jschindler

Here in Houston car dealers are mostly closed Sundays. I went out for a ride on my motorcycle this morning and stopped by a Chevy dealer. This is a dealer that stocks quite a few Corvettes and keeps most of them right in front of the main entrance, or in the showroom.

I was glad I stopped because they had five or six 2011s - including both the new orange and supersonic blue. After looking at everything they had, here are a handful of random thoughts I had...

Every 2011 they had was a Grand Sport. I think four coupes and one convertible. Every one of them was an automatic and they all had the new F55 option. The coupes listed for around $67k, and the Convertible I think was about $73k.

They had two ZR1s - which I think are both '10s, but one was inside, and the one outside did not have a window sticker.

They had NO Z06's at all. Two years ago they almost always had I'd say six Z06's out there, give or take.

The new colors both looked okay, but the SS blue is a bit boring to me, and the orange is just not a color I could do. But it was a good looking orange. I didn't realize that both colors are extra cost colors. By my accounts, more than half the Corvette colors are extra cost now.

As I rode home I couldn't help think that I may very likely never buy another new Corvette. I'm 57 years old, and like most people today I have no pension plan to retire on. I'll be retiring on my savings - which like most people has taken a major hit the past two years, as has my income (to a lesser degree - but my year end incentive has taken a very significant hit). The thought of writing a check for $30,000 to trade my car and buy a new weekend car just doesn't seem to be in the cards anymore.

It used to be that I could trade up to a newer version of what I already have every couple of years for about $10,000. But they are pushing up pricing to a point where that does not look possible. I realize the base cars have not gone up all that much, but even in this horrible economy GM keeps packaging equipment in a way that makes it hard to move up without paying a bigger premium.

For instance, there is no longer a $1600 Z51 package, you now have to pay $5500 or so for the performance version of the "base" car. Three years ago I downgraded from a convertible to a coupe largely because they packaged the $2,000 power top with the 3LT (or whatever it was called that year) option package. I realize I have not addressed moving up to a new Z06 because: a) I don't think there will be a Z06 after this year, b) there is no reason to buy a new one because the only changes are changes that add a ton of money to the price.

I am pretty good at not blaming a company for not meeting my needs/desires if what they are doing is working for them as a whole. But at 10,000 units a year rate right now, I don't think they can say that what they are doing is working either.

I'm on record as saying that the economy is the main reason for poor sales, and I stand by that comment. But I would think they would be looking for ways to minimize lost sales. Looking at a dealer lot and the least expensive car sitting there is a $67,000 coupe is not what I think the direction they should be going. Before someone corrects me, I should point out that they have two '10 coupes sitting there that list for $59,000. But the cheapest 2011's are the $67k GS's.

Just food for thought, and I'd be interested in everyone's comments on how you think the direction of their current marketing will effect your ability/desire to buy a new Corvette in the future.

BSSN

There is about a 9% mark-up in the '11's I think.

I tire-kicked yesterday myself. Looked at C6's like you did. I don't want a Z06, so I wasn't bummed about that, but you're right. Automatic GS's are insanely prevalent.

GM's interior quality has not changed, but since I looked at C6's back in 2005, their build-quality has gone WAY! up regarding body-panel fit and keeping the trash out of the paint.

For 67K, you were probably looking at 4LT packages.

Vettin08

I would guess that they stocked the hot new combos first (the GS w/ the F55). I'm sure you'll see plenty of standard coupes and verts in the coming months.

jschindler

No, they were not 4LT's.

lsbrodsky

I am not in their market because I do not plan to buy new or used. I love my Vette, have modded it the way I want it, and plan to see how long I can make it last.
I think the challenge for GM is huge. Discretionary purchases are more difficult these days and the Vette has always been one of those. Moreover, the greens would like all cars to be hybrid or electric. I hope GM can develop a strategy to keep the icon at low volume, but I do not see how the high end of their line would allow that. Seems like a basic car with options would be longer lasting.
Larry

beerbarrel

Great post and just the reason I have to buy used...I have two kids in college and another close. New for me is out of the question, but there will always be a vette in the garage.

BSSN

Sounds a bit rediculous. The 2010s I saw on the lot were priced the same as the 2011's (minus of course the incentives and facts that they will come off the '10 price a lot faster). The F55 package is $1600. However, if you deck out a base coupe (LT1) with the Dual-mode, F55, and automatic, that's about $5K right there. So that's $58-59K. Drop the 3LT onto it and you have your mid 60's, plus a few more options like nav. could hit 67 I guess. SO if you want to compare a totally loaded out 'vette from '11 to a stripper '10, I guess prices did go up.

What good is the magnetic ride control? I thought it was for people who wanted the regular 'vette feel at the track but are too prissy to endure a little bump on the street, basically it's like adjustable shocks in concept.

^That is my understanding of it, please explain if I am wrong.

LMB-C6

They have never been 'cheap' but I agree they seem to be getting out of reach for a lot of people. Sure, they may still be a performance bargain, but you can sell a lot more cars at $40K than at $80K. I guess their thinking is they still offer base 1LT cars so it's not like you have to get the GS with all the bells and whistles.

dvilin

Good points.

SilverScorp

When the day comes that I cannot buy a Chevy Corvette, I will stop buying American cars altogether. For me, the Corvette is the only American car I would buy.

Trpblk04

I will never buy a new Vette even though I can afford it. I love my C5 bought an 04, the last. Lots of mods special paint and interior. I guess when you get older other things seem more important.

OregonC6

The problem with the vette customer base is that most are not independently wealthy ( or even high income earners ).

The car has always been targeted at middle class upward mobile buyers , mostly men.

The brand is never going to escape that "market segment identification". Obviously, the decision was made to let MSRP go the way of SUV pricing. Even years ago any buyer knew that the $52,000 sticker on that nifty new SUV meant nothing....

...that the vehicle could be purchased for mid 30s.......

Then why price the cars so high? One reason is the PT Barnum factor. There is a sucker born every minute. I am sure that some people walk in and pay sticker.

Others, many on this forum, use the MSRP as the "starting point" in their consideration of whether the "discounted" price offered by the dealer is a good one or not. This is exactly according to the marketing plan. Consumers are very predictable.

The higher the MSRP the higher the perceived value of the vehicle and the more the "savings" when it is sold for less!

I've never seen it done but a graph of the following would be worth a thousand words:

Years runs along the bottom of the graph....the years could begin with the very first year the car was produced.

The vertical axis is scaled for these variables:

1/ MSRP of the car in current dollars.

2/ Average annual income in the U.S. in current dollars.

3/ Percent MSRP/Average annual income.

Other analysis could be done such as comparing the increase , year to year, of MSRP to the inflation rate or setting a base year, perhaps 1965 and then graphing MSRP against average income in inflation adjusted dollars.

Any such analysis is going to show the same thing: That the increase of MSRP has hugely exceeded both inflation AND growth of income.

The outcome of years of these trends is a car that's grossly overpriced both in terms of MSRP and what they actually sell for. Another factor that might be considered is the decline in quality in such areas as interior materials or static quality in things like the fifty year old brake rotor design etc. These things mean that improvements are slower than price increases.

Da bottom line? How many thousand are sitting on dealer lots?

Tom's_03SVT

Couldn't agree more, I recently purchased a new 2LT GS and frankly if the deals weren't what they were with the forum dealers ( I saved $12K) I would have sat on my new car nest egg a lot longer.

Can Can

My new GS is a 1LT, and I couldn't be happier. For every guy out there who likes fancy interiors, there's a guy like me who likes them plain and simple.

Everyone is right, though- times are tough everywhere, and GM is gonna have to get REAL imaginative if it wants to keep moving Vettes off the lots.

Paul

09maxima

I agree with some points of the OP. When you see Vettes on lots they are often loaded which puts them into BMW M3 land, Audi S4, Lexus IS-F, and all the other luxury sport sedans in the 60's range. However one dealer near me has it right, they have a TON of 1LT cars and 2LT cars and I RARELY see a 3LT or a Z06. They seem to clear their inventory every year because the prices are more manageable. I don't care how much you make, with bills, kids, house, etc a 45k car is expensive...but people can swing it with trade ins and zero interest loans. when you start pushing 50-60-70k, you are in a whole 'nother world of commitment. There are many stable people who can take out an 800 dollar car loan at 0%, but there are more people WILLING to go 550 bucks per month than 800 per month. And let's face it even people with the cash to buy the car won't do it in this economy, they'd rather have a zero interest loan and cash on hand.

LucaBrasiAZ

i dont really fall into any of those categories as mentioned above. Im 38 years old, living on a single income of just over 6 figures. I have a company car that i can roll miles on whenever i wanted. I always was a corvette lover and swore to myself i would own one before i died. When i bought mine it was a newspaper leader ad, exact color and options i wanted ( minus the NPP exhaust). The price was below 40K. I was shopping for a car at the time, not specifically looking for corvettes. My limit was 40K and this fell into my lap. This is the only way i could get into the car, anything more and i would have gone the BMW 3 series route but it worked out. My point is that there are plenty of buyers out there who are just priced out of the car, but not by much. I think its a big mistake not to offer more base cars with fewer options to keep the price down. Once you get somebody in the car they are hooked. I will probably upgrade in a couple of years and get a more expensive version but if this version didnt come along i never would have been part of the family in the first place.

AORoads

Interesting, Jim. My thoughts aren't too dissimilar. Since all these Corvettes are ostensibly "ordered" cars, and not just dropped off by the mfr., one can say it's the dealers who are "ordering" these cars that you see on the floor/lot.

Another thought to add to yours is that, in a down economy, a dealer might be wise to stock that which will sell; not that which will sit and not turnover for a long time. So, people who are barely making it, or making it but truly worried, aren't even necessarily going to buy a base, el strippo, Corvette. Let's say that number is $45K and using your analogy, a lot of money for a weekend car. It's a lot for you at $65K or $75K, but it's a lot for someone worried about their job, the economy or their savings, too, even at $45K.

Long way of saying, the dealers are making a bet imo that they are stocking that which will sell, not the cars that will entice buyers to buy. Because those "enticed" buyers aren't in the market; they only come in the showroom to look, not to buy.

Just my opinion...

cor28vettes

By and large, Corvettes have never been the rich man's toy. The shrinking middle class is less inclined to spend because their household wealth is also shrinking. Yes we've had a recovery but it's in neutral. Loss of wealth due to Wall Street & Housing leaves many of us less inclined to spend.

Even if GM reduced their prices, which I don't think they will, sales would still be lackluster with consumer confidence being so weak. Let's just be satisfied that they're selling 10k instead of zero.

As for so many GS's... That's what GM and dealers see as the hot ticket item, or their salvation should I say. The Forum may have influenced the GS to a large degree. Or it could be the usual 'end of a generation' marketing strategy.

A large sticker leaves room for expected incentives i.e. zero financing. The bottom line is on the bottom line. GM is quite aware of the market conditions and strategy. And I think they have an ear out for this Forum and your thread.

I am fortunate to now afford a brand new ZR1 cash out the door but it's not even under consideration. Buyers should make purchases based on their individual circumstance, not based on mine.

jschindler

Wow, this thread has already gotten the kind of responses I had hoped for! Some agree, and some offer "counter point" - which I think is good.

One of the reasons I brought all of this up is because I'm trying to see how much of my thinking is just that - my thinking. I realize my situation may be different from many other potential buyers.

Up until a few years ago, I financed my Corvettes (and some of the previous toys I owned). It was never a big deal to trade a 500/month payment for a 550/month payment and have a new car.

But as I am nearer (hopefully) to retirement, I've paid cash for all of my toys, and am close to paying off even my house. I'm now a cash buyer because I want to be totally debt free as I get closer to retirement. I think there is a correlation to age here - but then again, I think that a lot of Corvette buyers are in a similar situation - age wise and savings wise, as I am.

Thanks for great feedback already!!!

FastC6Mike

I use to think this way up until this past week when I lost my brother-in-law at age 51.

Unless it will hurt someone, i.e., they put themselves in harm's way financially, I would say enjoy life and buy the Vette.