Chevy’s Corvette may be a little fish in a big pond, as far as the total financial picture at General Motors goes.
But when it comes to the total economic impact created by ancillary industries, America’s Sports Car is making quite a big ripple in that pond, thank you, according to a story by Edmunds.com.
In fact, even with sales of just 14,132 Corvettes during 2012 because of the economic downturn and the impending release of the C7, Edmunds estimates that Corvette’s total economic activity could well be more than $2.5 billion.
What makes the Corvette such an economic powerhouse is the reputation it has earned and the love it has created among its enthusiasts during the past 60 years.
That loyalty means that most of the nearly 1.4 million Corvettes that have been produced since 1953 are still around. Unlike most cars, Corvettes never die – they’re just brought back to life again and again with restorations by crop after crop of excited owners. You might even call it the Automotive Circle of Life if you’re a Lion King fan.
“You go to any city or any car show and there will be restored Corvettes there,” says Mike Yager, who has been along for the ride since 1974 when he borrowed $500 to start a Corvette-related business that’s grown into a multi-million-dollar business, Mid America Motorworks. “I was in a Corvette club so I knew there were places that sold a few Corvette things. But there was no place that sold a lot of Corvette stuff.”
That’s definitely not true these days, and with the release of the seventh-generation Corvette Stingray this fall, enthusiasm about the car – and its economic impact – could very well hit record levels.
“Corvette licensing is growing, and there is a tremendous amount of excitement and anticipation from licensees for the new C7 Corvette Stingray,” GM’s licensing team told Edmunds.com. “A range of high-quality licensed merchandise is being developed for release in 2013. Since the introduction of the C7 at NAIAS, there has been a high demand for Stingray pins.”
As Edmunds.com points out, folks who buy Corvettes love them! That means they’ll go above and beyond to take care of them, frequently using only the best waxes and cleaning products and installing after-market items like exhaust systems and custom wheels. If the car somehow manages to wear out, there’s always a new owner in the wings waiting to bring it back to life with a complete restoration.
Yager knows firsthand about that love folks have for their Corvettes.
“How many Corvettes are out there in garages being restored?” he asks rhetorically. “Ten thousand? 20,000? 30,000? We’ve barely even touched that market. A car that had a new carpet set put in it 10 years ago needs a new carpet set now. It’s endless. You look at a ’67 Corvette that’s done to a Bloomington Gold or NCRS standard. It doesn’t take a lot of $100 grand restorations and you’re at a million dollars.”
Yager’s company alone has about 100 employees and sales of $40 to $50 million each year.
Throw in the businesses that actually restore the Corvettes, and the economic impact continues to grow. Businesses like Kevin Mackay’s Corvette Repair Inc., who has built a sterling reputation over the past 28 years restoring some of the most famous Corvettes in history, including the 1960 Briggs Cunningham Le Mans Racer, 1962 Yenko Gulf Oil Racer, 1966 Penske Racer and 1969 Rebel Racer (all four cars were either Le Mans, Daytona or Sebring class winners), Cerv II, Pininfarina Car, XP-819 Car (all three are one-off experimental cars).
“Most of my clients aren’t kids,” says Mackay, who started his business in 1985 in a one-bay garage out of an auto repair shop in Valley Stream, N.Y. “Most of my clients are in their mid- to late-40s or older. These are guys in their 50s and 60s who want to remember their college days. They’re buying these cars instead of real estate. We’ve always been very busy, and business is not trailing off. People ask me, ‘How can you have a business doing Corvettes only?’ And I tell them that it’s all I know.”
Product licenses from GM generate an estimated $656 million each year, and shows and various Corvette-related events across the country generate another $100 million. Salvage yards and component manufacturers do another $50 million in business each, and racing teams add an estimated $15 million in financial impact.
Keep in mind that if the C7 Corvette is the hit that it appears it’s going to be, based on early reaction from the public, and sells 35,000 2014 models, that would add up to more than $2 billion just in new-car sales alone.
That little fish sure does make big ripples, doesn’t it?
Click below for a chart that breaks down a rough estimate on how Edmunds.com thinks the Corvette economy shakes out.
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