.
Your assertion about the GM vs Porsche business model is hardly accurate. If it were really that close, you wouldn't have seen the thousands in discounts, incentives, rebates, holdbacks, etc, that you see for GM products.
It has almost everything to do with offering a vehicle with investment in quality, at that price. Just as Bob Lutz mentions at 21:05 in this video:
http://www.autoblog.com/2011/06/20/l...oline-detroit/
This is why it could be different this time around for the C7. We are starting to see the fruits of Bob Lutz's drive to improve quality, to try to push away the archaic business model that GM was living by for decades (and under which the C6 was developed). Cadillacs are getting much closer to foreign competitors, and the interior design and materials of the C7 look like they're on a whole plane up from the C6.
And speaking of "push," the move away from push production should also help align production volume much closer to real demand, and thus improve the Corvette brand.
"February 08, 2010
No more push: How the Detroit 3 finally stopped overproducing
By Amy Wilson
Mike Jackson saw it coming, the tsunami that would wash over the Detroit 3 thanks to their push production system — a system that would spawn multibillion-dollar losses even in big sales years.
The model, he publicly lamented since 2005, was based on factory overproduction, high dealer throughput, huge incentives and soaring costs. Automakers cranked out cars to keep factories running whether or not there were buyers, forcing discounts and killing residual values.
And now, the AutoNation CEO says with pleasure, that push model finally may be dead. The proof: the dwindling number of cars and trucks on AutoNation lots.
Outsider CEOs Alan Mulally at Ford Motor Co. and Sergio Marchionne at Chrysler Group are imposing discipline that traditional Detroit CEOs lacked. Even General Motors, under new leadership, appears to be pulling away from push.
"It's the most exciting thing we've ever seen," Jackson told Automotive News in January. "I've lived for this day to come. The inventories for the industry are the cleanest and in the best shape ever — ever."
When automakers push vehicles to keep factories running, the unneeded or incorrectly configured vehicles don't match "real" demand. That leads to discounting by retailers, incentives by manufacturers, and brand image erosion. Manufacturers' payments actually reward retailers who ordered or accepted the wrong vehicles, further eroding the brand and reinforcing the "push" behavior.
The Detroit 3 entered 2010 with the lowest Jan. 1 days supply and fewest vehicles in stock since Automotive News began recording complete inventory data in 1992. GM, for instance, started the year with a 52-day supply, comfortably below the traditional goal of 60 days.
It's a far cry from the heyday of push. From 2004 through 2007, GM and Ford collectively lost $59 billion — even as the U.S. market boomed with more than 16 million annual vehicle sales. For much of that period, GM, Ford and Chrysler tried frantically to keep factories running at a level far beyond demand.
A new era?
But the push model now may be relegated to history's dustbin as a new group of Detroit 3 leaders vow to build only as many vehicles as consumers want. It's far too early to declare success. But so far, they're doing it.
Supplies for the entire industry — the Detroit 3 as well as the import brands — have been at 63 days or below for six straight months, helped in part by last summer's cash-for-clunkers program. As of Jan. 1, industry supply stood at an impressively slim 53 days. In the prior five years, the Jan. 1 figure for the industry ranged from 61 to 94 days.
The stakes are high to get this right. The profit potential for manufacturers is huge if they can stabilize production and reduce incentives. GM says its December incentives dropped $2,500 per vehicle compared with December 2008, to $3,900.
Leaders at GM, Ford and Chrysler say their bad habits are over. Last summer, both Chrysler and GM intentionally underproduced. Ford already had checked its overbuilding.
'Stop whining'
GM lost the most money — a cumulative $48 billion from 2004 to 2007 — and fell perhaps the furthest by clinging to the push model.
In the wake of Sept. 11, 2001, the company's heavy discounting and continued production were credited with helping to revive the shell-shocked U.S. economy. Former CEO Rick Wagoner famously told his competitors to "stop whining" about GM's incentives.
Fast forward to 2010: Post-bankruptcy and under the dictates of new leadership, executives at the world's once-largest automaker now say they will produce strictly to match consumer demand.
"No more pushing inventory into rental sales, overproducing and turning to huge incentives, losing money on leasing," Mike DiGiovanni, GM's head of sales analysis, said recently. "We're a company that's now more focused on profitability."
Along with Chrysler, GM has shown the biggest change in the last year, slashing inventories by 56 percent."
http://www.crainsdetroit.com/article...-overproducing
Your assertion about the GM vs Porsche business model is hardly accurate. If it were really that close, you wouldn't have seen the thousands in discounts, incentives, rebates, holdbacks, etc, that you see for GM products.
It has almost everything to do with offering a vehicle with investment in quality, at that price. Just as Bob Lutz mentions at 21:05 in this video:
http://www.autoblog.com/2011/06/20/l...oline-detroit/
This is why it could be different this time around for the C7. We are starting to see the fruits of Bob Lutz's drive to improve quality, to try to push away the archaic business model that GM was living by for decades (and under which the C6 was developed). Cadillacs are getting much closer to foreign competitors, and the interior design and materials of the C7 look like they're on a whole plane up from the C6.
And speaking of "push," the move away from push production should also help align production volume much closer to real demand, and thus improve the Corvette brand.
"February 08, 2010
No more push: How the Detroit 3 finally stopped overproducing
By Amy Wilson
Mike Jackson saw it coming, the tsunami that would wash over the Detroit 3 thanks to their push production system — a system that would spawn multibillion-dollar losses even in big sales years.
The model, he publicly lamented since 2005, was based on factory overproduction, high dealer throughput, huge incentives and soaring costs. Automakers cranked out cars to keep factories running whether or not there were buyers, forcing discounts and killing residual values.
And now, the AutoNation CEO says with pleasure, that push model finally may be dead. The proof: the dwindling number of cars and trucks on AutoNation lots.
Outsider CEOs Alan Mulally at Ford Motor Co. and Sergio Marchionne at Chrysler Group are imposing discipline that traditional Detroit CEOs lacked. Even General Motors, under new leadership, appears to be pulling away from push.
"It's the most exciting thing we've ever seen," Jackson told Automotive News in January. "I've lived for this day to come. The inventories for the industry are the cleanest and in the best shape ever — ever."
When automakers push vehicles to keep factories running, the unneeded or incorrectly configured vehicles don't match "real" demand. That leads to discounting by retailers, incentives by manufacturers, and brand image erosion. Manufacturers' payments actually reward retailers who ordered or accepted the wrong vehicles, further eroding the brand and reinforcing the "push" behavior.
The Detroit 3 entered 2010 with the lowest Jan. 1 days supply and fewest vehicles in stock since Automotive News began recording complete inventory data in 1992. GM, for instance, started the year with a 52-day supply, comfortably below the traditional goal of 60 days.
It's a far cry from the heyday of push. From 2004 through 2007, GM and Ford collectively lost $59 billion — even as the U.S. market boomed with more than 16 million annual vehicle sales. For much of that period, GM, Ford and Chrysler tried frantically to keep factories running at a level far beyond demand.
A new era?
But the push model now may be relegated to history's dustbin as a new group of Detroit 3 leaders vow to build only as many vehicles as consumers want. It's far too early to declare success. But so far, they're doing it.
Supplies for the entire industry — the Detroit 3 as well as the import brands — have been at 63 days or below for six straight months, helped in part by last summer's cash-for-clunkers program. As of Jan. 1, industry supply stood at an impressively slim 53 days. In the prior five years, the Jan. 1 figure for the industry ranged from 61 to 94 days.
The stakes are high to get this right. The profit potential for manufacturers is huge if they can stabilize production and reduce incentives. GM says its December incentives dropped $2,500 per vehicle compared with December 2008, to $3,900.
Leaders at GM, Ford and Chrysler say their bad habits are over. Last summer, both Chrysler and GM intentionally underproduced. Ford already had checked its overbuilding.
'Stop whining'
GM lost the most money — a cumulative $48 billion from 2004 to 2007 — and fell perhaps the furthest by clinging to the push model.
In the wake of Sept. 11, 2001, the company's heavy discounting and continued production were credited with helping to revive the shell-shocked U.S. economy. Former CEO Rick Wagoner famously told his competitors to "stop whining" about GM's incentives.
Fast forward to 2010: Post-bankruptcy and under the dictates of new leadership, executives at the world's once-largest automaker now say they will produce strictly to match consumer demand.
"No more pushing inventory into rental sales, overproducing and turning to huge incentives, losing money on leasing," Mike DiGiovanni, GM's head of sales analysis, said recently. "We're a company that's now more focused on profitability."
Along with Chrysler, GM has shown the biggest change in the last year, slashing inventories by 56 percent."
http://www.crainsdetroit.com/article...-overproducing
Melting Slicks
Joined: Oct 2012
Posts: 3,109
Likes: 2,032
Le Mans Master
Joined: Jul 2002
Posts: 5,636
Likes: 6
Racer
Joined: Jan 2013
Posts: 292
Likes: 4
GM has no clue on how to market?......look at the dozens and dozens of comments on these forums, the zillions of pictures and videos.....commercials, Jay Leno, Car and Driver.....Oh they know how to market alright and guess what.....they are going to sell a ton of these c7s...just watch......Its so funny how everyone is so resistant to change.....Yet, Im here with you dudes, anxiously awaiting.....#s and tests.
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Drifting
Joined: May 2012
Posts: 1,615
Likes: 182
From: South Dennis MA
What i am trying to point out is GM must feel that the $70,000 price range will not sell as well as they may think. So if they offer a lesser priced car like we have seen in the past with the 1LT it will draw more interest thus more sales. I have plenty of friends who would love a vette but the $70,000 price tag is just not attainable for them. The $50,000 is there ball park. Don't forget when this car was conceived GM stated they wanted to attract the younger buyers. I for one do not know of any younger buyers meaning 25 to 35 year old buyers who are willing to pay $70,000 for a car of this caliper. $50,000 I would say they would be willing to spend. So that is why i was making my original statement. I hope that clears things up for YOU
Banned Scam/Spammer
Joined: Mar 2005
Posts: 8,083
Likes: 3,869
From: Bonita Springs FL
You want laughable, go walk into a Porsche dealer.
Anyways, the deep discounts on the Corvette is part due to GM keeping the C6 around 2-3 years too long and also part due to GM not having better control over inventories. There is nothing laughable at a gorgeous convertible with 505 HP at $90K.
The difference between GM and Porsche is that Porsche makes one less car than the demand and GM makes two more cars than the demand. That is one of the reasons Porsche has a higher perceived value. GM has no clue on how to market a Corvette.
Anyways, the deep discounts on the Corvette is part due to GM keeping the C6 around 2-3 years too long and also part due to GM not having better control over inventories. There is nothing laughable at a gorgeous convertible with 505 HP at $90K.
The difference between GM and Porsche is that Porsche makes one less car than the demand and GM makes two more cars than the demand. That is one of the reasons Porsche has a higher perceived value. GM has no clue on how to market a Corvette.
The deep discounts are nothing new, been around for many years and have little or nothing to do with any of your astute market analysis. They exist because Corvette prices are just plain stupid and people won't pay them. The manufacturer along with their retailers then discount deeper and deeper until they clear the market, no more complicated than that.
90 some grand for a convertible Corvette isn't laughable? Really? Then why do they have embarrassing $17,000 discounts and they still can't unload them. The Corvettes future at these retarded prices in this type of government depressed economy is bleak. Not hard to figure out.
Race Director
Joined: May 2005
Posts: 11,992
Likes: 1,331
From: Middletown, DE
Wow, put down the crack pipe Dude.
The deep discounts are nothing new, been around for many years and have little or nothing to do with any of your astute market analysis. They exist because Corvette prices are just plain stupid and people won't pay them. The manufacturer along with their retailers then discount deeper and deeper until they clear the market, no more complicated than that.
90 some grand for a convertible Corvette isn't laughable? Really? Then why do they have embarrassing $17,000 discounts and they still can't unload them. The Corvettes future at these retarded
prices in this type of government depressed economy is bleak. Not hard to figure out.
The deep discounts are nothing new, been around for many years and have little or nothing to do with any of your astute market analysis. They exist because Corvette prices are just plain stupid and people won't pay them. The manufacturer along with their retailers then discount deeper and deeper until they clear the market, no more complicated than that.
90 some grand for a convertible Corvette isn't laughable? Really? Then why do they have embarrassing $17,000 discounts and they still can't unload them. The Corvettes future at these retarded
prices in this type of government depressed economy is bleak. Not hard to figure out.
Except, such pricing is only "stupid" (please stop with "retarded" already) if there is an element of cost-plus in their pricing and they really need these high prices to achieve profits on each unit. (in which case it is really the business model which stinks and not the pricing).
Far more likely they are using this approach to allow themselves and dealers to make the most money - which is the point of your highlighted statement.
Some buyers walk in, fall in love, haggle a bit, and buy. Dealer makes big margin -- and, as these buyers often live in smaller, less accessable markets, GM is not handing out volume disounts so their margin is also quite nice.
Some buyers have more time and visit more local dealers, visit Edmonds and KBB, and negotiate a bit harder. Fine -- dealers have room to move, maybe they are getting close to their volume incentives, and so that's the next level of customers -- and revenue.
Finally, you have the growing number of buyers who aggressively use the internet and the buying power of the large dealers, plus the knowledge that many service departments want the warranty/maintenance business, and don't care where you bought the car. These buyers get the best price nationally (even allowing for shipping). From these buyers, who might even be cross-shopping competitive vehicles, the big dealers (and GM) extract the last sales dollar where marginal revenue > marginal cost.
To me, that's smart, not stupid. Setting a fixed price almost always means you are leaving money on the table with impulse and busy buyers, and losing some sales to shoppers who are wired such that they HAVE to get a "deal," or who are not committed to the brand you are selling and perceive a discounted competitor's car as a better value for their buying dollar.
Le Mans Master
Joined: Jul 2002
Posts: 5,636
Likes: 6
To me, that's smart, not stupid. Setting a fixed price almost always means you are leaving money on the table with impulse and busy buyers, and losing some sales to shoppers who are wired such that they HAVE to get a "deal," or who are not committed to the brand you are selling and perceive a discounted competitor's car as a better value for their buying dollar.