Why the 2014 Corvette Stingray Isn't Good Enoughhttp://www.fool.com/investing/general/2013/10/06/why-the-2014-corvette-stingray-isnt-good-enough.aspx John Rosevear
October 6, 2013
The reviews have been very positive: In terms of the overall driving experience, the 2014 Chevrolet Corvette is a definite improvement over its mostly well-regarded predecessor.
It's lighter. The frame is stiffer, something that matters a lot with a sports car. The interior is well finished, something that couldn't be said of the outgoing model. The revised V8 engine is both more powerful and more fuel-efficient.
Today's iteration of America's Sports Car is a high-tech wonder -- one that General Motors (NYSE: GM) still manages to offer at a price much lower than rivals'.
But the Corvette still has a big problem -- one that GM, for all of the new Corvette's prowess in road tests, may not have solved.
The Corvette isn't a young guy's car
Actually, that's not the best way to describe the problem. The real problem is that GM hasn't been able to attract younger buyers to the Corvette, despite years of trying.
According to figures from market-research firm Strategic Vision, the median age of a Corvette buyer is now 61 years old. That's up from 54 years old a decade ago.
It's the same crowd, in other words. The same folks who were buying Vettes a decade ago are the ones buying them now. They're getting older, and soon they'll be hitting the point in life where a low-slung, hard-riding sports car doesn't make sense.
That doesn't bode well for the Corvette's future. Or really, for its present.
And it means that no matter how well it performs on the track, the new Vette may fall short of its rivals where it matters most -- in sales and profits.
Why don't younger folks crave Corvettes?
We know that today's young adults -- the so-called "millennials" -- aren't engaged by cars in the way that their predecessors were. There are a lot of theories that try to explain why, but the facts are the facts: Among twentysomethings, interest in (and sales of) new cars are down.
But there's still plenty of demand for sports cars, among younger folks and somewhat older folks as well. Porsche's best-seller these days is the Cayenne SUV, but the German firm is still selling plenty of Boxsters and Caymans and 911s -- most at prices quite a bit steeper than the Corvette's.
The company's demographics are a lot better than the Corvette's: Plenty of Porsche buyers are in their 40s. And Porsche is finding success in China, where a surge of youngish professionals are driving a boom in luxury-brand purchases. The Porsche brand is a global status symbol, and the cars' appeal crosses generations.
Like Porsches, the latest Corvette shines in performance tests. But it doesn't have the same kind of cross-generational appeal. And it's certainly not a global status symbol.
At least not yet. And that's where I'd argue that GM hasn't succeeded with the new car.
The Vette's formula isn't getting the job done
GM didn't rethink the Corvette formula this time around. The last model, the sixth-generation Corvette, had styling inspired by Stealth fighter planes -- as did its predecessor. The new car plays more riffs on that theme, with some added elements that might have been inspired by video games.
The classic curves that made the 1960s Corvettes into style icons weren't part of the brief. The new Vette is a flashy car, not an elegant one -- just like the last Vette.
The new Vette's styling is dramatic, but I think it's going to look dated pretty quickly. And I think it's safe to say that it's not a look that will appeal to the sweet spot of today's luxury-car demographic.
How do I know that? Simple: Look at the cars that do: Tesla's Model S, the latest Maseratis, BMW's coupes, and so forth. For that matter, look at the classic -- timeless -- cool of recent Aston Martins. The Vette is a very different animal. And I think that difference is going to limit its audience, and its sales.)
Also contrast the new Vette with the approach that Ford (NYSE: F) took with its last Mustang: a "retro" look that still managed to appeal to younger buyers. Like the Vette, the Mustang is an old-school formula executed with some modern technology. But unlike the Vette, the current Mustang managed to find a broad demographic appeal.
I argue that the Mustang's success has had a lot do with its classic, gimmick-free styling.
GM went for flashy over cool, for striking over classic, with the new Vette. That's a subjective call, and it was surely a carefully calculated decision by GM. GM says it wants to attract younger folks to the Vette,