Zora_Vette

It is already a wildfire, adding a little lighter fluid won't do much

tcinla

Say, I see the the moderator(s) closed the "Zerv02, THANK YOU" post/thread. I mean the first post was pretty ridiculous knowing what we know.

Anything stopping the closure of this one or has it not gone off-topic far enough yet?

Foosh

I think that lately this has turned into an intellectually interesting discussion of production, marketing, and pricing theories and strategies. That's quite a change from the pissing contest it turned into from time to time. Some of us enjoy these more sophisticated discussions. If you're not interested, just move on.

JerryU

Reminded of a real world price elasticity example. It was ~June and at a senior staff meeting we discussed what could be done to get some additional margin dollars. Our CFO suggested raising the price 5% of our high volume welding machine that sold for ~$2000. Great guy but came from a service industry. My boss, the president, came from a division selling $500,000+ CNC cutting machines mostly direct and was not as familiar with the high volume products sold only through distributors.

We had a two part variable and fully burdened cost system and I knew those numbers well for that product. We had gained share by matching the price of the industry low cost producer so it was a slim even variable margin (less overhead labor etc) I went to the board and drew a graph showing variable margin at current and new suggested price versus volume and the possible “lose” in margin dollars with the expected volume loss! Did not convince them.

Two months later, as I expected, the volume reduced about where I predicted. Boss was impressed with my prediction BUT the VP operations was about to lay some folks off on 2nd shift (costly in $'s and morale) and what could I do! Too late, as I told them, to rescind the price increase as the competitors were seeing blood! Instituted a “Bakers Dozen” promotion for large distributors with multiple stores to stop the bleeding, which it did but that cost about 8%! Fortunately made up losses on a new high margin product where we had solid patents and were in a position to set prices! Exceeded forecasted profit (and made bonuses) for the year!

Never had folks 2nd guess prices after!

TurboJunky

So if you understand the market place, why mock a comment about 169k Vette if it can trash hyper cars costing twice as much?
Huracan Performante starts at 275k
488GTB starts at 255k
Aventador starts at 415k
720S starts at 285k
Ford GT is well over 400k

Didn't the engineering team state that the ZR1 is at the limits of what their current platform can do?

The margins at 169k will be gravy for GM and i think the plan is to keep selling the C7 alongside it. Risky? Yes, but everything about electing to go mid engine is.

mschuyler

Because volume would plummet. It's not about "trashing" more expensive cars. It's about building and selling the ones you produce.

Foosh

Because if you understand the market place you'd understand there's no reason to mass produce a $169K 2-seat sports car because the demand isn't there. There's a reason most exotics mentioned above are largely hand-built and are produced in such low volumes.

Need I remind folks one more time, that only about 1400 $130K+ ZR1s have been ordered and sold to date, with an expected total number of sales at 2K annually? The only reason it makes economic sense to produce it is because it's basically just a C7 with high performance components bolted on as it move down the assembly line with all the base Stingrays.

There is no credible indication that the C7 will continue production along side the ME.

TurboJunky

Maybe they want to cut costs and increase margins?

Its all speculation but somewhere the numbers looked really good to GM and that is why they are moving in this direction. I hope 169k isn't the final price but I am not going to be shocked either.

If it embarrasses cars costing way more on the track, the price is justified. Will it sell? Guess we will find out.

jefnvk

Because those cars rely in large part on exclusivity for sales. Sure, some people buy them for performance, far more buy them as a luxury good where that last little bit that matters on a track is simply irrelevant. The Corvette has always been a car the common person could afford, which GM cranks out more in a year of than some supercars crank out over an entire model line. IF you had the $400k for an Aventador, its rather unlikely you would buy a $160k Corvette even if it ran a second quicker on the track because of performance, unless your main purpose of buying it was to track it.

Foosh

I've seen contradictory sentences before, but the one in bold above is a masterpiece. You have no idea what direction they're moving in, but simple laws of supply and demand at various price points suggest they're not moving in the direction you seem to think they are.

Drastically raising the price and the resulting reduced demand is not often an effective way to reduce costs and increase margins. Mass production and volume sales are the normal ways of reducing price per unit and increasing margin. That's precisely how Corvette has been able to undercut the price of similar performing cars for so many years.

By most accounts the Ford GT program is break-even at best, but most likely a money loser. It's written off in the name of marketing expense.

Low volume almost always means high price, and generally that means much more than $169K in the world of high performance cars. They'll probably build a high-end version near that price, but they can only afford to do so if it's produced on the same platform as, and with 10s of thousands of lower-end ME models starting at half or less than that price.

jcsperson

That's not how economies of scale work.

If the price is right, if the look is right, and if the performance is better than a C7, they'll sell all they can make even if it doesn't "embarrass" super-expensive cars. Though I'm sure it will embarrass many of them.

TurboJunky

It was a bad sentence. I was meaning to say that the move to mid engine platform looked good. But that's fine i'll take the ribbing.

If anything, you guys are calming me down this price is real.

jefnvk

Serious question: had I created a thread that said the base price would be $130k, $89k, $240k, or any random number, and put confirmed next to it, would you believe it?

I can only buy the notion of a $169k base price, and ME and FE being produced at the same time, IF this is a new car (a la the Ford GT), not a Corvette. It makes no sense to blow up your mass produced, affordable to most, profit making sports car to chase exotics business.

pietro c7

mschuyler

I'm thinking the want to increase sales, myself, which will cut costs and increase margins.

nyca

The C7 setup is going to be rebirthed as a premium sport SUV (Cayenne, Urus, etc), the C8 the mid-engine sports car. That's where the market is - premium front engine sport SUV, and a mid engine sports car. Those are the two product lines Bowling Green will produce.

jcp911s

Great post, as "Price" is not just about the absolute value of a product, but also about the price of an equally valuable competitive product, and the priorities of the buyer.

The marketing concept is "segmentation" based on "differential advantage"... of the 20 things a buyer considers, what are the one or two factors that close the deal... and price is only one consideration... and often not the most important consideration.

Is there one of these where my product has a clear advantage to a certain group of customers? How do we leverage that? You are really dealing with the psychology of the buyer... art not science.





In competitive analysis, its called "market differentiation" or "competitive advantage".

JEFFWC8

I have been under the impression the base will be the initial offering and will be under $100K. If the base starts at above that mark perhaps it could option up significantly more but I have a hard time believing this. I'm all in for a base C8 under the $100K mark. I might consider a higher price point even for a base model but depending just how capable the vehicle ends up being. I have considered used Italians but those cars at under $200K carry an ownership premium that keeps me from writing the check.

JerryU

'sYou may be happy with a C8 close to $100,000 but the majority of folks buying Corvettes would not! I recall Tadge's comment prior to the first builds about what the C7 sales had to be or it would be the end of the Corvette! C6 sales had been: 11,600 in 2012; 13,500 in 2011; 12,000 in 2010! The Corvette was not viable at those leverls.

Looking at the pics of the cars in Germany, the brakes, the 305 rear tire size and the small rear spoiler- this is NOT a Ford GT killer. It will be priced closer to the C7, IMO. Now there could well be a "poor mans" Ford GT killer version with bigger carbon brakes, larger tires and a 650 hp engine. The larger size intercoolers needed, large rads (assuming one on each side,) bigger coolers for the trans and engine oil etc would require more room and probably larger rear fenders etc. That version could cost ~$150,000; but that is NOT the C8 that was in Germany.

We'll soon see!

jcp911s

Look at it from the perspective of a buyer. When i bought my 2016 Z51, I cross shopped a Porsche Cayman. I am a long-time Porsche owner (at the time I owned 3) and am a PCA Instructor. I retired my race car, and wanted something I could drive everyday, drive to the track, do some laps and drive home.

A Cayman S with all the good track stuff (PDK, PASM, seats, etc, etc) stickered at about $78K... with not a lot of discounts. My 1LT Z51 with A8 (concession to my wife), and Mag Shocks went out the door from Chriswell at $61K.

Now I'm not a PhD, but as much as I love Porsches, and as nice as the Cayman is, thats close to $20K with sales tax, and the Corvette will kick a Cayman in the *** on the track. I love this car. No brainer.

But for $5K difference, I'd still buy the Porsche all day long. Just how it goes.