Has The Affordable RWD Sports Coupe Become A Money Loser?

[tennisfreak]

Chevy has sold over 64K C7 vettes worldwide since its indroduction.

It being "affordable" is debatable but I can say this Chevy listened to its critics of the vette and addressed the concerns. Greatly improved interior, better suspensions and handling, and better transmissions.

Seems that Chevy realizes if you give people what they are asking for then people will buy their products.

Now if Toyota and Subaru will quit adding overpriced cosmetics to the twins and address the things people and critics are asking for maybe sales of the twins would pick up?

[Rampage]

Originally Posted by tennisfreak

Chevy has sold over 64K C7 vettes worldwide since its indroduction.

It being "affordable" is debatable but I can say this Chevy listened to its critics of the vette and addressed the concerns. Greatly improved interior, better suspensions and handling, and better transmissions.

Seems that Chevy realizes if you give people what they are asking for then people will buy their products.

Now if Toyota and Subaru will quit adding overpriced cosmetics to the twins and address the things people and critics are asking for maybe sales of the twins would pick up?

It only took them 50+ years.

[rice_classic]

Originally Posted by Dadhawk

And since they are mentioned on this forum all the time the new Mustang (#20) has boosted sales by 52% but that will fall off, and does appear to be hurting #32 Camaro sales, which are down 11% for the year.

The difference is that I cannot show up to HERTZ or Enterprise and rent a BRZ or FRS.

Unfortunately we don't get to see the non-fleet sales figures for the Mustang or Camaro.

[jvincent]

Originally Posted by tennisfreak

Chevy has sold over 64K C7 vettes worldwide since its indroduction.

It being "affordable" is debatable but I can say this Chevy listened to its critics of the vette and addressed the concerns. Greatly improved interior, better suspensions and handling, and better transmissions.

Seems that Chevy realizes if you give people what they are asking for then people will buy their products.

Now if Toyota and Subaru will quit adding overpriced cosmetics to the twins and address the things people and critics are asking for maybe sales of the twins would pick up?

Don't forget, the Corvette has over 60 years of brand awareness going for it.

Multiple generations have admired, critiqued, loved, hated, desired the car depending on which model year you are talking about. It is an "iconic" car for all of those reasons.

So, now they have started to make it both relatively affordable AND have fantastic performance to boot, it's not a surprise that they are selling a boatload.

The GT-86/FRS/BRZ have been around for 3 years now. That's a lot of ground to make up. Ignoring the mixed marketing message of the three brands, the twins still have a lot of ground to make up.

If Toyota/Subaru stay committed to the platform then the GT86 will evolve to meet the needs of the market.

[Dadhawk]

Originally Posted by rice_classic

The difference is that I cannot show up to HERTZ or Enterprise and rent a BRZ or FRS.

Unfortunately we don't get to see the non-fleet sales figures for the Mustang or Camaro.

Not sure I understand the point you are trying to make. I would imagine fleet sales of Mustang and Camaro is a small percentage of the overall sales figure.

Obviously, Chevy/Ford's willingness to sell a range of submodels definitely helps in the numbers.

[rice_classic]

Originally Posted by Dadhawk

I would imagine fleet sales of Mustang and Camaro is a small percentage of the overall sales figure.

I would argue otherwise but unfortunately neither one of us can know if we're right or wrong because GM/Ford won't delineate between fleet and non fleet. Just like Honda just lists "Civic" and not trim level sales figures so it's hard to know how many "Si's" have sold. Hyundai is the same with the Genesis, they don't differentiate between the coupe and sedan in the sales numbers.

The point of the fleet sales ensures the car is out of the territory of loss-leader as the unit volume is such that it's a profitable platform in and of itself.

Maybe Toyota/Subaru should consider this option. I know for sure that if I was on business trip I would rent sports car instead of Ford Fusion.. unless, that is, I had to chauffeur a client around.

[Who8myrice]

Starting this year, allocation of frs seems low compared to last year.
We only get few each month but boy they still sell.

[Dadhawk]

Originally Posted by rice_classic

I would argue otherwise but unfortunately neither one of us can know if we're right or wrong because GM/Ford won't delineate between fleet and non fleet. .

CAUTION: Pure speculation ahead using suspect data from the Internet!

True I suppose, but all those rentals do eventually end up in private hands, normally in less than 12 months to 24 months, so I'm not sure how much it matters between fleet and non-fleet from an original sales prospective. If anything the resale of low mileage fleet cars hurts the sale of new cars. I would buy a fleet car over a new car, and have done that in the past.

Here's what we can do to tell how much of the fleet it is. Hertz Sales lists 9,603 cars for sale within 500 miles of my location (that is the widest it lets you go). That does cover some of the larger markets where Hertz rents these types of cars though (Atlanta/Florida)

Of those 9,603 cars 9 are Camaros and 28 are Mustangs, including 1 Penske Mustang.

So, at least today, Camaros represent 0.09% of the Hertz retiring fleet in my area and Mustangs represent 0.29%. I would hazard to guess, and that is all it is, that Mustangs are higher because they want to move to the new model.

Hertz does use a combination of sales and returns so I suppose it could be that they return more pony cars to the manufacturers then they sell.

But, on the surface at least, it would appear the cars represent a pretty small part of the 350,000 cars that Hertz buys in a year. Even if my projection is off by a factor of 10 it would only be a couple thousand cars per model. Given the Camaro averaged about 7,100 sales a month for the past 12 months in the US, and Ford is about the same, I'd maintain its a pretty small percentage of all sales.

[rice_classic]

That is, admittedly, a significant extrapolation from a very limited sample (aka; 1).

There's also enterprise, thrifty, budget, avis, dollar rental etc; that all offer a mustang (or at least googling suggests they do).

Some googling also points to the fact that the V6 Mustang exists specifically for the fleet market segment even though it is available through retail (and improved over the last few years).

But, nonetheless... None of this means anything when discussing the principle of a "loss leader" in a thread titled: has the affordable RWD sports car become a money loser...over the last 60 years is that most affordable RWD sports cars were mostly intended to be loss-leaders.

The answer is NO. The car itself may not be profitable (with few exceptions) but a non-profitable affordable, rwd sports car can still lift margins for the company or the brand as a whole. The fact that Subaru/Toyota have one, Mazda is making a new Miata, Hyundai has one, Kia has been toying with one, Ford/Chevy has always had one and Nissan/Infiniti both support the platform suggests that an attainable RWD sports car is still financial benefit to the brand as a whole. Scion/Subaru/Toyota have also stated that the 86 is selling above targets, so it's hard to see doom an gloom when the manufacturer of the car says, "Well it's doing better than we planned on!"

This loss-leader model also applies to some super cars. The LFA is a massive loss on every sale for example. Heck it even applies in other industries... How many years did Amazon operate before turning a profit? How many Xbox 360s did MS sell and for how many years at a loss on each unit before that department became profitable (answer: lots). Ink-Jet printers are another example: sell the unit at no-margin or even a loss and make money on ink.

[Braces]

Not a money loser if Toyota/Lexus continue to use this 86 chassis in future cars. They will recoup the invested R&D and save money with the future cars.

[Tcoat]

Originally Posted by rice_classic

But, nonetheless... None of this means anything when discussing the principle of a "loss leader" in a thread titled: has the affordable RWD sports car become a money loser...over the last 60 years is that most affordable RWD sports cars were mostly intended to be loss-leaders.

.

This, this and this.
Unless your core business is RWD sports cars (Porsche, Lambo, Ferrari, etc) you do not build them expecting a profit. You build them to get people talking about your brand.
Close thread all done!

[gramicci101]

Originally Posted by Tcoat

You build them to get people talking about your brand.

Which I don't understand. Who is going to think "Man, that corvette is sexy. But you know that cobalt is pretty sweet too! Hmm..."

Or if they're looking for an economy sedan, are they really going to think "Hmm, I should look at a cobalt. After all, it's made by the same company that makes the corvette..."

[Tcoat]

Originally Posted by gramicci101

Or if they're looking for an economy sedan, are they really going to think "Hmm, I should look at a cobalt. After all, it's made by the same company that makes the corvette..."

A surprisingly large portion of the car buying population thinks exactly like that!
We as car guys do not but we are not "normal".

[gramicci101]

Originally Posted by Tcoat

A surprisingly large portion of the car buying population thinks exactly like that!

Thus reaffirming my opinion of the majority of the population. Sigh. The two cars have absolutely nothing in common, other than the brand. Oh, and they might share window switches.