By on July 17, 2014
2015 Corvette Z06. Full gallery here

2015 Corvette Z06. Full gallery here

The Chevrolet Corvette may be outselling all of Porsche’s sports car models combined, but GM will still sell fewer Corvettes this year than the number of Chevy Cruzes they are likely to sell this month. You might think that one of General Motors’ lowest volume cars could not contribute much to the company’s bottom line, but the success of the 7th generation Corvette will mean hundreds of millions of dollars more in profit this year for the automaker.

When the latest Corvette was introduced in early 2013, annual sales had been in the 12,000 to 14,000 unit range since 2009, about a 2/3 drop from sales a decade earlier. I can remember when there were rumors in the 1990s that GM might kill the Corvette because sales had dropped to about 25,000 cars a year so it was somewhat surprising that the ‘Vette survived GM’s bankruptcy with sales at half that level.

At the C7′s introduction in January of 2013, I was talking to Harlan Charles, Corvette majordomo (actually his official title is product and marketing manager for the car) and he surprised me when he said that the program was profitable at the then current build rates. When I expressed skepticism and mentioned the rumored demise of the ‘Vette in the ’90s, Charles said that it wasn’t the 1990s anymore, that efficiencies had been implemented and that the Bowling Green Corvette assembly plant made money making a fraction of the cars it used to make. In 2012, Chevy sold about 14,400 C6 Corvettes in North America. The C7 edition has been well received and Chevy has sold more than twice that number in just the first half of 2014, 18,500. Unless something completely unexpected happens, the Corvette should easily surpass 30,000 sales this year and possibly exceed 35,000.

Mark Reuss, who is GM’s president for North America, has publicly stated that the ‘Vette “makes as much money as any of the top-profit models in our company.” Those pickups can represent five figures of profit on vehicles with higher transaction prices. Adam Levine Weinberg at The Motley Fool website takes Reuss’ comments to mean that gross profit per vehicle (not including development costs) on the C7 Corvette could be $10,000 or more. That means that the 20,000 or so additional Corvettes that GM will sell this year compared to last year works out to an additional $200 million in gross profit.

Now for a company that booked a net profit of $3.8 billion dollars last year, $200 million isn’t a huge amount of money, but it’s  far from chump change. With Chrysler just introducing the 707 horsepower Hellcat edition of the Dodge Challenger, there will be pressure on the Corvette team to respond with a higher performance model than the 650 hp Z06 version of the ‘Vette. While that $200 million may be a fraction of GM’s total profits, it will certainly make it easier for Mr. Charles and his team to convince Marry Barra and her team to greenlight a ZR1 Corvette with even more power than the Hellcat.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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21 Comments on “Strong C7 Corvette Sales Mean More Profits for GM...”


  • avatar

    The C7 is a beautiful car, but for practical purposes, my only GM choice would be a CTS-V Coupe.

    However…

    …HELLCAT is only $60,000 and a CTS-V Coupe starts considerably higher.

  • avatar
    bd2

    And the now mid-sized CTS probably brings in more profit than its smaller entry-level priced predecessor despite the 2G selling more.

    Cadillac has the potential to bring in the bulk of GM’s profits, such as Audi does for VAG, but they need to expand their CUV lineup ASAP and push up the next gen ATS (needs more rear passenger room).

    • 0 avatar
      FractureCritical

      Cadillac, perception wise, is still the brand of the elderly and middle aged mobster wanna-be’s. I agree the product is good, but you’re not gonna find a lot of people cross shopping the German brands with Cadillacs. you can see it on the street, you could see it at NYIAS, you can see it in the sales. They have a lot of branding work to do.

  • avatar

    With such a competitive car why don’t they tackle the Europeans on their home markets?

  • avatar
    el scotto

    This what I understand and perceive: the Z06 was built to take on Ferraris and Porches and other supercars. The Hellcat is being built to take on other pony cars. Depends on whether you get your white t-shirts in a 3 pack, Carhartt, a designer label on the pocket, or silk; from Milan of course. Moar Powerrr! is a very good thing. Here’s one to poner: Does Corvette have enough cache that GM could sell the Bowling Green, KY plant and all the intellctual property to some investors?

  • avatar

    “….but the success of the 7th generation Corvette will mean hundreds of millions of dollars more in profit this year for the automaker.”

    Is this before or after they recall the Corvette?

  • avatar
    DenverMike

    If the Corvette was anywhere near profitable, there wouldn’t be any reason to bring up the subject ever. When do we ever hear whether Malibus are profitable? OK, exactly how profitable is the Corvette? We know for a fact, the Silverado/Sierra are exactly the 2nd most profit cars in the world for some unknown reason.

  • avatar
    VenomV12

    I know people like to make a big deal about it, but in reality Corvette sales are no different than when a new model is introduced and also when the economy is doing well. Once the car gets older the sales will decline also and GM will be discounting them like mad to get them out the door. Considering how many improvement they had to do over the previous one but still keep the price relatively the same, I wonder how profitable this car really is now?

    Also, GM wanted to get younger buyers for the Corvette but as far as I have seen the buyers have remained the same, old men. Even my mother was driving with me the other day, saw the new Corvette and said it looked nice and immediately followed that with the comment about it always only seems to be old men buying them. When a woman that generally cares nothing about cars even notices that, there is a problem. Even a couple of girls that are friends of mine that are in their mid 20s were walking one day and saw a Corvette and immediately said a derogatory comment about them being cars for old men.

    That is going to be one hard stereotype for GM and Corvette to shake.

    • 0 avatar
      bts

      I think they’ve been working at this by featuring it movies lately with Captain America and Transformers. On another note they seem to have shaken the mullet-mobile image from the Camaro rather nicely, so given some time I don’t think they’ll have an image problem with the Corvette. Anyway, how young do you think the buyers for a specialty two seat sports car can actually get?

      • 0 avatar
        VenomV12

        Since a Tahoe or Suburban, BMW M3 etc etc are bought by many people in the 30s and 40s I don’t see why a Corvette which is in the same price range can’t be bought by those same people? I rarely see an M3 driven by someone over 45, I rarely see a Corvette driven by someone under 55. There are definitely lots of potential buyers that Corvette is missing out on.

        I don’t think they have shaken the mullet image for the Camaro at all. I see generally the same people driving Camaros and Mustangs and people generally still regard them the same. It’s a little better now than it was before, but definitely not even close to being erased. If any vehicle out there has really been successful at penetrating the market for buyers of foreign cars I would say it is the new Grand Cherokee.

    • 0 avatar
      formula m

      In Ontario, as a late 20′s to early 30′s male driver the insurance would be in the $3500-$5000+ per year for a vette. Ridiculous and just wait for the speeding tickets to come! Thus CUV’s are taking over because they look alright for being a 4dr. People can’t afford to waste money to insure a 2 door car. Even a BRZ would have stupid insurance rates and its less powerful than a ford escape.

  • avatar
    Russycle

    “In 2012, Chevy sold about 14,400 C6 Corvettes in North America. The C7 edition has been well received and Chevy has sold more than twice that number in just the first half of 2014, 18,500.”

    I see where you’re going there, but 18500 isn’t more than twice 14400.

  • avatar
    RRocket

    Excellent!! This will coming in handy for GM when they start paying off their ignition switch lawsuits…

  • avatar
    Fred

    Nice to see that the limited production Vette makes money. Wish they could figure out how to do the same for more affordable limited production models.

    • 0 avatar
      bd2

      Um, you do know that GM had an operating profit of $7.5 Billion for North America last year?

      And taking out overseas losses, restructuring costs, etc. – still made $3.8B in profit.

      Audi makes the bulk of profits for VAG – so once GM gets Cadillac and Buick totally in order, profits should rise at GM.

      Also, GM is the one domestic to build a SUB-compact in the US (the Sonic) and they do it profitably.

  • avatar
    TMA1

    That gray and black car looks fantastic. The Z06 seems like overkill though. I priced out the Vette I want, and it comes in at just under $59,000. Now if only I had someplace to keep it…


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