Canada’s C7 Sales Crash

[John]

A 53% drop in Corvette sales in Canada for the month of July, compared to one year ago, is beyond dismal.

C7 sales in Canada last month totalled only 123 units out of a population of 37,000,000, e.g., only one Canadian in 275,000 bought one last month.

Note: GM is not sharing U.S. monthly sales results/month since a few months ago, e.g. only quarterly results being reported now.

[Frenzy36]

A 53% drop in Corvette sales in Canada for the month of July, compared to one year ago, is beyond dismal.

C7 sales in Canada last month totalled only 123 units out of a population of 37,000,000, e.g., only one Canadian in 275,000 bought one last month.

Note: GM is not sharing U.S. monthly sales results/month since a few months ago, e.g. only quarterly results being reported now.

John, With all of the Icy, Snowy ,Blizzard Conditions in Canada a Vette is hard to keep on the road. If GM would be Sooooo Kind to come out with an ALL WHEEL DRIVE ME, that would be a Total Game Changer for those who live in northern climates and open their product to a whole new consumer.

[John]

If the rumors are true (and this one has been repeated over and over and over in just about every automotive media), expect an AWD Corvette to arrive in 2022 or 2023.

[Frenzy36]

Hopefully the first models will be a great car and when they produce an AWD I will buy another. Here in Florida with the torrential downpours my AWD car is awesome driving down the highway when hitting areas of a inch or two of water in the low areas on the pavement. I have 2 identical ATS Caddys. One RWD and the other AWD which are my drivers and the AWD one comes in handy on trips to Miami rolling down 95 in the rainstorms.

[Bikerjulio]

Being in Canada, and close to one of the top 2 dealers in the country, my observation (from regularly looking at their new Corvette inventory), is that they have sold little to no C7's in the past 3 months. I've been seeing the same 13 cars for months and now it's 16 in stock. I'm sure my salesman can't wait till next year to fulfill all those orders he's taken on C8's, including mine

Hence my skepticism that GM will keep making FE Corvettes. Why on earth would they if sales have dropped off a cliff?

[John]

Good point. I have heard conflicting information from folks who have all been historically correct in what they have shared, so I am sure I do not know right now. One point however, is that the ZR1 was designed, contracts for parts let, for a two year model, and with its massive development costs (took an extra year to sort it out as it was originally going to be the 2018, 65th Anniversary model), and so it “came to market one year late.” I am therefore believing, and no source has told me differently, that at least the ZR1 will be around one more year, with a second source saying it will continue two more years.

But other than the ZR1, I have not a clue if/which other C7 models we will see next year, though maybe for the precipitous decline for C7 sales worldwide (down 25% from a year ago overall even with brand new the ZR1), we will see no other C7’s. than the ZR1 in 2020???

[Bikerjulio]

I'd think GM will only make cars to fulfill a demand. Are dealers ordering ZR1's on spec? I doubt it. Not knowing the relationship between a dealer and GM, I'm not sure how much risk they are taking with inventory.

If a dealer offers me $10k off MRSP who takes the hit for instance? Is the dealer tying up capital or are cars essentially on consignment?

I'm just saying that even with the ZR1, unless there's customers out there ordering, GM isn't going to produce. Or it just gets embarrassing. Is there evidence one way or the other on the demand for ZR1's?

[John]

Answering your questions in turn.

There are insufficient ZR1 for sold customers orders, with most GM dealers not even getting one. However, we do know of price gouging, so some dealers probably used their allocations they were granted for stock, and are hoping to get over list on those, or if they can not do that, sell them. I know my local, smaller dealers had more customers who wanted to pay sticker than they had allocations. And I know two major dealers who have more on their ordering lists still than they have been yet been able to get from GM. They could end the model year in that same circumstance.

When a dealer buys a Corvette (stock or customer orders), GM invoices them as they leave the Plant grounds. What I do not now, but will find out, is whether GM will pay “flooring”/carrying charges for 30 days (or maybe up to 60 days) if the dealer can not sell those they they put into dealer stock for stock.

If a dealer sells a Corvette for $10K under list, they eat that (except for the typical 2/3% “holdback”), and unless GM is, as they are now doing (except not on ZR1’s) putting in $6,000 flex cash to the dealer to move unsold 2017’s — which theymight later do on unsold 2018’s.

ZR1 demand is strong, with almost every one of those “dealer ads” which claim thousands under list” being determined to be bogus. Not saying a dealer here or there has not sold it to a “favorite” customer or a brother or sister for way under list, but so far there are about a 1,500, pre-sold ZR1 orders not yet delivered, and at a rate of making just 192/month, they will not finish 2019 ZR1 production until next March (as currently scheduled).

[Bikerjulio]

If a dealer sells a Corvette for $10K under list, they eat that (except for the typical 2/3% “holdback”), and unless GM is, as they are now doing (except not on ZR1’s) putting in $6,000 flex cash to the dealer to move unsold 2017’s — which they might later do on unsold 2018’s.

I'm not questioning your other answers, but I am questioning this one. I'm not talking old stock here. I'm seeing discounts of $5-7K published right now on 2019 cars. And I know for a fact that if I show up at the dealership, then that's just the starting point. I really don't think that the dealer is taking these cars in to eat the lost profit.

[John]

There is one other factor in the equation, and using your example, let us say that a 2019 GS lists at $7K, and the dealer is advertise-discounting it to $68K. The dealer bought that car from GM at a purchase price of $66K. And when they sell it, say at a final purchase price of $66K, they still get back from GM that 2% holdback from GM, e.g, a $1,200 profit in this hypothetical example.

Let us recognize that dealers make a lot of money in the first few years of a Corvette generation, and progressively during that generation when a new model is released. As one example, I paid $94K (list) for my first-week-produced Z06. I am guessing my dealer bought it for around $85,000, and the dealer later realized about $2K more profiton the dealer holdback. Good for them. They did a great job and I got a great car in return.

Not begrudging dealer making a lot of money at the beginning, because at the end of a generation, they are often literally losing many thousands of dollars per car (and of course all throughout the generation they have paid wages, taxes, light bills, etc). My small local Chevy dealer just sold his last 2017 Corvette and “we lost over $5,000 net” on that car alone (per my friend who is their Fleet Manager).

That dealership still has four unsold 2018 Corvettes to sell, and they are still buying 2019 Corvettes even though they know they will lose money on every one of them (exception: they got one ZR1 allocation and did sell it for list). They keep buying other (non-ZR1) 2019 Corvettes becuase they know that their 2020 ME allocation will be based on the number of 2019 Corvettes that they bought from GM.

[Bikerjulio]

sorry but color me skeptical. It sounds too much like the old joke

“We lose money on every sale, but make it up on volume”

[JB]

Let’s face it...gm is holding the line on incentives more so than they did in 2017...

the vehicle is five years in productions...

time for gm to pile on incentives,

my dentist rushed to fly out from NJ when he could get a grand sport brand new...

those deals dont exist today so sales sales are slower.

i understand holding pricing on the ZR1 but other models need more incentives from GM..

jmo but i believe c7 stingray, grand sport and even z06 pricing will get better as the c8 appears at Detroit...

many corvette enthusiasts actually plan to buy in the final final year of each generation production..

not sure if that hat will hold true as the generational design change not only elevates the starting price as rumored....or if the revolutionary changes make the demand on the last front engine corvette in its final year will be as high.

[Mobius]

Hence my skepticism that GM will keep making FE Corvettes. Why on earth would they if sales have dropped off a cliff?

That same thought has been in the back of my mind as well... In over 60 years of Corvette production, there has never been a period where two generations of Corvette have been produced simultaneously.

If the base C8 coupe is as affordable as many claim it will be (with many "experts" anticipating a $60,000-$70,000 MSRP), I don't see how the FE can compete.

[George]

Could it be that continuing a low volume C7 makes a lot of sense, from GM's perspective, in that all development costs are behind them. That would allow them more options if for any reason many folks don't like and or don't want the new C8. It is possible that a revolutionary change in Corvette design would not generate the sales that GM hopes it will, in the rapidly changing automotive market.

[John]

Let us assume some very, very probable or definite things about the ME.

* It will have six years more advanced, newer engineering and aerodynamics.

* It will have additional, standard, safety systems, e.g., BSP and AEB.

* It will have an exciting, extremely new exterior, looking a hell of a lot like the average $150,000 to $300,000+ exotic European MEs.

* It will have a newer looking interior.

So putting aside those who will not buy it because it doesn’t have a manual trans, won’t hold two sets of golf gas (maybe not even one), etc., and assuming it is priced so that the average, repeat Corvette buyer can afford it, why would one buy a “last generation” Corvette?

As for those who legitimately fall into the exclusions in the first half of the previous sentence, they will, IMO be more than compensated by new-to-Corvette buyers, taking the approximately 20,000 total, extended-length, 2019 model year sales to over 33,000 wanting to buy a 2020 ME (yet only 33,000 unit, max 2020 Corvette production capacity).

Hence, why I earlier wrote this thread:

https://www.midenginecorvetteforum.c...ur-fe-corvette