Is it the hottest new car on the planet?
Chevrolet's all-new 2014 Corvette Stingray might well be. Interest in the latest edition of America's best-known sports car has been absolutely huge, say dealers. Corvette sales were up a whopping 129% last month.
Of course, demand is relative. With just 2,527 sold last month, the Corvette's sales were barely a drop in General Motors' (NYSE: GM) global sales bucket.
But the new 2014 Corvette Stingray is important to GM for a lot of reasons that go beyond sales totals.
Why a "halo car" makes good business sense
The Corvette is a "halo car," industry-speak for a model that doesn't necessarily sell in big numbers, but -- just by its existence -- boosts the overall image of the brand.
Halo cars are important for more than just vague brand-building reasons. Curious enthusiasts will visit a Chevrolet dealer just to see a hot car like the new Stingray. They might not really be interested in buying, but while they're there, they -- and maybe their spouses -- will look around. Some will like what they see, and while they won't leave with a new Corvette, they might leave with a Malibu or Tahoe instead.
GM's dealers love that. And that means GM loves it, too.
And the dealers also love that -- at least when it's brand new -- they can sell cars like the new Stingray without any discounts at all. Sometimes, they even get more than the sticker price.
Don't expect to pay sticker price, and don't expect a discount, either
I talked to Edmunds analyst Jessica Caldwell about the new Corvette Stingray. Caldwell follows U.S. auto sales very closely, and she said the car is doing something that she rarely sees in her averages: it's selling over sticker.
She says that the average transaction price for a 2014 Stingray in October and November was about $66,500, while the average sticker price was a few hundred dollars less. In other words, buyers were paying more than the official asking price.
Her numbers are averages, of course. Probably, some dealers were able to get buyers to pay premiums, maybe for the first new Stingrays in their areas. But few, if any, were offering any sort of discounts on the prices on the windows.
That's not uncommon with halo models, Caldwell said, but only when they're new. Hot new models like the Corvette, and the new Ford (NYSE: F) Mustang coming next year, can command premiums when they're first released, especially in high-performance trim.
But later, it's a different story. Once a halo car is no longer the flavor of the month, those average transaction prices go way down, Caldwell said. And and the "days to turn," the amount of time that cars spend on dealer lots before they're sold, goes way, way up. That's when you can get a great deal on a new sports car.
Caldwell showed me a chart that makes this point in dramatic style. In September, the "days to turn" for the Corvette was 199 days. If you had walked into a Chevy dealer then, you could have gone home with a Corvette at a very big discount. But In October, when the new model arrived at dealers, that number fell to just six days.
Discount? Forget it, we've got people lining up to buy this car!
How GM will try to keep the Corvette fresh and exciting
For GM, that means the company needs to get the most it can out of the new Stingray while it's still hot. It also means that the company needs to find ways to keep its latest Corvette hot for as long as possible.
One way to do that is to release additional versions or special editions. Ford has mastered that with its Mustang, which over the last several years has been offered in a huge variety of packages and trims and higher-performance variants.
That process has already started with the Corvette. GM has already released a "Premiere Edition" of the 2014 Corvette Stingray, with special paint and trim aimed at making it a collector's item. And this past week, GM said it would unveil a big brother for the Stingray at next month's North American International Auto Show in Detroit.
That "big brother" is the 2015 Corvette Z06. It'll have higher performance -- and, no doubt, higher prices -- than the Stingray. GM promises that the Z06 will deliver "supercar levels of performance" and will be "the most track-capable Corvette ever."
But we'll have to wait until next month for the details. And that, folks, is how they keep us interested.
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