Morgan Stanley Is Bullish on the Future Prospects of the Chevrolet Corvette

2609

Morgan Stanley Is Bullish on the Future Prospects of the Chevrolet Corvette


We came across this financial report produced by Morgan Stanley on the future of the Corvette and it’s pretty interesting.

Financial firms do these kinds of forward-outlook reports all the time, and in this report, the automotive analysts at Morgan Stanley appear to be very bullish on the future of the Chevrolet Corvette. However, their outlook does require General Motors to expand the Corvette brand into SUVs, crossovers and 100% electric vehicles (BEVs) as Porsche and Lamborghini have done.

I didn’t stay at a Holiday Inn last night, but from their set-up, I believe they have Corvette brand valued at $2 billion and their financial models show it could go to $7bn as the base outlook and as high as $12bn on a bullish outlook.

The report is full of research from the Corvette model information including average sale prices (they configured a 2020 Coupe) and it also includes all sorts of graphs and charts. There are many comparisons to Porsche which show the growth of the Porsche brand as they moved into different models but they do caution that GM has not announced any plans to expand the Corvette brand.

Morgan Stanley Is Bullish on the Future Prospects of the Chevrolet Corvette


General Motors CEO was recently asked about the Corvette expanding its portfolio with the addition of an SUV during GM’s Third Quarter Earnings Call and she deflected the question saying “I appreciate that you think our Corvette franchise is very strong,” before declining to discuss future products.

There is a lot of upsides for General Motors to leverage the Corvette brand into new market segments and we know many Corvette enthusiasts wouldn’t be happy with that move. However, critics of Porsche said the same thing and today the performance brand’s SUVs account for 46% of all Porsches sold.

You can view or download the Morgan Stanley 2020 Corvette Report here. Below is one of the pertinent sections from the report:

Corvette & 2020 Stingray
Why are we talking about Corvette? In our discussions with investors, the topic of Corvette rarely comes up. Moreover we are convinced that investors do not think Corvette is a needle-mover for GM stock. We think investors are ascribing,at best a $2bn valuation to Corvette (our DCF Bear Case),and at worst, 0 value. In essence, we think that the Corvette brand is undervalued and underappreciated by the market. Historically, Corvette has served as a platform for GM to showcase its technology in high performance engine + chassis development. This also lends Corvette to be a platform for showcasing an all-electric vehicle, including an SUV. The commercial strategy filled a uniquely American niche of offering a supercar type driving experience at an affordable price (1/2to 1/4 the price of other nameplates)…while capitalizing on the brand’s heritage and loyalty. We note that GM wouldn’t comment on any future plans around Corvette models and going electric, other than to say they look at a variety of things and recognize the strength of the Corvette brand…


Source:
Morgan Stanley Research via Corvette Forum

Related:
GM’s Mary Barra Deflects Question on Possible Corvette SUV
EV Charging Station Coming to the Corvette Museum as Part of VW’s Electrify America Initiative
[VIDEO] Genovation GXE’s Electric C7 Corvette Hits 210 MPH in Top Speed Run

 

5 COMMENTS

  1. The Corvette, again, is a car, not a brand. GM needs to figure out more ways to lower its price point, as this car desperately needs to move away from the boomer crowd (no offense intended), to the younger crowd. I am convinced this was a huge deciding point for the mid engine layout, technical limitations of the front mounted planform notwithstanding. Being somewhat part of this younger crowd, I would be all about a more stripped down version for the tuner/aftermarket segment. Call her the Super Sport or something to that effect. It’ll sell.

    But an SUV? No way in hell!

  2. Considering the rapidly changing landscape of the automotive industry, I agree with Morgan Stanley’s findings and feel that expanding Corvette from a model into a brand is a concept that’s well worth considering. Based on Barra’s response, I’m guessing it’s under consideration as if it wasn’t, she most likely would have said so.

  3. GM has made a huge mistake, as a corvette lover all my life I believe they’ve messed up the flagship of there fleet.The Corvette being the American Sports Car for over 60 years is no longer is now not the American Sports Car its a European wanna be! Why would a bunch of so called Gm executives sit down and destroy such an Icon?
    I totally understand times are changing and the European Cars are coming on strong and The Ferrari and the Lamborghini are 3 and 4 times the money but to take the front engine Corvette the American Sports Car and flagship of GM and just do away with in my opinion was a huge mistake!
    GM wants to build a mid engine car fine but let’s ease it in the market not cut there legs off and end the front engine just like that? I have seen and heard the same argument from many of my friends and people in the Corvette world say the same thing.
    The word on the street is the C8 is sold out! Not true! The big dealers with hundreds of allocations don’t even have a third of there C8’s sold yet,as a matter of fact the word on the street is one of the top selling corvette dealers had over 400 sold orders and as of last week they’re down to only 321because over 70 customers have cancelled there orders. The C8 looked great in pictures but when it came down to getting in and out of it and the passenger side legroom,the lack of storage space,no trunk and the blind spots guess what? It’s no longer the American Sports Car. The GM strike also hurt the C8 now it’s gonna be 4 months or more before the car hits the road and buyers might just be a little weary of buying a entire new model year Corvette when some employees are happy to be back to work but not happy with their new contract so in return buyers are afraid and might just wait until 2021. GM might have to re-tool and build a front engine Corvette to save their ass on this one.

  4. I have owned many Corvettes and welcome the new C8 Mid Engine platform. I currently have a deposit and a completed order on a convertible, hopefully I will get a 2020. The current specs appear to be as good if not better than any front engine versions from the past. As a retired auto engineer the mid engine platform appears to be ideal for an electric vehicle application and I would guess that this is being considered. The Corvette has consistantly been an exciting, highly styled, preformance vehicle and It would be a mistake to expand this platform to SUV status. Ford’s new E-Mustang does nothing for the Mustang Brand but it does meet the needs of the new generation being a green, internet capable, 5 passenger, preformance, poorly styled 4 door vehicle. I believe that GM’s current vehicle strategy to electrify the large truck & SUV markets is right on the money as these are truly the vehicles that the American markets demand. If the Corvettte brand should happen to die over time please let it die a natural death and not be just another brand that could not compete with other preformance SUV and four door passenger cars.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.