How GM kept the price under $60K

[meyerweb]

https://www.motor1.com/news/361376/gm-explains-c8-corvette-price/amp/

A “portfolio” of Corvette models will help spread out costs.

One of the greatest mysteries surrounding the 2020 Chevy Corvette is how, exactly, General Motors was able to keep its starting price under $60,000. The current C7 Corvette Stingray, this generation’s entry-level offering with 455 horsepower (339 kilowatts), starts at $55,900. And yet, according to GM, the C8’s starting price could be within a stone’s throw of the C7. Motor Authority, also curious about the mental mathematics needed to justify the low starting price, asked GM how it kept the price so low.

General Motors president Mark Reuss told the publication the automaker would spread out the C8 Corvette’s cost over an expanded future lineup. Just like the C7, the C8 will have a “portfolio” of models. The new 2020 Corvette Stingray is just the beginning. Rumors of a hybrid and plug-in model are already swirling online. And there are rumors GM could expand the Corvette model into a brand with a sedan, SUV, and Corvette-based Cadillac offering. That’d be one way to spread development costs. Reuss also pointed to GM’s new Global B electrical platform as another reason for the price.

orvette Chief Engineer and Vehicle Line Manager Tadge Juechter attributed the C8’s remarkably low starting price to GM’s economy of scale, which allows the automaker to provide a lot of content in the vehicle without having customers pay for extras. Being part of a larger company has its benefits, according to Juechter.

However, it’s unclear if the sub-$60,000 price tag will be enough to entice new customers to the Corvette brand. The car has an aging customer base, and no brand automotive or otherwise can survive under such conditions. However, the sports car market isn’t precisely exploding right now, and that could lead to the C8 getting a very shaky sales start. Then again, while the sub-$60,000 price tag has garnered plenty of headlines, it’s unlikely it’ll start well below that figure. Add a few options, such as the Z51 Performance Package, and the price could easily jump to the mid-$60,000 range or more.

[ltomn]

There is not one person on this forum that will likely buy this car for $60,000. That is a "loss leader" price and, simply, not how the ordering system works. When one can go to Chevrolet online, and add no more then 1 or 2 options to a 2019 C7 Stingray, and quickly be up to $70,000, the message be get very clear. A couple of us got on the Chevy ordering page and ordered up the 2019 C7 Stingray with the 3LT and the Z51 packages and an array of carbon fiber and the price was quickly at $90,000.

The price spread on a 2019 C7 Stingray seems to go from $57,000 - $97,000. And this is for the coupe. Add $5k for the convertible. Does anyone really think that the C8 will be less money???? I strongly suggest it will be at least as expensive and potentially much more! The true cost of this car is about to appear. Just wait for the price of options from GM!!!

[Maxster]

There is not one person on this forum that will likely buy this car for $60,000. That is a "loss leader" price and, simply, not how the ordering system works. When one can go to Chevrolet online, and add no more then 1 or 2 options to a 2019 C7 Stingray, and quickly be up to $70,000, the message be get very clear. A couple of us got on the Chevy ordering page and ordered up the 2019 C7 Stingray with the 3LT and the Z51 packages and an array of carbon fiber and the price was quickly at $90,000.

At $90,000, still a bargain. Will get one as soon as I can.

[Ace]

So if I understand that right, they went for having a low starting price which maybe is a loss for them for the base model but with people buying packages and upcoming higher models they will compensate that?
But a Corvette Sedan or SUV? Please don't! I already hate that Ford is doing a Mustang E-SUV. Just give these cars new names. Porsche is pretty successfull with having SUVs and soon an electric car without putting the 911 nametag on them.

But the analysis "C8 getting a very shaky sales start" - At least what you can see on nearly every forum/site, they gained a lot of interest with the C8. I am positive that a lot of sportscar customers will go for the C8 even if they never had the C7 on their watchlist.

[John]

GM will make at least $7,500 on a no option C8. There will even greater profit as the builds climb into the $60’s, more on the +$70K C8’s, etc.

[JB]

In my opinion moving corvette into a brand position as porsche has done with a hot rod sports cuv would easily double corvette “brand” sales as it has done for porsche as it entered the cuv arena.

porsche sports cars have never been faster and sales as well...

most importantly to any business the same could be said of unit sales and more importantly profits

brand awareness as well.

GM would do well to allow a hot rod sports cuv aka the porsche macan or lamborghini Urus sales have shown this past year.

[Ace]

GM will make at least $7,500 on a no option C8. There will even greater profit as the builds climb into the $60’s, more on the +$70K C8’s, etc.

Wow, that's a pretty good number for the base model. Thanks for all the great informations here

[mpgxsvcd]

I have traditionally been an Infiniti guy and their Red Sport 400 HP cars start around $55k. However, nobody buys that car so it ends up with a $60-$65k sticker. The difference is that they are struggling so badly that they discount the cars $10k-$15k just to move them. Nissan pumps a ton of money into each car just to help the dealers stay a float.

Chevy doesn’t have to offer any incentives at all and they will sell 40k-50k of these cars at full list or above in the first year.

Right now coupe sales for most manufacturers are dismal. Jaguar(F-type), Infiniti(Q60), BMW(4-series), Mercedes,(C and E class)...etc. However, Chevy is about to hit a home run and sell a ton of these cars with no incentives whatsoever.

I think the C8 is going to be a HUGE financial success not only for Chevy but for the dealers as well. I can’t imagine how great it must be to sell hundreds of $60k+ cars at full list or above without even entertaining any discount offers. The future is looking very bright for Chevy right now.

[meyerweb]

GM will make at least $7,500 on a no option C8. There will even greater profit as the builds climb into the $60’s, more on the +$70K C8’s, etc.

I was going to say, their profit margin may be lower on a base model, but they won't be selling it at a loss.

In my opinion moving corvette into a brand position as porsche has done with a hot rod sports cuv would easily double corvette “brand” sales as it has done for porsche as it entered the cuv arena.

porsche sports cars have never been faster and sales as well...

most importantly to any business the same could be said of unit sales and more importantly profits

brand awareness as well.

GM would do well to allow a hot rod sports cuv aka the porsche macan or lamborghini Urus sales have shown this past year.

As long as any CUV is a true Corvette, and not just a badge engineered Blazer with a different grill and bodywork. Which is the kind of thing GM is prone to do, unfortunately. Anything less than a true, high performance, bespoke "Corvette" CUV, designed and built with on-road performance as key, would simply dilute the brand.

[Milliwatt Rob]

GM will make at least $7,500 on a no option C8. There will even greater profit as the builds climb into the $60’s, more on the +$70K C8’s, etc.

Yes, and the more they sell, the greater the amortization of the initial development cost. When fully amortized, the profits climb. They are going to want to crank out these cars to buyers at all price points (within reason).

[Klinn]

....that could lead to the C8 getting a very shaky sales start.

My dealer has already sold out their entire expected 2020 allocation. They are turning eager buyers away or taking reservations for 2021. Doesn't sound too shaky to me.

[ltomn]

At $90,000, still a bargain. Will get one as soon as I can.

You are so right! The C7 is a fine, fine car! My point was to show that options are where the company prints money! The $60K price is like looking at an auction estimate: the lower the low estimate, the more people that will raise their hand. After one starts, it's hard to stop! So goes the car ordering business. You sit down with your salesman and go through the order book. Add this, add that and before you know it, that enticing $60K car is ramped up to $90K. The company earns more money!!

[MikeC8]

I have traditionally been an Infiniti guy and their Red Sport 400 HP cars start around $55k. However, nobody buys that car so it ends up with a $60-$65k sticker. The difference is that they are struggling so badly that they discount the cars $10k-$15k just to move them. Nissan pumps a ton of money into each car just to help the dealers stay a float.

Chevy doesn’t have to offer any incentives at all and they will sell 40k-50k of these cars at full list or above in the first year.

Right now coupe sales for most manufacturers are dismal. Jaguar(F-type), Infiniti(Q60), BMW(4-series), Mercedes,(C and E class)...etc. However, Chevy is about to hit a home run and sell a ton of these cars with no incentives whatsoever.

I think the C8 is going to be a HUGE financial success not only for Chevy but for the dealers as well. I can’t imagine how great it must be to sell hundreds of $60k+ cars at full list or above without even entertaining any discount offers. The future is looking very bright for Chevy right now.

Hope so just bought some GM bonds 4 months ago.

[meyerweb]

My dealer has already sold out their entire expected 2020 allocation. They are turning eager buyers away or taking reservations for 2021. Doesn't sound too shaky to me.

I tend to agree with you, but it's still possible buyers will cancel their reservations once they see the actual price, with options. I don't expect many too, but one doesn't know until it happens.

[TOMDOM69]

you know they will be making a profit on the base.. I've read on these forums that they sell more 1lt base vettes then all other vettes combined.

even If they'd only make $5k on the base.. they make so much on options it isn't even funny. $100 black badges cost=cheaper then chrome. $100 black mirrors and wing cost= cheaper then any other color or the same at worst... those are the cheapest options people don't even blink at.
$500 stripes, $1000 stripes, $1000 red stripe on wheels, $1000 different color paint $400 fitted sheet.... they will make plenty of profit