MotorTrend Claims Chevrolet Will Lose Money on Every Sub-$80K C8 Corvette Stingray Sold

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MotorTrend Claims Chevrolet Will Lose Money on Every Sub-$80K C8 Corvette Stingray Sold


If you can believe a story posted last week by MotorTrend, the mid-engine Corvette’s starting price below $60,000 really is too good to be true.

MotorTrend has previously reported that the C8 Corvette will see a price increase for the 2021 model year. Now the magazine says a senior GM source tells them that increase would have to be around $20,000 to cover the actual cost of the car, a hike we know won’t be happening to keep customers from revolting. Is this all a ploy to make customers accept a price hike of, say, $2,000 in 2021 and think we’re lucky it’s not a whole lot more? Could this leak just be a marketing strategy?

This senior source claims that GM’s original budget for the mid-engine Corvette assumed a starting price of $79,995, but we find it hard to believe the company ever seriously considered raising the base price of the Corvette that much. While it’s definitely nice to have the better performance of the mid-engine car, GM had to know all along that customers wouldn’t fork out that much extra cash so it’s likely they’ve done the numbers and know for sure the C8 can still be a big money-maker for the company even with a base price less than $60K. After all, they wouldn’t be in business for long if they intentionally set out to lose money on a car.

MotorTrend‘s source claims that GM needs to sell enough options to raise the MSRP to around $80,000 before it starts making a profit. If you’ve played around with the Build & Price tools online, you know that it’s easy to add enough goodies to rapidly reach that level. Fortunately, our own build topped out around $72,000 – minus the Z51 package, of course, but including options like the 2LT package, high-wing spoiler, front lift, and performance exhaust.

We’re sure most of the early adopters will not be as frugal and will easily see their final totals hit the $80,000 and maybe even $90,000 mark. After all, raising the price from $60,000 to $80,000 doesn’t really add that much to the monthly payment in the grand scheme of things if you have to finance.

In the end, GM is likely to make as much or more money on the C8 as it did on the C7, which is reputed to have made the company about $2 billion during its six-year run, or a neat $10,000 profit per car.

It’s not likely the bean-counters at GM would have ever given the mid-engine car the green light, if they didn’t think it would be a big money-maker overall.

And, while the rumors about the upcoming Z06 and ZR1 sound mighty impressive with their increased performance, MotorTrend‘s source warns that GM will have to be careful not to charge too much for those super models as sales tend to drop off tremendously once the price passes $100,000.

Says MotorTrend: “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.”

Allow us to play devil’s advocate for a minute. The whole idea that the mid-engine car HAS to cost significantly more than the front-engine car has always left us a little skeptical. While the engineering costs are reputed to have been more for the mid-engine car, we still wonder why. GM would be paying the same folks for their engineering efforts no matter if the engine is in the front or the middle, and the materials are likely to cost much the same for a mid-engine frame and fenders as they do for the front-engine.

Why does it necessarily have to be significantly more expensive just because the engine changed places? If that was the case, why didn’t a Fiero cost $50,000 back in the day? And one more thing, if GM expected to lose money on the base C8, why did it invest hundreds of millions of dollars in new equipment and buildings at Bowling Green? Just saying…


Source:
MotorTrend

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12 COMMENTS

  1. Who cares? If the C8 is underpriced, as long as GM is happy with sales, so be it. If they didn’t think the car would sell at whatever price, they would not offer it at said price point.

    Once again, we see yet another example of Motor Trend’s commitment to speculation-based irresponsible journalism. Each article like this denegrates their reputation even more.

    They need not worry. I’ve cancelled my subscription that I have maintained for the last ten years, and let their Editor in Chief know precisely why.

    #Done

  2. Yes they may be losing money due to the strike that has increased wages, but I do not think it is near the $20K that Motor Trend has stated!

  3. C’mon, GM will not sell a product that loses money intentionally, just to “make a statement”. Anyone with half a brain knows that. Of course they would like to make more money, but they have to be able to sell that product, too.

  4. Not a good idea I would think. One of the big selling points is “bang for the buck”.

  5. As a stand alone product the new Corvette with all the development costs might be at $80K, but GM is a big corporation that spreads the costs among other products. I know my configurations for the C8 I’m gonna get is well over $90K, so I help GM continue making more Corvettes!

  6. The Loss Leader strategy is smart right now. Attract new buyers, generate great press / attention, sell more profitable options and accessories. Once the car garners a great reputation, which it will, you inch up the price. Plus it will bring people into Chevy dealerships that wouldn’t normally go. I have seen several you-tubers discuss cancelling their Supra or GT500 orders for the C8.

  7. And these are the same people that made the little horse power boo boo a while back. You can be sure that GM is making money on all Corvettes they sell and the 2021 will NOT be 20K more than the 2020. Don’t believe anything MT says.

  8. It was running through my mind when placing my order that some of the minor options we use to get with the cost of the car like Seat Belts @ $999.99 for the color of your choice, or center caps for your choice of wheels are in the $500.00 neighborhood. There are many other options like I mentioned, think about how fast the cost of your build climbs when choosing some of these options.

    There are many options that appear minor but add up quick, makes sense after reading this article. I am curious though, anyone think the Pre-orders that are over $80K will roll off the line sooner than expected? Just thinking out loud…

  9. I have owned 19 Corvettes in my lifetime. I have waited for the C8 to come to life and now it has. I currently own a black C7 that I love however the Mid-engine car has got my attention. I can’t wait to see it in person and decide on the color I want to buy. Thanks GM for designing and producing such a great American Icon. Mike

  10. I am SO not bothered by this “news”.
    It’s normal business practice, and has been for decades by many other manufactures from cars to widgets.

  11. GM will do just fine with the C8, very doubtful that buyers will not want some of the extra cost options to make their cars special and unique. Most will roll off the line from $75-$90k, and I am sure the general and the dealerships will be very happy with their profits! This car is a bargain under $100K!

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