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A recession and the C8

Old 11-20-2018, 01:07 PM
  #1  
Nobull
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Default A recession and the C8

Would a recession or a significant threat of a recession derail or temporarily suspend the plans of forum members to purchase the ME?
Related to this is that if the economy goes south what do you think of the possibility of GM "putting on hold the introduction of the ME, whether it be at the North American show in January or the NY Show. Personally, I see "clouds on the horizon" in the near term for new car auto sales in general and particularly for niche sports cars like the Corvette.
For most of us the Corvette is an expensive toy. Will we put these toys on hold when a recession hits? What say you forum members? An no, I am not a troll, and I love the
possibility of a ME, but I have a concerns.

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Old 11-20-2018, 01:14 PM
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NO ....recessions would have no impact on buying a new corvette.

recessions are good time to spend money.

Last edited by JerriVette; 11-20-2018 at 01:15 PM.
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Old 11-20-2018, 01:24 PM
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Originally Posted by JerriVette View Post
NO ....recessions would have no impact on buying a new corvette.

recessions are good time to spend money.
Especially if you get laid off. That's when you want to make unnecessary high $ purchases.

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Old 11-20-2018, 01:41 PM
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Read the posts made in 2008-2009 when the bottom fell out of new car sales(17 million in USA down to 10.5 million), including Corvettes. Took five years to recover.

Last edited by JoesC5; 11-20-2018 at 01:42 PM.
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Old 11-20-2018, 01:48 PM
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I bought my current Vette during a recession and got a great deal.

I think the car is so far along that a recession would not change GMs planned release date.
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Old 11-20-2018, 01:55 PM
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Tariffs on ALUMINUM will effect the cost of the car.
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Old 11-20-2018, 02:37 PM
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Originally Posted by Walter Raulerson View Post
Tariffs on ALUMINUM will effect the cost of the car.
Have you ever done the math? Tariff fear mongering looks a bit disingenuous.

It is simple, you can start with the two major aluminum components on a Corvette(spaceframe and engine block). Using Z06 weights as they are easy to find.

Aluminum space frame - 126kg
LS7 aluminum block - 49kg

Current aluminum rates are about $2.17 per kg, add the 10% tariff. Only a $38 increase on the two heaviest aluminum parts on a Corvette. Even adding other components, additional cost is minimal.

Last edited by blipit_; 11-20-2018 at 02:40 PM.
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Old 11-20-2018, 03:10 PM
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Consumer confidence is key... if you're worried you may lose your job, you're not going to take on debt; especially for a depreciating asset. If you're retired well maybe that's different. If you're the 1% it won't matter to you.
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Old 11-20-2018, 08:45 PM
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I'm fortunately in the position of just buying almost anything I want to these days. If the C8 appeals to me, nothing's going to deter my buying one. I don't think that GM will delay the release for any reason.
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Old 11-20-2018, 08:54 PM
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Let me get this straight....some people here are worried that a possible recession that hasn't happened yet (when the economy is currently booming) is going to affect the production and/or sale of a car that hasn't even been announced or is not currently being built?
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Old 11-20-2018, 10:18 PM
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Originally Posted by C7pimp View Post
Especially if you get laid off. That's when you want to make unnecessary high $ purchases.

Im sure those living hand to mouth who get fired at any time would not be buying any type of new car...good or bad economy..

I hear your angst and wish you the best in your search.


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Old 11-20-2018, 10:45 PM
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TARIFFS ARE CURRENTLY ON ALUMINUM $$$ are $$$
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Old 11-20-2018, 11:41 PM
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Originally Posted by z edge View Post
Let me get this straight....some people here are worried that a possible recession that hasn't happened yet (when the economy is currently booming) is going to affect the production and/or sale of a car that hasn't even been announced or is not currently being built?
Exactly. Sky's falling!!!!

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Old 11-20-2018, 11:45 PM
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First Harley, now Corvette!

Sky ISN'T falling, btw...
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Old 11-21-2018, 12:05 AM
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The timing of the release is very important, GM has no control over the economy and will focus on what they can control. Unfortunately, they do realize headwinds are ahead & so do many in the ever-changing auto industry. I know GM is adjusting and currently has plans of streamlining the company going into 2019 and beyond. Higher interest rates & tariffs will not only affect the consumers but many corporations that were able to borrow and control cost to keep their business growing. How will this affect the ME or other future projects I don't know. GM had a good 3rd quarter but to understand the source of these profits, one must understand the concept of operating leverage.

Being a capital-intensive business means having a high fixed cost base. A high fixed cost base means owning large factories and expensive equipment, as is true for GM and Ford. Fixed costs are fixed – they accrue whether or not the machines are idle or are working three shifts. When demand for the end product is low, revenues slow to a trickle and are unable to cover the cost of the idled machinery. When demand for the end product is high, a high proportion of each dollar of revenues in excess of the fixed cost line turns to profit. As such, the key to successfully running a high operating leverage business is to make sure that you have plenty of demand for your end product.

Legacy automakers are faced with a real conundrum. The real price of automobiles has more than doubled since the mid-1970s while median worker pay has remained stagnant over the same time. In addition, competition is fierce, and, with the exception of the shape of the hood ornament, products are largely commoditized. To top things off, the average car spends 90% of its time idled – sitting in a parking spot or garage, twiddling its mechanical thumbs until its owner returns. To add insult to injury that asset keeps depreciating on a monthly basis.

The surest ways legacy automakers have found to spur demand in the face of these significant headwinds is by loaning money to clients to buy the cars (“0% interest and no money down!”) or buying the cars themselves and loaning them to clients in return for a lease payment. I consider the customers to be the companies’ joint venture partners in some sense, so the net amount of money loaned to them must be counted as investment spending.

One of my biggest concerns is that consumers and corporations got hooked on a drug I call easy money (LOW INTEREST RATES). which I believe helped grow this economy. Now the Fed wants to keep increasing them at a rate I personally believe is to fast for consumers and corporations to adjust. I get the inflation argument but this is a delicate dance if they act too aggressively we could go into a recession.

Read yesterday: The Fed has already put in place a path that they’re going to be increasing interest rates for the future. They’re talking about a December rate hike, three to four [increases] next year, and potentially more rate hikes in 2020.

Last edited by fasttoys; 11-21-2018 at 04:22 AM.
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Old 11-21-2018, 01:29 AM
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If the stock market has a long string of days like today - nobody will be buying new cars in a year. Hard to say where this is all going, but market corrections sometimes foreshadow recessions. A recession in 2019 or 2020 is very possible. It would not be good timing for GM, but they would be in good company.

If the current trade wars wars could be brought to mutually beneficial resolutions, things could turn around pretty quickly. I am not, however, holding my breath, as every country seems to be digging in. We'll see. My C7 could easily run another five years and keep me happy......by then I might be able to get a clean low mileage C8 for under $50K.
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Old 11-21-2018, 02:54 AM
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What starts a recession is somebody saying I think there is going to be a down turn so I am going to stop spending money on anything but essentials. Pretty soon other people do the same. Then layoffs come as production decreases and everybody says I told you so. Then more people cut back because their jobs may be on the line as well. Herd mentality and Down we go.

Bill
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Old 11-21-2018, 07:07 AM
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Originally Posted by Bill Dearborn View Post
What starts a recession is somebody saying I think there is going to be a down turn so I am going to stop spending money on anything but essentials. Pretty soon other people do the same. Then layoffs come as production decreases and everybody says I told you so. Then more people cut back because their jobs may be on the line as well. Herd mentality and Down we go.

Bill
And in this age of instant and constant information, there are so many "financial experts" out there that will just start saying stuff as click bait. Credibility and accountability are out the window, and everything said on the internet is taken as truth, then it gets picked up by the mainstream, kind of like the $170K base Corvette. lol
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Old 11-21-2018, 08:33 AM
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Originally Posted by Tool Hoarder View Post
Consumer confidence is key... if you're worried you may lose your job, you're not going to take on debt; especially for a depreciating asset. If you're retired well maybe that's different. If you're the 1% it won't matter to you.
You and JoeC5 are both correct. But, re the "1%", how do you think they got there? Not by making unwise financial decisions. So, it depends on just how high on the !% list they are. Pretty sure you agree, too. Joe's right in that car/vehicle sales took a huge dive in the recent recession which was very close to an all out depression.
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Old 11-21-2018, 10:49 AM
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Originally Posted by blipit_ View Post
Have you ever done the math? Tariff fear mongering looks a bit disingenuous.

It is simple, you can start with the two major aluminum components on a Corvette(spaceframe and engine block). Using Z06 weights as they are easy to find.

Aluminum space frame - 126kg
LS7 aluminum block - 49kg

Current aluminum rates are about $2.17 per kg, add the 10% tariff. Only a $38 increase on the two heaviest aluminum parts on a Corvette. Even adding other components, additional cost is minimal.
The tarrifs affect all sorts of parts and components beyond the raw aluminum that goes into the frame and engine. We'll begin to see the effects early next year when the new costs have worked their way through the supply chains.

Last edited by Zaro Tundov; 11-21-2018 at 10:52 AM.
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