Last fall, the highly anticipated 2014 Corvette Stingray arrived on the market to great fanfare. Before sales started, it was already clear that the new Corvette was going to be a big deal for General Motors (NYSE:GM). Reviewers liked how the car looked and performed, and it represented a huge improvement over the eight-year-old, outgoing model.
This is particularly important because the Corvette has historically served as a "halo car" for GM's mass-market Chevrolet brand. Indeed, not only have Corvette sales surged this year, but the buzz surrounding the new model may also be helping boost sales of other Chevy vehicles.
The 2014 Corvette Stingray keeps selling
Through the first nine months of 2013, GM dealers sold fewer than 8,000 Corvettes. Considering that the outgoing Corvette model had been on the market with relatively minimal changes since 2005, the dismal sales trend was understandable.
As soon as the 2014 Corvette Stingray became available, sales took off. Dealers sold 3,929 Corvettes in October 2013, the first month that the new model was widely available, and by the end of the year dealers had sold 17,291 Corvettes. That was the model's best sales performance since 2008.
Demand has remained steady throughout 2014 despite a $2,000 price increase for the base model and a $1,200 jump for the Z51 performance package. By the end of June, U.S. sales of the 2014 Corvette Stingray had reached 17,744 units, eclipsing the 2013 total in half a year!
Last month, Corvette had its best July since 2004, according to GM. Dealers delivered 3,060 Corvettes in the U.S., bringing the year-to-date mark to 20,804. Based on the recent pace, 2014 Corvette sales could challenge the best annual sales performance for the previous model (36,518 sold in 2006).
Still a halo car?
For six decades, the Corvette has served as a halo car for the Chevy brand. Having a cool-looking sports car in a Chevy showroom attracts foot traffic from people who want to get a better look, even if they can't afford to buy it. This gives salespeople an opportunity to pitch more affordable cars in the Chevy lineup to potential customers.
Not surprisingly, it's hard to quantify the impact of a halo car. There are a lot of reasons why somebody might choose to buy a particular vehicle on any given day. Parsing out exactly how many people were drawn into Chevy dealerships by the 2014 Corvette Stingray and then chose to buy a Chevy that they wouldn't have otherwise purchased is impossible.
That said, Chevy sales have been surprisingly strong this year. General Motors has recalled a staggering 26 million vehicles in the U.S. during 2014 for a raft of problems -- many related to a long-running ignition switch issue -- and considering all of the bad press this generated, it would not have been surprising to see Chevy sales slide. However, aside from January and February when industry sales declined due to severe weather across much of the country, Chevy sales have held up extremely well.
Through the first two months of 2014, Chevrolet sales declined 7.7%, from 295,845 to 273,002. However, in the following five months, sales rose more than 5% year over year. That's a solid performance considering that industry sales volume is also expected to grow roughly 5% this year compared to last year's total of 15.6 million.
The arrival of the 2014 Corvette Stingray in dealer showrooms late last year is definitely one positive factor helping GM to overcome its image problems. To be clear, most of the credit has to go to GM's new models. Ultimately, a halo car won't do much to help sell poorly designed cars. However, strong interest in the newest Corvette may be helping burnish GM's image in the face of its recall woes.
Foolish final thoughts
Almost a year after its launch, sales of the 2014 Corvette Stingray have more than lived up to expectations. With a strong finish to the year, it's possible that Corvette sales will hit a multi-decade high in 2014.
Strong sales numbers for the new Corvette are a great thing for GM, because the Corvette is one of the company's most profitable vehicles. Just as importantly, widespread interest in the 2014 Corvette Stingray is allowing it to play the role of "halo car" to perfection. It stands as a highly visible monument to GM's comeback, helping to drive dealer foot traffic and deflect consumer worries about the General's recall issues.