MECF_728x90_top

Collapse

Announcement

Collapse

Official C8 Build and Price, Visualizer, Pricing, and Ordering Information

Coupe/HTC Build & Price: https://www.chevrolet.com/performanc...d-price/config
GM’s C8 Info Site: https://www.chevrolet.com/upcoming-v...ation-corvette
C8 Order Guide 12/2: https://eogld.cloud.gm.com/NASApp/do...ehicleID=21905
Visualize Your C8:https://visualizer.chevrolet.com/ui?...US&channel=b2c
Also please look at our stickies in each of the four major C8 sections
See more
See less

Losing money on sub 80k builds

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Losing money on sub 80k builds

    I found this article on MT very interesting. Supposedly GM is losing money on sub 80k builds on the new C8 and likely means the 2021 will see at least a couple thousand dollar price increase. Ok guys start adding the options, we need you all to order 80k+!!

    https://www.motortrend.com/news/sour...ay-loss-leader
    Last edited by brad66; 11-29-2019, 11:39 AM. Reason: Fix title

  • #2
    Thanks TtiME for sharing that article. It is “interesting” but worse than click bait. In fact, erroneous ****.

    Folks can avoid clicking on the link to read it for what is says, is that for everyone sold under $79,995, GM loses money, only makes it up on higher optioned $80K+ sold C8’s.

    The C8 was never formally approved for production until a business case (zero emotion, but a dollar and cents analysis) showed the C8 would again be strongly profitable.

    Facts:

    *GM made a net profit of around $2,000,000,000 on C7 sales. Bob Lutz stated that behind pickups and SUV’s, it has beenone of GM’s best financial models in recent times.

    * GM sold around 200,000 C7’s.

    * The profit margin per car for the C8 remains very healthy, on the same order. We will see this once we start to see employee pricing.

    * In the interim, NADA Guides says $55,012 is the dealership price for an entry 2020 C8.

    * There is a nice margin between what GM sells a C8 to its dealers and what it costs GM to make it, e.g., another $5,000 or more.

    Click image for larger version  Name:	247DD1EC-95FF-42BF-816E-D21DE73E68A0.jpeg Views:	0 Size:	254.7 KB ID:	92912

    https://www.nadaguides.com/Cars/2020...-w-1LT/Pricing
    GBA Black; HTO Twilight/Tension interior; Z51 & Mag Ride; E60 lift; 5ZZ high wing; 5VM vis CF ground effects pkg; FA5 interior vis CF; ZZ3 engine appearance; 3LT; Q8T Spectra Gray Tridents; J6N Edge Red Calipers; SNG Edge Red Hashmarks; VQK Splash Guards. Separately getting from my dealer RCC Edge Red engine cover and 5JR vis CF mirror caps.

    Lifetime, annual contributors, and 20+ year members of National Corvette Museum.

    Comment


    • #3
      Wow, MT got the dyno results wrong and then followed up with a messed up pricing story too! Go figure.

      Comment


      • #4
        For those who are decimal point and comma challenged, $2,000,000,000 divided by 200,000 cars averages out to $10,000 per car. Almost loaded pick up truck margins.

        Comment


        • #5
          Originally posted by John View Post
          Thanks TtiME for sharing that article. It is “interesting” but worse than click bait. In fact, erroneous ****.

          Folks can avoid clicking on the link to read it for what is says, is that for everyone sold under $79,995, GM loses money, only makes it up on higher optioned $80K+ sold C8’s.

          The C8 was never formally approved for production until a business case (zero emotion, but a dollar and cents analysis) showed the C8 would again be strongly profitable.

          Facts:

          *GM made a net profit of around $2,000,000,000 on C7 sales. Bob Lutz stated that behind pickups and SUV’s, it has beenone of GM’s best financial models in recent times.

          * GM sold around 200,000 C7’s.

          * The profit margin per car for the C8 remains very healthy, on the same order. We will see this once we start to see employee pricing.

          * In the interim, NADA Guides says $55,012 is the dealership price for an entry 2020 C8.

          * There is a nice margin between what GM sells a C8 to its dealers and what it costs GM to make it, e.g., another $5,000 or more.

          Click image for larger version Name:	247DD1EC-95FF-42BF-816E-D21DE73E68A0.jpeg Views:	0 Size:	254.7 KB ID:	92912

          https://www.nadaguides.com/Cars/2020...-w-1LT/Pricing
          Totally agree John. As an owner myself you don’t do jobs that don’t make money!! I would like to hear how the source came to this? I’m guessing theres a lining of truth like if you took cost to build at retail or “Cost of doing business” such as tools and added those in. I just posted it as I thought it was interesting.

          Comment


          • #6
            Yes, it is interesting, and as ReddyZ06 posted above, MotorTrend is the same media who brought us the seriously flawed C8 has 630 HP dyno test results.

            I used to have such admiration for such auto media. Now we have to go the new for-free media, such as this place, to get accurate info. We have here a team of 4,000+ who collectively find and share real facts.
            GBA Black; HTO Twilight/Tension interior; Z51 & Mag Ride; E60 lift; 5ZZ high wing; 5VM vis CF ground effects pkg; FA5 interior vis CF; ZZ3 engine appearance; 3LT; Q8T Spectra Gray Tridents; J6N Edge Red Calipers; SNG Edge Red Hashmarks; VQK Splash Guards. Separately getting from my dealer RCC Edge Red engine cover and 5JR vis CF mirror caps.

            Lifetime, annual contributors, and 20+ year members of National Corvette Museum.

            Comment


            • #7
              BGA plant upgrades to get ready for the C8 were $900M. The cost to develop the C8 was $900M more. GM would not have invested $1.8B for a losing financial prop Corvette. Nor would they have invested that amount of money for a C8 that half of its sales were financial losers with $80K as the break even point.

              Comment


              • #8
                I don't think ANY brand new model for ANY manufacturer comes 'out of the box' at breakeven..... Burdened with development costs, tooling and start up manufacturing I really don't see the C8 making a profit for a couple of years. Once the start up is overcome, I'm quite certain that the business plan promises a significant per unit profit. Obviously, the break even moves significantly with the inclusion of high margin options, hence the worst case financially is the basic model. I, for one, am pretty sure the MT article is on the money, but it really shouldn't surprise anybody....

                Comment


                • #9
                  Amortization of development costs is like depreciation of capital assets. The faster you amortize, the less profit made in the short run. But once those costs are fully amortized, then the real money is made.

                  Comment


                  • #10
                    MT, C&D, almost as bad as AP (associated propaganda) for putting out fake news.

                    Comment


                    • #11
                      Thanks for posting info so I didn't have to click on the link to Motor Trend. As I've said before, I don't know about you guys, but I find the site unreadable on desktop. It's like they designed the site for mobile visitors and said "f*** desktop visitors."

                      Comment


                      • #12
                        Just looking at the Corvette, according to the analysis Morgan Stanley recently conducted for GM, planned profit for Corvette in 2020 is 25.5%, an increase from the expected 23% for Corvette in 2019. (note; this analysis was done before the UAW strike and also assumed 40,000 in unit sales in 2020)
                        Shadow Gray Metallic w/Natural, 3LT, Z51, Mag, Lift, Spectra Gray Trident, Edge Red Calipers, Body Color Accents.

                        Past owned; 1984 C4, Medium Gray Metallic, Coupe, VIN# 1004 : 1981 C3 White Coupe, 1980 C3 Dark Claret, Coupe

                        Comment


                        • #13
                          I wonder if they will post another retraction article like they did with their ridiculous dyno story?

                          Comment


                          • #14
                            Originally posted by TtiME View Post

                            Totally agree John. As an owner myself you don’t do jobs that don’t make money!! I would like to hear how the source came to this? I’m guessing theres a lining of truth like if you took cost to build at retail or “Cost of doing business” such as tools and added those in. I just posted it as I thought it was interesting.
                            The author if the article made a mistake and called porsche instead of corvette.

                            GM makes plenty of momey and even more important GM gets so much free press on the corvette and its posiitive image spreads throughout the chevrolet brand and even all of GM..

                            what is the value of all the positive press the entire corporation gets because the corvette (a GM product)

                            id suggest the value of that transcends the millions of dollars sales generate.

                            let me add in one more valuable asset of the corvette. Its relatively low volume production run each year the technology developed for the corvette as well as production techniques are later used for other GM products such as pickup trucks with all the bugs worked out before consumers take possession of them.

                            think back to the c5 and c6 hydrofirmed steel frame rails that also went into making GM pickup trucks chassis quite rigid.

                            of course the v8 motors are shared in design.

                            watch and see how the central backbone chassis if the c8 with 3 bedford plates are going to be used in the production of GM s upcoming electric vehicles in 2022.

                            the bedford plates will become individual units for battery cell packs in the ev s.

                            these bedford plates in the c8 are bolted and glued to the central backbone tunnel ..

                            In my opinion this new chassis construction technique will replace unit body construction and allow a dramatic cost reduction in production and allow for each production facility to be flexible on chassis size for various products dependent on consumer demands..

                            with this chassis production flexibility should allow GM to get each of its production facilities closer to 100 percent utilization...

                            these are the values of what the corvette especially the c8 given to the corporation...

                            needless to say as corvette enthusiasts we can buy whatever options we want and never worry about sub 80 grand corvettes leaving the brand vunerable.

                            JMO
                            Torch Red exterior/ black interior z51 FE4 2LT or 1LT depending on when i get the call..Ill flip a coin at that moment..same for E60

                            Comment


                            • #15
                              Gm is not building cars to make $3000 they need people to buy cars for $80,000 that's the sweet spot otherwise it doesn't work its like credit card bill if you pay the minimum you will pay it off in 12 years but if you pay 4 times that amount it will take 3 years that the sweet spot

                              Comment

                              MECF_728x90_bottom

                              Collapse
                              Working...
                              X