[Mgorski]

The theory is related to constraints. The constrained items I'm referring to are obviously the z51 package, the visible carbon fiber roof, the carbon flash mirrors/spoiler, the carbon fiber dash, and more recently the body color roof which is also made of carbon fiber. Now to my theory, would we all agree that these items and their materials are expensive? And being expensive General Motors wouldn't want every stingray or even the majority made with these options because it would cut in to profits. So the theory is that too many people ordered z51's and carbon fiber, and not enough cheaper or "base" materials were being used, so GM had too many extra base parts and needed to sell more of them before they sold premium materials, and that's where we get "constraints" or what I might call controlled product selection. Your dealer tells you that material is unavailable so that you might not want to wait and order the base materials, or you wait, which would also lead to the same result; somebody else buys the base. Basically I don't think its a lack of parts for z51 or carbon fiber, but rather an over abundance of base materials that need to be sold. - maybe some kind of ratio: for every 10 base stingrays they can make 1 z51. It would make sense from a business stand point. Thoughts? Or was this already more or less obvious?

 

[sckennedy52]

I don't know that I agree that the premium options cut into profits; I would think it would be just the opposite - the options have much higher markup and associated profit. The base materials will be consumed in base models, albeit that it might provide for overstock in the short term, but nevertheless, they'll be consumed.

I would think the reason for the constraints is that GM grossly underestimated the take rate on the options, and/or the suppliers are unable to produce to meet unforeseen demand. In the case of the Z51, there's so many associated components that the lack of tires, wheels, ceramic brakes (wasn't that an issue with the ZR1 rollout?) or combinations thereof could cause a constraint; or there's been a quality problem with certain components like the eLSD.


I found it interesting that almost every picture in the newly release brochure is a vehicle with the Z51 option, that can't be produced to meet the demand. How could they not have anticipated this outcome? Very unfortunate, and frustrating to this Z51 and FAY convertible orderer who can't get a car built.

 

[Frankie]

When something is not available the more press it gets, the more people talk about it, the more people want it.
GM wants as many z51's sold as possible. I think it's a marketing ploy.
Think about it
When something or someone is hard to get we always want it more.
I would b willing to bet They have the parts. They are simply not releasing them.
The roof thing is crazy!
They know they have something special and they are milkin it.




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[Mgorski]

I don't know that I agree that the premium options cut into profits; I would think it would be just the opposite - the options have much higher markup and associated profit. The base materials will be consumed in base models, albeit that it might provide for overstock in the short term, but nevertheless, they'll be consumed.

I would think the reason for the constraints is that GM grossly underestimated the take rate on the options, and/or the suppliers are unable to produce to meet unforeseen demand. In the case of the Z51, there's so many associated components that the lack of tires, wheels, ceramic brakes (wasn't that an issue with the ZR1 rollout?) or combinations thereof could cause a constraint; or there's been a quality problem with certain components like the eLSD.


I found it interesting that almost every picture in the newly release brochure is a vehicle with the Z51 option, that can't be produced to meet the demand. How could they not have anticipated this outcome? Very unfortunate, and frustrating to this Z51 and FAY convertible orderer who can't get a car built.

Ya that's a good point. Youre probably right on the profitability part. But the brochure was partially where the idea came from. Just like you said why are there so many z51 with carbon fiber yet no one can get ahold of an order.
Frankie also has a good point, they're just holding the dam till enough water builds up then they open the flood gates

 

[sckennedy52]

Ya that's a good point. Youre probably right on the profitability part. But the brochure was partially where the idea came from. Just like you said why are there so many z51 with carbon fiber yet no one can get ahold of an order.
Frankie also has a good point, they're just holding the dam till enough water builds up then they open the flood gates

Had the opportunity to speak with someone today who has knowledge of reliable information. He suggested that GM has realized that the Z51 package is grossly underpriced. I gotta admit, when you think about everything that the Z51 has, $2,800 doesn't even come close to covering the costs. So perhaps, limiting the availability until pricing can be revised is a gameplan.

 

[Frankie]

Could very well be
There is no way they can tell me there are 0 parts for the z51.
There is something else going on.



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[Jims-c7]

When something is not available the more press it gets, the more people talk about it, the more people want it.
GM wants as many z51's sold as possible. I think it's a marketing ploy.
Think about it
When something or someone is hard to get we always want it more.
I would b willing to bet They have the parts. They are simply not releasing them.
The roof thing is crazy!
They know they have something special and they are milkin it.




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On your roof comment. I beleive that a lot of guys are buying 2 roofs. You see it all the time on the Museum delivery. I only bought one so you can't blame me

 

[Frankie]

Two roof buyers are minimal
GM is playin games...
Creating artificial demand is an old technique


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[elegant]

I fully agree that the higher the price of the sold car, the higher the profits, for everything is sold on a "margin basis." Options command a higher margin (result in more profits) to GM than the margin/profit on the "entry level car."

GM did not price the Z-51 so they lose money in it. On the contrary, they make money on every Z-51 package they sell. When, on January 13th, GM first announced the Z-51 content, everyone in the Corvette enthusiast community and in the "car media analyst community" thought it was going to be, at a minimum, a $5,000 option. Most guessed around the $6,000 level. When the pricing was announced on April 26th, positive "shock waves," rippled through both communities, and even late as last week, folks were talking about how much a bargain the package is. Predict a Z-51 price increase for "brand new" orders to $4K as early as the first of the year, and maybe a second price increase for the Z-51 package for the 2015's.

GM had to estimate every part/option "take rate," when they signed their supplier contracts. Considering the number of parts and options, they did pretty well. Unfortunately, every missed estimate is causing significant customer pain due to the constraints! GM clearly underestimated the Z-51 option sales (this package is selling at a higher rate than every Z-51 package they previously offered).

They also seriously underestimated how many folks would step up, purely for aesthetic reasons, and pay $1000 extra for a CF dash piece. And, just as obviously, they seriously underestimated how many would pay $2000 just to look at an exposed CF roof, for the standard roof is also made of CF, weights the same, is structurally the same, etc. (Separately, they probably overestimated how many would select the transparent roof.)

Regarding the comment that "there is no way that there are no z-51 parts," that is accurate. at least some of the Z-51 parts are going in to upcoming convertibles for those who ordered them as far back as August, and/or ordered them with those dealers who have the highest priority allocations. I believe that Z-51 parts are "put aside" for convertibles that are status 3000 or higher.

I realize how frustrating it is for all who have ordered a StingRay with one of the CF parts or the Z-51 package. Each day seems like a week, and each Thursday's constraint report feels lately like a stab in the heart. Hopefully we will get over these constraints soon!

There is some good news lately for those who have ordered convertibles. They are now assigning VINs in the 7,500 area, so convertibles will be coming down the line very, very soon, if not already produced and already at sitting in then "quality control hold" area.

 

[glen e]

Good answer john, there is hardly any "conspiricy", just some really bad moves in product planning and major supply chain issues which make the perfect storm of constraints. GM needs every sold unit retailed so they can finish out 2013 with a massive % increase over last year for the c6 vette, for their stockholders, the annual report and the industry media. Somebody lost their job over the cluster they have created. And conspiracies take meticulous planning and strategy, neither of which GM has at the moment.

 

[Frankie]

Price increases will b sooner rather than later...
I do believe GM is surprised at the incredible interest for this car. I still tend to believe they are fueling the fire. I read an article WEEKS ago that they were surprised that 75% of ordered cars were of the z51 variety. Can't get better publicity then that. Predictions of a one year wait got my ass to a dealer with an allocation.
If I could find one. That fueled the fire under my ass. That added to my urgency to get my order in. To create urgency is the most valuable tool to sell anything. Got me to a dealer pronto! Believe me GM knows this. If a price increase is ever threatened the market could go up the limit! All buyers no sellers! That will probably be GM's next move. Sites like this also help their cause. Lots of excitement on this site . All of us rooting for the next guy to get delivery. Modification plans and the like. Pictures of Red Hot are so cool. The yellow corvette. The black corvette the one I want on someone's driveway. Everyone wants to be a rock star. People taking pictures. Never saw anything like it. I certainly needed to be part of the excitement. I would say that you guys running this site deserve a commission for the car I bought. Even a customer care person to look up cars.
Amazing! All of this hype/constraints will eventually give GM there short term goal which is to sell out this initial allocation which will guarantee profitability. I'm surprised this hasn't already happened. One thing I will guarantee is that when the next allocation is released at higher prices there won't be any constraints.
Z51s will be a plenty at $4000-$5000.


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[mjw930]

I too agree with John's assessment but disagree with all those who think the Z51 package will have a price increase. What those who list the upgrades included in the package fail to understand is all the parts are incremental upgrades to components already installed and priced into the base car. It's not like you buying a car and replacing a part, leaving you with two parts. Let's look at the components one by one and speculate what the real incremental cost to GM is.

Dry sump, nothing more than a replacement oil pan and pump with a remote tank and some plumbing. Maybe $100
Bigger wheels and tires, both the base and upgraded wheels are forged, increase in rear tire cost minor, Maybe $100 all in.
Bigger brakes, both are brembo 4 piston. Factor in the two piece hat and that's maybe $300
E-Diff, this is probably the biggest ticket item, Maybe $500
Bigger shocks, stiffer spring, different trans gearing, pretty much a wash, Maybe $50

So, if you add that all up there is maybe $1050 more cost in the package, less than half what the up charge is which means the margin on a Z51 car is higher. Rather then increase the price, which will reduce the uptake, their smarter move is to restack their orders with their suppliers and make it easier deliver on the pent up demand.

 

[sckennedy52]

I fully agree that the higher the price of the sold car, the higher the profits, for everything is sold on a "margin basis." Options command a higher margin (result in more profits) to GM than the margin/profit on the "entry level car."

GM did not price the Z-51 so they lose money in it. On the contrary, they make money on every Z-51 package they sell. When, on January 13th, GM first announced the Z-51 content, everyone in the Corvette enthusiast community and in the "car media analyst community" thought it was going to be, at a minimum, a $5,000 option. Most guessed around the $6,000 level. When the pricing was announced on April 26th, positive "shock waves," rippled through both communities, and even late as last week, folks were talking about how much a bargain the package is. Predict a Z-51 price increase for "brand new" orders to $4K as early as the first of the year, and maybe a second price increase for the Z-51 package for the 2015's.

GM had to estimate every part/option "take rate," when they signed their supplier contracts. Considering the number of parts and options, they did pretty well. Unfortunately, every missed estimate is causing significant customer pain due to the constraints! GM clearly underestimated the Z-51 option sales (this package is selling at a higher rate than every Z-51 package they previously offered).

They also seriously underestimated how many folks would step up, purely for aesthetic reasons, and pay $1000 extra for a CF dash piece. And, just as obviously, they seriously underestimated how many would pay $2000 just to look at an exposed CF roof, for the standard roof is also made of CF, weights the same, is structurally the same, etc. (Separately, they probably overestimated how many would select the transparent roof.)

Regarding the comment that "there is no way that there are no z-51 parts," that is accurate. at least some of the Z-51 parts are going in to upcoming convertibles for those who ordered them as far back as August, and/or ordered them with those dealers who have the highest priority allocations. I believe that Z-51 parts are "put aside" for convertibles that are status 3000 or higher.

I realize how frustrating it is for all who have ordered a StingRay with one of the CF parts or the Z-51 package. Each day seems like a week, and each Thursday's constraint report feels lately like a stab in the heart. Hopefully we will get over these constraints soon!

There is some good news lately for those who have ordered convertibles. They are now assigning VINs in the 7,500 area, so convertibles will be coming down the line very, very soon, if not already produced and already at sitting in then "quality control hold" area.

Having a convertible with Z51 on order from the earliest opportunity, I'd be really less than happy if they bump the price of the Z51 prior to my car getting built. I think that would generate some very unfavorable press for the "car of the year". 2015 - fine, understandable. But I think it would be a huge mistake to up the pricing on an option that people have ordered and they can't produce for whatever reason.

 

[Frankie]

There could b a legal issue if they were to pull something like that...



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[mjw930]

You should be price protected with an accepted order. Even if it came in with a higher MSRP on the sticker your dealer should honor the contract price.


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[elegant]

Having a convertible with Z51 on order from the earliest opportunity, I'd be really less than happy if they bump the price of the Z51 prior to my car getting built. I think that would generate some very unfavorable press for the "car of the year". 2015 - fine, understandable. But I think it would be a huge mistake to up the pricing on an option that people have ordered and they can't produce for whatever reason.

As per my original comments, and much more importantly, based on past GM practice, announced price increases apply only to BRAND NEW ORDERS placed after yours was in GM's system. If GM, hypothetically announced a January 1, 2014 price increase on the "battery protection option, saying it would go from $100 (currently) to $115, then that $15 price increase would apply to those who placed their orders after January 1st, 2014.

 

[sckennedy52]

Having a convertible with Z51 on order from the earliest opportunity, I'd be really less than happy if they bump the price of the Z51 prior to my car getting built. I think that would generate some very unfavorable press for the "car of the year". 2015 - fine, understandable. But I think it would be a huge mistake to up the pricing on an option that people have ordered and they can't produce for whatever reason.

As per my original comments, and much more importantly, based on past GM practice, announced price increases apply only to BRAND NEW ORDERS placed after yours was in GM's system. If GM, hypothetically announced a January 1, 2014 price increase on the "battery protection option, saying it would go from $100 (currently) to $115, then that $15 price increase would apply to those who placed their orders after January 1st, 2014.

Elegant, I support what you've said, and hope to benefit by that, IF:
a. the constraints come off so that my order (and others) still sitting at 1100 move forward, and IF,
b. the dealer gets an allocation WHEN the constraints don't preclude my order (and others) still sitting at 1100 from moving forward.

To me, those are some big IF's as they pertain to my order (and others), and what options I might have if the constraints and allocations do not align perfectly for me! That being said, I've been told by "the informed" that my car will arrive, as ordered, in time for springtime enjoyment. I am/will be happy - i have open garage stall for the daily driver in case the snows come! Life is good...

 

[elegant]

It will be so good for all when all the constraints come off and all cars move forward. Waiting is such a horrible feeling, especially when their are unknowns!

Conversely, when the uncertainties are gone, waiting becomes excitement! Here's to that for all of you currently with constraints.

 

[JCobalt]

I am not surprised that 75% of ordered cars were Z51's. I was one of them. Why did I want this package so badly? I don't race, I don't need the slightly larger wheels. I was frustrated for only 5 short days before I decided to go in and get my deposit back. While I was there, a striking blue stingray with chrome wheels showed up. I couldn't resist test driving it and eventually buying it. But had I known beforehand that the non Z's were just as great looking, got as much attention and just as great for daily use, I wouldn't even have ordered the Z51. My post may be slightly off topic, but my point is if they hadn't hyped up the Z51 so much in every ad and every road test, maybe this issue wouldn't exist. To be completely honest, I only wanted the Z for its black wheel option. On a side note, my sales guy called me yesterday to tell me he had three Z51's in. Naturally, I drove right up to look at them. We talked for a while and kicked around some ideas, but I am completely happy with the car I purchased. I looked outside at my car, and, as usual, there was a small crowd around it. I love it, and I hope everyone gets exactly what they want sooner than later. But do know what you want and why you want it. Z or non Z, it's a special car.

 

[Fdxpilot]

Could very well be
There is no way they can tell me there are 0 parts for the z51.
There is something else going on.

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There doesn't have to be 0 Z51 parts. All it takes is a shortage of one part out of the several hundred that are different on the Z51. It could be something as simple as Michelin made a run of Z51 tires to fulfill GM's estimates, then put those molds in the back room to work on other product. "Need more of those Pilot Super Sports? We'll let you know when we run another batch."