car junkie

I know, clarifying a point that needs to be made in today's terms.

From what I can tell Tesla and electric car fans in general do not seem to be very well informed of the underlying reality.

Telepierre

Oh boy! There really must be a lot of fear and confusion in the Corvette world these days (or at least in this thread) to bring up Elon Musk...and the TESLA.

So fear not Corvette brethren.

Sales numbers at hand the brand is doing just fine and I truly believe the brand is expanding with a low cost ME addition to toss Caymans and Boxters back were they belong in euroland.

It is that simple and please don't disturb Musk since he is extremely busy trying to get out of the hole he has dug.. and I know one day there will be a movie about it. Stay tuned.

Cheers.

lostsoul

Yes, now you mentioned it there was a spy photo at the same McDonalds 2 weeks after the c8s.

BillDurant

I agree it's not going away. GM didn't do all this R&D on the C8 to have the line run for 2 years. And again compare the Corvettes to other 2 seaters, not 4 seaters, totally impractical but fun

Tsharpe27

You are so right about the Camero. But, as the price of Corvettes go up,
the number of sales will go down. It is just a fact of economics. Also,
demographics certainly play a big role.

I love the Corvette, but the price of all cars each year exceed the increase in wages. So, you have a domino effect in what people can afford and will eventually buy. For instance, what is more important a house or a car?

My 2006 C6 was a bargain to me now, while at the time I thought it was very expensive and I had a pretty high household income.

I hope the Corvette keeps improving, but wonder what price is going to do
in determining sales.

senah

1. but the fact that more than 1 other planet in the solar system is ALSO experiencing climate change might throw a curve in that "science" and surprise a lot of people. earthbound suvs do NOT cause melting polar ice caps on mars! russian scientists are well aware of this fact but are not restrained by planetary big money controllers who want to add all the control crap that they can conjure up because it adds more expense to everything and, the more money people must spend, the more of it the monetary controllers can put in their coffers.

2. and lithium batteries don't catch on fire!

3. it's possible that musk is "aided" in his endeavors. i see a man who is under a lot of pressure and stress, but i think he has a lot of good in him as well.

sunsalem

LOL.
I can't remember which movie this is from...


EDIT: It's from Woody Allen's 1973 classic Sleeper.

dcbingaman

I agree with Ron. The Corvette is in a completely different market than the ME cars the C8 will compete with. Let me show you knuckleheads some real math on "recurring costs" vs. "amoritization of non-recurring costs". I'll keep the math simple for the non-engineers and non-business majors, (you know who you are). The C7 reportedly cost GM $250M to develop and retool. The model will run for 6 years and sell about 30,000 units per year. The amortization of the development costs is then $250M/ (6*30,000)~$1500.00 per car to pay for development. The recurring cost can be debated, but I'd be surprised if it costs GM more than $50k per unit, (on average). Figure a 20% margin and your talking an average dealer cost of ($50000+$1500)*1.2~$62,000. Sound familiar ?

Now let's look at the Ferrari 458. Let's assume it costs twice as much as the C7 to develop at $500M. Let's further assume it's recurring cost is 100% greater than the C7 at $100k. The 458 ran for about six years (2009 to 2015) and sold about 3000 units a year. Amortization costs are $500M/(6*3000)~$28,000 per unit. Dealer cost then is a minimum of ($100,000+$28,000)*1.2~$155,000K. With markups, etc., you can see how the retail MSRP can easily exceed $200K. Ferrari is a money-maker even selling 7000 units a year (total) because, well, its FERRARI. Nobody else in this business has sustained that level of profitability for decades as well as they have at their small size.

Let's now look at the C8. Assume as Tadge has said that development to mass produce an ME car is more expensive than a "bespoke" car like a Ferrari 458. Let's say $1B even. Let's further assume than the unit recurring costs are 30% greater than the C7 at $65000. Assuming a six-year production run of 30,000 units per year, GM costs are $1B/(6*30000)+$65000~$71,000. Again assume a margin of 20% and dealer cost is ~$85000. A little high for many C7 owners, BUT these are very conservative assumptions. I would expect that it will actuallly be $15-20K lower than this.

Bottom line is that GM can and will deliver a high performance ME car for ONE HALF the cost of its competitors because of their size and their decision to build a dedicated sports car factory inBowling Green that is highly automated. Almost everybody on this forum assumes that the product, in this case an ME sports car defines the cost. As an engineer in the aircraft business, I can tell you that the organization, the process use to develop and produce the product, and the number of units sold are much more important drivers of costs than product attributes.

sunsalem

Thank you, sir.
As a "business major," I appreciate your effort to put some meat on the bones of this discussion.

dcbingaman

Sunsalem, you are welcome ! Think what a lot of people miss in these discussions is both the importance of the business case and market expectations. These are what has driven the decision to go ME in the C8. Implicit in that decision, at least IMHO, is a price that doesn't drive more than a fraction of the Corvette buyer base away.

What many fail to appreciate is how bold this move is for GM and how very good they have become since 2008 in leaning out their company and in value engineering. That is what a "near death" experience does for a corporate culture. The C7 shows that they are REALLY good at it, and I would expect that the C8 will show they are world class. That, as a C7 owner is my hope and expectation.

Shaka

Me and Burt Rutan dispute this communist nonsense. Watch the moderator delete my post but leave NoBull's. Copy this while you can.

Rapid Fred

Nice analysis anybody can understand. I too live in the world of analyzing business opportunities -- and I work hard to get clients to always consider "distinctively different" alternative strategies. Just for fun...I won't run the numbers here but I wonder if they are also considering a strategy of seeking a higher margin (say 30%) on a lower volume of C8's while using fully amortized tooling and development costs to enable the parallel run of C7's at lower prices -- which would still be very profitable. This case would be premised on maybe 40K or more combined units per year with only a bit of overlap between the C7 and C8 pricing. Similar to Porsche and the 718-911. Engine forecast numbers would seem to be consistent with this strategy for the next 3 model years. This would certainly enable GM to "spread the risk" if the ME C8 is not as well received as most of us expect it to be.

I think the biggest risk there for GM would be alienating current C7 owners (many of whom are probably expected to be next in line for C8's) -- I bet at this point GM could make a business case for a slightly decontented and "refreshed" C7 starting just below $45K. However, that price-point would surely not be well-received by folks who just paid between $55K and $70K for their "base" C7's...but it could sell a ton more of C7's. (Might also risk some Camaro cannibalization? That would not be good)

Just fun stuff to bat around while staying in from the cold.

firstvettesoon

Not in the car biz but I believe in perceived value.

My "outsider" observation is that Corvette can not and should not be the every-mans sports car...not at this point. Maybe in the '50s-'60s, Corvette was in the same ball park as other great American sports-cars, pony cars etc. and more equally "attainable". Somewhere along the line I Corvette stepped out and above/beyond the competition. Performance went up as did the pricing and value and status...which then placed the Corvette on bedroom walls as a dream car...for the future. Still attainable, but we'd have to work for it.

This balance is critical. To maintain the feel of "exclusivity" and still sell enough to be profitable. I feel that once the dream is attained, I don't think Corvette owners want to see one on every block. They want to feel special. Same feeling that drive custom cars and Hot-Rod lovers.

This is why I think the model GM has used works. A "low/reasonable" cost entry level driver...and then several levels of up-performance to address personal needs and desires.

I think the ME will offer the same entry level "Sports-Car" and 4 or 5 levels up will be a world class "SuperCar" with potentially different skins.

BTW, Do we know anything about the manufacture of the body panels? Will it still be FG? Maybe they should go back and use the old soy based molded panels? If they can't use all CF. That stuff was tough...

Just my thinking... again... not in the biz...just feelings.

Shaka

That's where the Cadillac ME comes in. Vette sales are still good despite its well publicised problems. Caddy is slowly regaining it's long lost reputation for excellence but no where near Lexus.
The Caddy version won't have as many track days but success at the race track of the future LMP car may support such a low volume high end product in the $200g plus price range. Front engine Vettes will stay alongside mid engine cars for the unseen future. Push rod versions of the two platforms will be the volume sales. I pray that manuals will stay in both also. All very expensive manual 2017 Porsche GT3 6 speeds were pre sold and Porsche is bringing out a 928 replacement. Ferrari has both cars and Lamborghini is building a front engine car.
I only hope GM pushes the envelope on design.

It's a courageous move for GM and I wish them well.

XC6VETTE

Couldn’t agree more....bought some GM stock last week.

Speednet

Please avoid posting politically correct nonsense here. Obama's pronouncement of man-caused climate change "settled science" is utterly ridiculous and shows contempt of the actual scientific process.

Any human with half a brain can see that the Earth's climate has changed every year of its 4 billion year history. Of course there is "climate change". It's the "human caused" bit that is arrogant and far from proven.

It's also the quite obvious non-scientific shift from "global warming" to "climate change" that illustrates the rudderless lack of science being employed. It is indicative of what politicians do, not what scientists do. Which is the genesis of this nonsense.

mazurekd

SFCA1968

I think NOBull has inhaled too much tree smoke and also understand he is from the land of fruits, nuts and Nancy. The Corvette might go away in Cali but it will just evolve as someone else said. The Corvette is a way of life for many of us not just a "cool trendy vehicle" I had my first in high school in '68 and the Vette fire still burns in my heart as I drive my C7. Long live the Vette!!!!!!!!!
and lets let CA become its own country and build a wall lol

firstvettesoon

The climate change they were truly referring to was Political Climate.

If the issue were truly environmental alone, a better strategy would be to bring back the weeping Indian to help guide or guilt the world into striving for clean(r) water and air. To me, pollution control is more needed and attainable than wide spread "clean" energy for the near future...sure, it is inevitable and needed and will be welcome, but you can't do it over night. I think they started in the right direction decades ago and lost the will or demand somewhere along the way, probibly when they "found" more-cheaper oil.

We must invest and encourage new forms of energy, but this is done best by consumer demand rather than GOV mandate simply because of the political component.

Exciting breakthroughs in energy are very close. Glass batteries and molten salt reactors which may make nuclear energy much safer and cleaner and hydrogen potential.

The future is bright... if we can make it there...

yz250fPilot

There is NO scientific proof of this claim anywhere!

Your statement is nothing but a FAKE POST!