GM Defies Shrinking Sports-Car Market With Sub-$60,000 Corvette
The original American sports car is going European to take on rivals across the pond and woo young and old enthusiasts at home.
(Bloomberg) -- General Motors Co. is bucking convention by boosting production of its new Corvette even as the sports-car market shrinks.
Demand for hot rods has shrunk to 2.3% of the U.S. vehicle market, about half what it was a decade ago, according to Edmunds. And GM’s new car, with a starting price of under $60,000, won’t be much cheaper than the existing Corvette. Despite that, GM is adding 400 employees and a second shift at its plant making the model in Bowling Green, Kentucky.
GM’s strategy is to appeal to both younger buyers and older sports car buffs alike with a radical makeover of its 1950s icon to compete with exclusive European high-performance models at a fraction of the price. By transplanting the engine to the middle of the car, GM says the new Corvette will handle better on the track and take on Porsche, Ferrari and Lamborghini. But at a quarter of the price of those supercars, GM sees an opportunity to grow sales of a niche vehicle with attractive profit margins.
“It’s very significant for us financially,” GM Chief Executive Officer Mary Barra said at the reveal. “It has been -- and this car will be.”
GM hopes to find a new generation of buyers with its entry-level Stingray and lure wealthier sports-car collectors who currently drive European models. The risk is that older, core buyers may be turned off by tweaks such as GM’s decision to replace the Corvette’s traditional manual transmission, favored by purists, with a high-tech dual-clutch transmission.
While few other vehicles sold today offer a manual transmission in the U.S. market, 15% of Corvette buyers opt for one -- a decent chunk of the buyer base.
“One thing we’re worried about is no manual transmission,” Jon Thorn, the editor of the Corvette Club of America’s newsletter, said before seeing the new car.
Paddle Shifters
In its place, the Stingray will have an 8-speed automatic transmission with paddle shifters. That’s become the active transmission of choice among high-end European sports cars.
The new Corvette allows drivers to use the paddles and choose a specific gear, rather than just go up or down one at a time. So it operates like a manual, just without a clutch pedal and a stick shift between the seats. With the mid-engine car, a true manual was more difficult to install, and suppliers are loath to make them because volumes are low. The electronically controlled dual clutch also changes better, said Tadge Juechter, the Corvette’s chief engineer.
“The transmission shifts smoother and faster than any human being can,” Juechter said.
The latest incarnation also packs more punch. The Stingray gets a horsepower boost to 495 from 460. And with the Z51 performance package, the car will hit 60 miles per hour in less than 3 seconds.
That’s the fastest-ever Corvette and about as quick off the line as a Lamborghini Huracan, which sells for around $240,000.
“It’s the Corvette version of a supercar that we always wanted to see,” GM President Mark Reuss said. The exact price hasn’t been disclosed, but Reuss said the Stingray model will start at less than $60,000 in the U.S.
The biggest improvement for sports-car nerds is the mid-engine layout. With the motor planted behind the driver, who sits almost on top of the front axle, the car should have much better balance. GM needed to do that to improve the ride, Reuss said.
Corvette also is taking a page out of Tesla Inc.’s playbook with over-the-air updates, though GM hasn’t specified what improvements it will be able to make to the car remotely.
The car also has a display in the dash that can be reconfigured to show gauges and driver information in a different order. It’s another nice touch for a generation that grew up using smartphones and playing video games.
Walking a Tightrope
Still, removing the stick shows the tightrope Chevy is walking as it tries to bridge a generation and keep older purists happy while attracting the young.
Rumors had been circulating for months before confirmation that the gear stick was history.
“If they don’t have a manual, it’s malpractice,” said Eric Noble, president of The CarLab, a consulting firm in Orange, California. “That’s still a lot of buyers that they could potentially lose.”
--With assistance from Kyle Lahucik.
To contact the reporter on this story: David Welch in Southfield at dwelch12@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, ;Young-Sam Cho at ycho2@bloomberg.net, Chester Dawson
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