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.
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…
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