The Chevrolet C8 Corvette Stingray Is a Loss Leader

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Thread: The Chevrolet C8 Corvette Stingray Is a Loss Leader

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    The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Chevy loses money on every sub-$80K C8 sold, a source tells us

    Scott Evans Motor Trend Nov 29, 2019

    The all-new mid-engine C8 Corvette's impressive $59,995 starting price is only good for the first year, as we reported back in August, and unless it goes up by $20,000, Chevrolet will continue to lose money on low-trim cars, a senior GM source tells MotorTrend.

    We had a feeling the $59,995 starting price was too good to be true, and a GM source confirmed as much to us explaining the price would rise for the 2021 model year. This isn't much of a surprise, as the base price of a C7 rose nearly $2,000 in its second year and by another $2,000 the following year. While we still don't know how much the C8's price will rise in 2021, a more senior GM official tells us it would have to go through the roof in order to cover GM's cost.

    According to our source, the original budget for the C8 project assumed a starting price of $79,995. This is certainly reasonable considering the enormous amount of work needed to redesign the car into a mid-engine configuration, but it's a huge jump from the C7. In order to keep customers from revolting, Chevy is taking it on the chin and willingly losing money on every C8 it sells for less than $80,000. No doubt a factor in the C8's laundry list of options and dress-up parts is the hope buyers will load up their cars with extras and turn their $60,000 Stingrays into $80,000-plus Stingrays. The C8 Stingray Z71 3LT we tested rang up at $88,305.

    More critical are the base prices of upcoming performance variants including Z06 and ZR1. According to our source, the sweet spot for profit and volume is between $80,000 and $100,000. Once the car crests six figures, our source says, sales volume drops off precipitously. This will be a trick for Chevrolet, because the C7 Z06 starts at $82,990, which doesn't leave the company much room for an increase without upsetting customers and breaking out of the sweet spot in price and volume. The C7 ZR1, meanwhile, already starts at $135,090, so Chevrolet has more discretion to price the C8 ZR1 knowing full well it will be a low-volume car.
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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    I smell a price bump coming up.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    ...the original budget for the C8 project assumed a starting price of $79,995...
    ...Chevy is taking it on the chin and willingly losing money on every C8 it sells for less than $80,000...
    There's a METRIC TON of assumption right there, the way I read it. The author assumes the original price was still not going to make Chevrolet a dollar per car.
    - - - - -

    YET AGAIN, because it is a model from a once sales-dominating OEM, the pivot point of too many discussions is 'how many will they sell???' and 'how much profit will it make??'
    Corvette is a mile above such pedestrian chatter... or it certainly should be.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    I doubt this is accurate reporting.. it’s not like this car is using different metals or had a longer development cycle than the C7

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Quote Originally Posted by mbukukanyau View Post
    I doubt this is accurate reporting.. it’s not like this car is using different metals or had a longer development cycle than the C7
    Of course you do..................

    But do you honestly think the steps from C5 to C6 and C6 to C7 were the same as it was from C7 to C8?

    We've previously talked about the lower production through-put, so even if the car didn't have higher costs; production overhead and R&D are going to have a higher per-unit burden.

    The announcement to add, for the first time, a 2nd shift at Bowling Green was way back in April.

    It'll be OK, I doubt they'll build too many $60,000 Vette's anyway.
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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Dang. Well there goes my C8. Since the first year is supposed to be sold out already.
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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Cough Motor Trend Cough The same people who dyno'ed the car at how much? If you assigned all the NRE to the first year, they might need to sell for 80K. But that is not what accountants should or will do. NRE gets spread over the production life.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Does putting the engine in the middle really adds $15000 to the cost of production, or being mid-engined means there are fewer components it can share? If there every was a time to bring back the XLR.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Who knows. The way GM calculates costs is so convoluted they can say just about anything at any time.
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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Quote Originally Posted by Neanderthal View Post
    Chevy loses money on every sub-$80K C8 sold, a source tells us

    Scott Evans Motor Trend Nov 29, 2019

    The all-new mid-engine C8 Corvette's impressive $59,995 starting price is only good for the first year, as we reported back in August, and unless it goes up by $20,000, Chevrolet will continue to lose money on low-trim cars, a senior GM source tells MotorTrend.

    We had a feeling the $59,995 starting price was too good to be true, and a GM source confirmed as much to us explaining the price would rise for the 2021 model year. This isn't much of a surprise, as the base price of a C7 rose nearly $2,000 in its second year and by another $2,000 the following year. While we still don't know how much the C8's price will rise in 2021, a more senior GM official tells us it would have to go through the roof in order to cover GM's cost.

    According to our source, the original budget for the C8 project assumed a starting price of $79,995. This is certainly reasonable considering the enormous amount of work needed to redesign the car into a mid-engine configuration, but it's a huge jump from the C7. In order to keep customers from revolting, Chevy is taking it on the chin and willingly losing money on every C8 it sells for less than $80,000. No doubt a factor in the C8's laundry list of options and dress-up parts is the hope buyers will load up their cars with extras and turn their $60,000 Stingrays into $80,000-plus Stingrays. The C8 Stingray Z71 3LT we tested rang up at $88,305.

    More critical are the base prices of upcoming performance variants including Z06 and ZR1. According to our source, the sweet spot for profit and volume is between $80,000 and $100,000. Once the car crests six figures, our source says, sales volume drops off precipitously. This will be a trick for Chevrolet, because the C7 Z06 starts at $82,990, which doesn't leave the company much room for an increase without upsetting customers and breaking out of the sweet spot in price and volume. The C7 ZR1, meanwhile, already starts at $135,090, so Chevrolet has more discretion to price the C8 ZR1 knowing full well it will be a low-volume car.
    Finally GM gets it!

    True, it is not optimal to lose money on any vehicle, but establishing the C8 as a viable player is far more important and think most will sell in the $85K to 100K range over the next few MY's, so GM will make their money.

    It is what GM had to do with the original ATS but didn't and it never established itself so GM could make money.

    Short term pain = long term gain.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Quote Originally Posted by SierraGS View Post
    Finally GM gets it!

    True, it is not optimal to lose money on any vehicle, but establishing the C8 as a viable player is far more important and think most will sell in the $85K to 100K range over the next few MY's, so GM will make their money.

    It is what GM had to do with the original ATS but didn't and it never established itself so GM could make money.

    Short term pain = long term gain.
    Lose now gain later. This is a long term game. If le General has to lose 10 to 20 grand per unit at the beginning, get the cars on the road and into the conversation, then you do what you do. All's fair in the sales wars. It's how Toyota got the Pious shoved into the mainstream, and they're the best role model for how it's done IMO.

    It's like that new Soul electric, listing at 38 grand? LOL. Lose 11 grand per unit, list it around the price of a turbo or loaded lux Soul, and it will sell. It won't sell at 38, it's not a Tesla it doesn't have that cult following.

    Quote Originally Posted by TORRED1 View Post
    Dang. Well there goes my C8. Since the first year is supposed to be sold out already.
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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    None of us (barring hard data to the contrary) have any idea where the break even point for the C8 is, or -for that matter- where the C7's was.

    Let's not start the rumor the C8 is going to lose money based on a factless op-ed from Motor Trend.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Quote Originally Posted by Self Reliance View Post
    Does putting the engine in the middle really adds $15000 to the cost of production, or being mid-engined means there are fewer components it can share? If there every was a time to bring back the XLR.
    I remember Bob Lutz being asked about a rear engined Vette years ago and he said it costs $10k more with everything else being even.

    I don't think too many $60k Vette's have been produced and moving forward I'm quite sure there will be a price bump.

    It was a fantastic marketing move by GM that paid massive dividends in free advertising.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Costs go up when GM wants to fire people, suddenly a program becomes unaffordable.

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    Re: The Chevrolet C8 Corvette Stingray Is a Loss Leader

    Quote Originally Posted by big swede View Post
    I remember Bob Lutz being asked about a rear engined Vette years ago and he said it costs $10k more with everything else being even.

    I don't think too many $60k Vette's have been produced and moving forward I'm quite sure there will be a price bump.

    It was a fantastic marketing move by GM that paid massive dividends in free advertising.
    What about a mid engine adds 10K? Fiero was mid engine and was priced under the vette of the time. Toyota had the MR2. The only thing more expensive (and again I'd argue it is all NRE, not manufacturing cost) is the DCT transmission.

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