Camaro On Track For Slowest Sales in 20 years–Chevy Says “We Did it on Purpose”

There’s a problem and no amount of Average Transaction Price increases can fix it.

Last week we published news that Chevy and Ford were sitting on nearly equal inventories for Camaro and Mustang, with the caveat that Ford’s pile was enough for 72-days of selling, while Chevy’s was a beleaguered 129-days.

As a consequence, Chevrolet has come out swinging this week with spokesman Jim Cain telling AutoNews this was fully expected. “A year ago we were running out the old model, we had higher inventories and higher fleet sales.”

Cain also stresses Chevrolet is taking in an extra $3,584 per car compared to last year, “[the] car is doing really well.”

Echoing the claim, GMA‘s Alex Luft says Chevy told him not only was the higher pricing strategy intentional, they’re making money hand over fist on the 6th Gen.

In response I ask, then why Chevrolet are you producing so many?

camaro-made

As noted above Chevrolet is cranking out Camaros at the same clip Ford is Mustangs–but we all know Ford is doing that nasty fleet thing–so why GM, if you’re telling us you reduced fleet volumes and expect to sell fewer cars than Ford, are you still producing as many cars as Ford?

If as GM claims, they were expecting demand some 15-percent lower as they shifted attention to boosting ATPs, you would imagine some kind of basic supply and demand equation would have materialized and we would have seen production curbed by 15-percent or less.

From where I’m sitting there are two potential answers:

One, this was not expected at all, do we really think Chevrolet intended to sit on 129-days worth of inventory with roughly 130 selling days remaining in the year? If you do, I have premium real estate on the sun I’m willing to let go for pennies on the dollar because you’re such a nice guy.

The second is far more nebulous.

Luft claims GM is reaping huge economies of scale from the Alpha platform–despite its slow selling status across both Chevrolet and Cadillac–with R&D, tooling and production being shared across three models, allowing for a much lower break even point. Which I don’t doubt in the slightest, but I do doubt that it’s helping the car in the long run.

It would seem Chevrolet NEEDS to produce this many cars in order to take advantage of scale, but with cars languishing on dealer lots its simply shoving stock down throats that can’t swallow. Are Chevy’s hands tied when it comes to production, what is the knock-on effect of producing say 1,000 fewer cars per month?

With supply greatly outpacing demand prices will absolutely need to fall, Luft claims Chevy has padded margins enough to support heavy incentive spending on the car, but at that point we’re back to square one in terms of profitability while suffering through the ignominious headlines: Mustang eats Camaro’s Lunch.

Essentially, how long can Chevy continue to enjoy the benefits of scale if the sales simply aren’t there?

Comments