For decades, the Chevy Corvette has served as the informal gauge of the state of General Motors as an automaker and as a business: when the Corvette was perceived to be awesome, GM was selling cars, turning a profit, and taking names; when the Corvette disappointed, GM was likely in disarray. And while serving as GM’s barometer, the Vette did double-duty as Chevy’s halo car, making everyone most drivers wish that they had one. But not everyone can afford a Vette, which has commanded premium prices through its lifetime; this circumstance, in particular, makes the car sell in significantly lower volumes than the Chevy’s other, more mainstream-oriented offerings. Prime example: the Corvette sold 14,132 units in the United States in the 2012 calendar year; by comparison, over 21,000 U.S. customers opted for the Chevrolet Cruze in the month of December 2012.
But that’s not to say that the Corvette’s sales are underwhelming — quite the contrary: for a car that’s about to be replaced by an all-new model — the 2014 Corvette Stingray — the C6 sold well in 2012. But with that kind of low sales volume, one might think that The General might be taking a loss on the Corvette to drum up the image of the Chevrolet brand. This is not the case, as the Corvette turns a healthy profit by itself, according to President of GM North America Mark Reuss.
“This [The Corvette] makes as much money as any of the top-profit models in our company,” Reuss said. “That is why we do it.”
The engineer-turned-executive also confirmed that the Corvette begins life as a vehicle for the American market first and foremost, and that other markets are just extra gravy.
“From a business case, the car is done for North America first,” Reuss said. “Anything else that happens because we made a fundamentally sound car is extra benefit.”
The GM Authority Take
Not only is this good to know, it’s also music to the ears of performance car enthusiasts. Here’s to a bright, successful, and powerful Corvette future.
Comments
Per unit, the Corvette blows the Cruze out of the water profit wise. Small cars are a hard way for an automaker to make a living as small cars equal small profits, if any. Chevy has to sell lots of Cruzes (and lots more pickup’s and suv’s when small cars aren’t profitable) to make making them worthwhile.
“Small cars are a hard way for an automaker to make a living as small cars equal small profits, if any.”
Yeah, just look at how unsucessful Honda is. If Honda wasn’t selling the RL, they’d go bust!
From what I remember GM’s Corvette engineers secretly budgeted the C5 corvette development as continuous improvements on the C4, because the bean counters wanted to kill the Corvette.
This is a little politicking here.
While most of the time the Vette has been a high profit model but there have been times things were at risk. read Dave McClelland’s book Inside the Corvette and he details some of the dark times.
Note also Tadge stated his goal with the present Vette is to double production in different ways. Why? Because he stated if sales drop anymore than they are now they will be at risk. This is what the leader of the Corvette stated and he is correct.
The Corvette has shown a good profit but it also has slowly been losing sales and the owners are getting older like Cadillac.
There was a time when every kid in America wanted a Corevette and today that is no longer true. As the car got more expensive and competition form over seas has taken some of the attention away from the Vette. Watch for them to go after the youth more as they already have with the styling and look for the Cheaper Vette be pushed for those who are younger and can not afford a $70K Stingray or $90K Z06.
Ever wonder why cars like the WRX has taken hold. Younger buyers can just barely but they can afford them and afford to fix them up to their taste. Not so with most new Vettes.
I think the C7 will be very interesting to watch and see how GM works to grow sales again. They should have little issue the first couple years but as the platform gets older how do they keep it going with more than just some paint and trim packages.
@scott yupp, the C7 will be interesting to watch. But with its looks, I expect that every kid in America will begin to really want one… again.
One thing the Vette does have going for it with the higher prices is that they have kept it alive. If the Vette was still a $30k $40K car it would be with the RX7, MR2, 280Z and most other lost sports cars.
The Vette is like a luxury where even at lower numbers it can count for higher returns.
I see no logic to cheapen the Corvette or it;s history with a sub model ricer type
The younger crowd already has the Camaro which had lots of models and performance options or Chevy SS.
Always wiser for young guys is a heaver car for safety and you can imagine what car insurance rates are for a young guy wanting to drive a Corvette ?
Anyone want the Corvette crash rate to go way up and then all of us Corvette owners having jacked up rates ?
Corvette even from the GM bean counters is not volume but American pride, quality, performance and lots of free press when grass roots racers shell out the money to race and win.
From experience, in Ontario it is cheaper for me (24yr old) to insure a 2010 GS Corvette ($2100/yr) than a 2006 CTS 3.6L ($2500/year.. but this was 2 years ago when I still had it), 2008 CTS 3.6L, or 2007 Mazda6S ($4000/yr for both the 08 CTS and 6 currently).
I’m still not convinced this talk of a cheaper Corvette is actually going to be cheaper than the base price of the current C6 coupe. For all we know the Stingray’s price could start at $60k and a new submodel would just retain the $50k starting price for the Corvette.
“The younger crowd already has the Camaro which had lots of models and performance options or Chevy SS”
The younger crowd has little disposable income to begin with. A Chevy SS won’t be on their lists at all, considering it’s limited annual production will command a premium they can’t afford. Can’t you even be realistic?
As for the Camaro, the cheapest starts at $24,245 USD and even that doesn’t fix it’s impracale coupe body with limited visability and a crap dash. Conversely, a WRX starts at $25,795 USD and already has a usable backseat, a hatch to carry junk, and less power.
You would think the Camaro would win with it’s better MPG, HP, and price, but when you need to justify using the car as a DD, you’ll have a difficult time rationalizing a coupe over a sedan.
Remeber, if you’re young and have little money to spend, you’re going to want something practcal. And if you want something with a performance edge, you’ll want the practicality to justify using the car everyday; you simply won’t have the money for a second car to be a daily driver.
In either case, both the 1LS and the WRX are not something the majority of the “younger crowd” is looking at anyway; they always go to the used lot.
Profit per model is important and the Vette has that but also to keep a plant open it need to maintain a specific volume.
There are a lot more cards to this game than many consider. If the Vette sold at prices like Ferrari volume is less an issue.
When the Vette team leader says they need to increase Volume I think you should trust he opinion as his job and rep are the ones on the line.
Older vettes were cheaper? I bought my first vette in 1984 for about $25,000. It was my second year working as an engineer and my salary was just below $25,000.
2013 vette starts at about $50,000 and the starting salary for an engineer is about $60,000. So actually the price of the vette is now lower, relative to income, than it was 30 years ago.
The Vette in the past was only a little more than the top Caprice. Today a nicely optioned Stingray will well into the $60K range while a Loaded Impala will be around $20K.
Today many younger people do still buy a Corvette but they are used C5 and C6 models as they can not afford the latest model
Also if they can afford a new one they then can not afford to do what mods they want to do as most younger buyers do. Today many settle for a WRX as it is cheaper and it has a turbo at is easy to mod to pick up more easy power.
A cheaper Vette will not hurt the brand as long as they keep offering the higher level cars. Porsche has done this for years with various cars like the 944 and Boxster and it has only moved many buyers up to the 911 in time.
“Today a nicely optioned Stingray will well into the $60K range while a Loaded Impala will be around $20K.”
Say what? The 2014 Impala starts at $28,000:
http://gmauthority.com/blog/2012/11/chevy-prices-2014-impala-from-27525/
Load it up, and it will reach into the 40s.
“A cheaper Vette will not hurt the brand as long as they keep offering the higher level cars. Porsche has done this for years with various cars like the 944 and Boxster and it has only moved many buyers up to the 911 in time.”
Chevy has the Camaro to move buyers into the Corvette… and other vehicles to move them into the Camaro. Porsche needed to diversify because it relied on a single model — never a good place to be for any automaker, especially when it was by itself (independent of the VW group).
“A cheaper Vette will not hurt the brand as long as they keep offering the higher level cars. Porsche has done this for years with various cars like the 944 and Boxster and it has only moved many buyers up to the 911 in time.”
Yep. Just today, Porsche sales figures are better now then ever….and it wasn’t becasue of the 911.
http://www.carscoops.com/2013/03/2012-best-year-in-porsches-history.html
In 1984 the Caprice MSRP was under $10k. I do not have an option list but I doubt it could get up to $13k.
So a Corvette was twice the cost of a loaded Caprice.
The comments made by Reuss can be interpreted in several ways? One way of looking at it: “When a single new corvette is sold, it makes GM as much money as any of their top models”. OK, no argument there. From the viewpoint of annual sales, the Corvette must be selling way more than 1200 units per month to be considered a sales success? Especially the new one. A huge investment has been made to bring the C7 to market. As Scott mentions above, Tadge Juechter talks about this in an article/interview in Feb/Mar R&T .He says if they can sell about double the recent volume, then they can make a profit, pay back the investment and Corvette can continue……C8 anyone? I expect they will try anything and everything, but will it be enough? Only time will tell.