GM Corvette Profit
Melting Slicks
Joined: Oct 2013
Posts: 2,391
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Estimate 6-7k from dealer cost to MSRP. Note- dealer invoice is a tad higher than dealer cost. Yeah they make a nice profit per unit... the more the options the higher the margin.
Burning Brakes
Joined: Oct 2012
Posts: 933
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From: Dallas, TX
I find it a bit difficult to believe that a dealer is already offering 3K off a C7... But stranger things have happened I suppose.
The higher the margin for both dealer and GM, right?
The higher the margin for both dealer and GM, right?
Team Owner
Joined: Aug 2007
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From: I live my life by 2 rules. 1) Never share everything you know. 2)
St. Jude Donor '11-'12-'13, '16-'17-'18
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Are you asking how much GM makes or the dealer? A dealer probably makes $5,000 - $8,000. It would be impossible to guess for GM as you would have to factor development costs, actual production cost, warranty costs, etc. If I were completely guessing, I bet GM makes $15,000 to $20,000 per car on average over its production life but who knows, that's a complete guess.
Team Owner
Joined: Aug 2007
Posts: 136,140
Likes: 2,433
From: I live my life by 2 rules. 1) Never share everything you know. 2)
St. Jude Donor '11-'12-'13, '16-'17-'18
Are you asking how much GM makes or the dealer? A dealer probably makes $5,000 - $8,000. It would be impossible to guess for GM as you would have to factor development costs, actual production cost, warranty costs, etc. If I were completely guessing, I bet GM makes $15,000 to $20,000 per car on average over its production life but who knows, that's a complete guess.
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I work with a lot of manufacturing companies in my job and the profit margin varies widely... even in similar industries. Unless someone had inside info, it would be impossible to make an accurate prediction IMO.
Melting Slicks
Joined: Feb 2000
Posts: 3,145
Likes: 537
From: Upland CA
Some numbers from my Z51 3LT AE4 Coupe order:
MSRP $75445
Invoice (Edmunds) $68,128
From the GM OrderWORKBENCH printout (these prices are not available and the footnote says "Pricing shown for illustration purposes only"). Supplier and GMS price would be a couple hundred more than Invoice.
Seems like dealer cost to MSRP is about 9-11% depending on options selected.
Good money for the dealers when the model series is new. I remember getting my 2008 C6 for well below the published invoice amount. I think it was close to break-even for the selling dealer.
So... these are now the good times for Chevy dealers with C7 allocation.
As for GM, the per car profit is higher because they don't have to offer incentives to sell the car. Of course they do have to recoup development cost and cover warranty claims. All-in I doubt GM makes much more than 5-10% total net on the Corvette program.
MSRP $75445
Invoice (Edmunds) $68,128
From the GM OrderWORKBENCH printout (these prices are not available and the footnote says "Pricing shown for illustration purposes only"). Supplier and GMS price would be a couple hundred more than Invoice.
Seems like dealer cost to MSRP is about 9-11% depending on options selected.
Good money for the dealers when the model series is new. I remember getting my 2008 C6 for well below the published invoice amount. I think it was close to break-even for the selling dealer.
So... these are now the good times for Chevy dealers with C7 allocation.
As for GM, the per car profit is higher because they don't have to offer incentives to sell the car. Of course they do have to recoup development cost and cover warranty claims. All-in I doubt GM makes much more than 5-10% total net on the Corvette program.
Racer
Joined: Sep 2000
Posts: 455
Likes: 7
From: Peoria AZ
I think that gthal was reasonably close. To MSRP, dealers have got a $6-$8K spread to so-called Dealer Invoice plus at least another $3-$5K spread to REAL Invoice. And you thought that buying at Dealer Invoice was "rock bottom" and the Dealer made next to nothing! GM itself is making at least $15-$20K on each $60-$80K car. Making only 30,000 cars a year, there are a whole lot of development, manufacturing, advertising and warranty costs involved that have to be factored in.
Keep in mind that the larger Dealerships have substantial expenses just covering the Floor and Lot interest for vehicles as well as large internal overhead expenses. They still have to clear $3-$4K on each vehicle to stay in business. Obviously, volume counts especially with Vettes. And quick turnovers on trades can double those profits.
Right now, at MSRP, they are putting away a 'lot of nuts' for a cold winter. My best guestimate.
Keep in mind that the larger Dealerships have substantial expenses just covering the Floor and Lot interest for vehicles as well as large internal overhead expenses. They still have to clear $3-$4K on each vehicle to stay in business. Obviously, volume counts especially with Vettes. And quick turnovers on trades can double those profits.
Right now, at MSRP, they are putting away a 'lot of nuts' for a cold winter. My best guestimate.
Pro
Joined: Jul 2013
Posts: 638
Likes: 0
From: Phoenix AZ
As a business owner (not in the auto industry) that manufactures, and is a dealer of other products and does retail, I would say the dealer is seeing an $8k or $9k margin on the C7s @ MSRP. Plus they make some on kick from any financing and warrantee sale, etc. As for GM, I would say they've GOT to see at least 30 margins, realizing $16k to $20k per unit.
Advanced
Joined: Aug 2013
Posts: 96
Likes: 8
I think that gthal was reasonably close. To MSRP, dealers have got a $6-$8K spread to so-called Dealer Invoice plus at least another $3-$5K spread to REAL Invoice. And you thought that buying at Dealer Invoice was "rock bottom" and the Dealer made next to nothing! GM itself is making at least $15-$20K on each $60-$80K car. Making only 30,000 cars a year, there are a whole lot of development, manufacturing, advertising and warranty costs involved that have to be factored in.
Keep in mind that the larger Dealerships have substantial expenses just covering the Floor and Lot interest for vehicles as well as large internal overhead expenses. They still have to clear $3-$4K on each vehicle to stay in business. Obviously, volume counts especially with Vettes. And quick turnovers on trades can double those profits.
Right now, at MSRP, they are putting away a 'lot of nuts' for a cold winter. My best guestimate.
Keep in mind that the larger Dealerships have substantial expenses just covering the Floor and Lot interest for vehicles as well as large internal overhead expenses. They still have to clear $3-$4K on each vehicle to stay in business. Obviously, volume counts especially with Vettes. And quick turnovers on trades can double those profits.
Right now, at MSRP, they are putting away a 'lot of nuts' for a cold winter. My best guestimate.
And on top of that on the Corvette it's also there to get people in the door and into other cars.
Pro
Joined: Jul 2013
Posts: 638
Likes: 0
From: Phoenix AZ
Technically from my understanding dealer invoice is what they pay, but at the end of the year they get what is referred to as holdback. Usually runs between 3-6% of the invoice. Dealers don't make money on cars though, service is where it's at, that's why they can sell a car at a loss if they know they'll make it back over the car's lifetime.
And on top of that on the Corvette it's also there to get people in the door and into other cars.
And on top of that on the Corvette it's also there to get people in the door and into other cars.
Racer
Joined: Sep 2000
Posts: 455
Likes: 7
From: Peoria AZ
C7_Z51, Dealers DO NOT "break" or take a loss when selling a new vehicle at so-called Dealer Invoice (Dealer Invoice and GM Invoice are NOT the same)! Yes, there are quarterly (maybe monthly), semi-annually and annual holdbacks...kickbacks and whatever sales incentives that come available but they cannot survive on just service. Service helps but dealerships still need initial sales income (like a homebuilder) just to make the monthly 'overhead' nut. Think of the 5 Big Boys that do a huge out-of-state sales business. They won't ever, most likely, see one of those cars in one of their service bays. Me, I drive today less than 7-8K miles a year with two new cars. I hope a dealership isn't counting on me for ongoing revenue and I have to believe that a sizeable number of members of this forum do the same (read 'garage queens') especially in northern climes. This is the first year that I'll be able to enjoy my Vette year around now that I'm in southern AZ.
Pro
Joined: Jul 2013
Posts: 638
Likes: 0
From: Phoenix AZ
C7_Z51, Dealers DO NOT "break" or take a loss when selling a new vehicle at so-called Dealer Invoice (Dealer Invoice and GM Invoice are NOT the same)! Yes, there are quarterly (maybe monthly), semi-annually and annual holdbacks...kickbacks and whatever sales incentives that come available but they cannot survive on just service. Service helps but dealerships still need initial sales income (like a homebuilder) just to make the monthly 'overhead' nut. Think of the 5 Big Boys that do a huge out-of-state sales business. They won't ever, most likely, see one of those cars in one of their service bays. Me, I drive today less than 7-8K miles a year with two new cars. I hope a dealership isn't counting on me for ongoing revenue and I have to believe that a sizeable number of members of this forum do the same (read 'garage queens') especially in northern climes. This is the first year that I'll be able to enjoy my Vette year around now that I'm in southern AZ.
Advanced
Joined: Aug 2013
Posts: 96
Likes: 8
C7_Z51, Dealers DO NOT "break" or take a loss when selling a new vehicle at so-called Dealer Invoice (Dealer Invoice and GM Invoice are NOT the same)! Yes, there are quarterly (maybe monthly), semi-annually and annual holdbacks...kickbacks and whatever sales incentives that come available but they cannot survive on just service. Service helps but dealerships still need initial sales income (like a homebuilder) just to make the monthly 'overhead' nut. Think of the 5 Big Boys that do a huge out-of-state sales business. They won't ever, most likely, see one of those cars in one of their service bays. Me, I drive today less than 7-8K miles a year with two new cars. I hope a dealership isn't counting on me for ongoing revenue and I have to believe that a sizeable number of members of this forum do the same (read 'garage queens') especially in northern climes. This is the first year that I'll be able to enjoy my Vette year around now that I'm in southern AZ.
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MSRP - Invoice - Dealer Cost
Why guess when the RPO spreadsheet is available here:
http://forums.corvetteforum.com/atta...eet-rev-k2.xls
Why guess when the RPO spreadsheet is available here:
http://forums.corvetteforum.com/atta...eet-rev-k2.xls
Last edited by E.T.D. Corvettes; Nov 1, 2013 at 12:15 AM.
Pro
Joined: Feb 2012
Posts: 545
Likes: 85
How much GM makes per Corvette sale is a complicated and probably poorly posed question. The big issue (uncertainty; point of argument within GM I'm sure) is how to allocate all sorts of indirect and future projected costs. Example #1: What is the "cost" (worth) of helping or hurting GM's CAFE? I'm guessing it's at least $2,000 per vehicle per MPG. Conclusion: discount Volts and mark up Corvettes. Example #2: I have reason to believe that warranty costs and recall potential are a significant and unknown expense. How much would you add to each C7's cost to account for that? Example #3: The LT-1 wasn't cheap to develop, but it's similar to engines that are and will be used on other GM products. How much do you add to each C7's "cost" to absorb its share of LT-1 R&D?