Sky, Solstice and Corvette: S.O.S.

[Variance]

Sold Out: Saturn Sky, Pontiac Solstice and Chevrolet Corvette Are All Spoken For This Year

Date posted: 04-20-2006

NEW YORK — General Motors may have posted its sixth straight quarterly loss on Wednesday, but many of its low-volume sports cars, including the yet-to-be-launched 2007 Saturn Sky, are already sold out for this year, according to GM Vice-Chairman Bob Lutz.

In a speech in New York, the GM executive said in reference to the Sky, "All available production for 2006 is accounted for."

The Sky shares its platform with GM's other popular roadster, the Pontiac Solstice. Lutz said the Solstice has the best turn rate of any vehicle in its segment and that the car is sold out for the 2006 model year. Pontiac launched the Solstice last year and by the fall had about 13,000 orders for only 7,000 units. The roadsters are often selling for more than their starting sticker price of $20,490.

Lutz said the Chevrolet Corvette is also sold out for the 2006 model year.

What this means to you: Expect to pay top dollar for the Sky, the Solstice… and the Vette — if you can get your hands on one.

Link: http://www.edmunds.com/insideline/do/News/articleId=110101

[Petra]

Hey, I've said it before, I'll say it again: Build it, and they will come.

[Camino LS6]

I hope we've heard the "Kappa was a mistake" garbage for the last time.

This is great stuff.

[Bimmer325]

If this isn't a business case for the development of a more flexible Kappa II (coupes and sedans in addition to roadsters), I don't know what is.

[Chicagoland]

great, but they need to sell more high volume products. Hoping the Sky buzz translates into more Aura and Outlook sales.

Also, more RETAIL sales of Impala, Cobalt, Malibu, G6, etc, etc,etc...

[Camino LS6]

great, but they need to sell more high volume products. Hoping the Sky buzz translates into more Aura and Outlook sales.

Also, more RETAIL sales of Impala, Cobalt, Malibu, G6, etc, etc,etc...

Yeah,yeah heard it before. These cars are hits plain and simple, let's just celebrate that for a while shall we?

[hyperv6]

Bottom line a lot of G6 and Aura's will be sold due to increase in showroom traffic because of the Kappa's.

Many in past years could not buy a Vette but they bought Chevelles, Impalas and other cars because of the Vette.

It is an old trick and it works in the short term. Even the Fiero drew a lot of folks in to buy other Pontiac's in 84-85 before other problems came to be. If it was not for the Fiero helping sell Grand Ams, It could have been Pontiac not Olds taking the bullit.

Lets face it the Sky can and will make Saturn cool to own and get folks to look at the cars they might have ignored.

Pontiac still needs some new product other than the G6 to make much inroads.

Edited April 21, 2006 by hyperv6

[balthazar]

Bit of a stretch there, hyperv6.

[El Scorcho]

In theory, that's how it should work. But that's not always the case. (I don't feel like supporting my argument, so just go with it). I think once people start seeing the Aura and Outlook on the roads they'll first wonder who the hell made them, then probably check them out because of their exterior styling alone. Hopefully. Hey, I like them.

[enzl]

I may be in the minority, but I think it's poor GM planning, not that these products are hits....

I mean, how many Kappas can be built this year? I've heard 40k, including Opels...they should be selling out!

I do, however, buy into the halo car theory. Hopefully, that is something that with materialize into greater sales for Pontiac and Saturn, but its hard to quantify.

[Camino LS6]

They are selling out because they are highly desireable cars - period.

[sciguy_0504]

Damn, I can't get my SKY.

At any rate, these are selling out because they are great products that people want to own and are priced well. They are also selling out because the capacity is so low. Still, the bigger reason is that they are great cars.

It may bring it more sales for other models but I am somewhat skeptical. The Corvette, SKY and Solstice have a small but solid block of buyers/fans. Someone going to look at a Corvette is not going to say, "Oh, I can't make that monthly payment. Let me look at an Impala SS." The same thing with the Kappas, people are not going to look at/buy a small RWD coupe just to suddenly decide to get a FWD midsize sedan or crossover.

Bimmer has it, however. The success of Kappa should translate into a higher volume, more advanced and flexible Kappa II architecture.

Overall, great news but I'd rather have the rest or most of the rest of GM's 100+ cars selling well rather than having three sell out.

[NOS2006]

If this isn't a business case for the development of a more flexible Kappa II (coupes and sedans in addition to roadsters), I don't know what is.

For sure.

[Cadillacfan]

Wait.. haven't they already started working on a more flexible Kappa platform? I think Lutz was counting on the Kappa platform to be a high volume platform all along. He's a smart man. Imagine the potential with a small RWD platform with AWD capabilities. You can kiss Pontiac's FWD days goodbye.

Edited April 22, 2006 by Cadillacfan

[Croc]

I hope we've heard the "Kappa was a mistake"  garbage for the last time.

This is great stuff.

If this isn't a business case for the development of a more flexible Kappa II (coupes and sedans in addition to roadsters), I don't know what is.

They are selling out because they are highly desireable cars - period.

Ummm...when GM artificially limits their production, then they better be selling out. I won't be celebrating until the plant is at full capacity and they are STILL sold out...

GM is just making a limited run so that the sales are concentrated over a multiyear run instead of all being with the buzz and in the first year and a half with incentives o the hoods the remaining years.

As far as Kappa being a mistake? The way it was rushed through it sure was! The platform is one of the most inflexible, which is why we have a lot of 2-seater coupes.........and nothing else. Engineering costs would be far too great.

[pow]

Ummm...when GM artificially limits their production, then they better be selling out.  I won't be celebrating until the plant is at full capacity and they are STILL sold out...

GM is just making a limited run so that the sales are concentrated over a multiyear run instead of all being with the buzz and in the first year and a half with incentives o the hoods the remaining years.

As far as Kappa being a mistake?  The way it was rushed through it sure was!  The platform is one of the most inflexible, which is why we have a lot of 2-seater coupes.........and nothing else.  Engineering costs would be far too great.

Allocating/limiting production definitely worked for MINI. Four years since debut, sales are increasing, and people are still paying MSRP and waiting for deliveries. With the GTI, on the other hand, dealers are already knocking $1000 off from sticker.

[Camino LS6]

Ummm...when GM artificially limits their production, then they better be selling out.  I won't be celebrating until the plant is at full capacity and they are STILL sold out...

GM is just making a limited run so that the sales are concentrated over a multiyear run instead of all being with the buzz and in the first year and a half with incentives o the hoods the remaining years.

As far as Kappa being a mistake?  The way it was rushed through it sure was!  The platform is one of the most inflexible, which is why we have a lot of 2-seater coupes.........and nothing else.  Engineering costs would be far too great.

Croc, if they had followed your advice, we still would be waiting for the Solstice and Sky. And the naysayers would be damning GM for taking so long.

What we do have is hot sellers and a reason to expand the idea to a more ambitous program with KappaII. I'd say they made the right decision, at the right time.

[Croc]

So? If one more year would have meant a more flexible platform with more derivatives, more trunk space, etc, then I think it would be worth it. People want the car based on the styling, not because in 2006 they decided it was the year of the roadster.

A better overall package that wasn't so damned expensive and limiting for GM would also mean derivatives to keep the buzz going, a more consumer-friendly package that could be in greater demand and sell out still while producing a higher number of units...and more profitability.

Edited April 22, 2006 by Croc

[Camino LS6]

So?  If one more year would have meant a more flexible platform with more derivatives, more trunk space, etc, then I think it would be worth it.  People want the car based on the styling, not because in 2006 they decided it was the year of the roadster.

So Saturn and Pontiac would not be making headlines today.

So GM would be constantly berated for not getting the cars to market in a timely fashion.

So, it would be too late to matter.

Producing these cars now is an investment in the future of two brands.

[Croc]

So Saturn and Pontiac would not be making headlines today.

So GM would be constantly berated for not getting the cars to market in a timely fashion.

So, it would be too late to matter.

Producing these cars now is an investment in the future of two brands.

Pontiac and Saturn wouldn't be entering a segment "too late" since they are practically creating the segment. What else competes? Miata? That's about it.

Producing them now is an investment...yes...but a bad investment. We have a white elephant platform that is decent at producing one type of vehicle. That's it. Hardly an investment for the future.

[Camino LS6]

Pontiac and Saturn wouldn't be entering a segment "too late" since they are practically creating the segment.  What else competes?  Miata?  That's about it.

You miss the point. Too late to give Saturn and Pontiac much needed public buzz.

Producing them now is an investment...yes...but a bad investment.  We have a white elephant platform that is decent at producing one type of vehicle.  That's it.  Hardly an investment for the future.

Wrong again. What we have is proof that the premise works achieved by using parts bin pieces and an otherwise shuttered facility. That is paying workers to actually build cars instead of sitting in the job bank. And they are building cars that people actually want to buy- good experience. Finally the obvious success of the kappa cars gives Lutz the firepower he needs to finance a more flexible small RWD architecture. Can you imagine the roadblocks to that idea if Kappa wasn't built?

[ocnblu]

Somehow I'm feeling that Croc's attitude on the fun, affordable, sold out Kappa platform has something to do with Josh.

These cars are good for GM, even at these low volumes. The magic of desirability is precious.

I say this is encouraging for those of us who wish for a smaller-than-Zeta RWD platform from GMNA for Chevy and Pontiac... that 260 hp turbo engine would sing such a sweet song in a Tempest, for example.

[Camino LS6]

Somehow I'm feeling that Croc's attitude on the fun, affordable, sold out Kappa platform has something to do with Josh.

These cars are good for GM, even at these low volumes.  The magic of desirability is precious.

I say this is encouraging for those of us who wish for a smaller-than-Zeta RWD platform from GMNA for Chevy and Pontiac... that 260 hp turbo engine would sing such a sweet song in a Tempest, for example.

You are a man of vision.

[Croc]

Somehow I'm feeling that Croc's attitude on the fun, affordable, sold out Kappa platform has something to do with Josh.

That would make you a moron.

Kappa isn't making any money for GM due to the engineering costs. It is losing money. Having a more flexible platform that could spawn more variants would result in better economies of scale and spread the fixed costs out so that the platform might reach profitability. That's it. My dislike for Kappa has to do with the fact that it was rushed and not thought through very well before being approved. As a result, we have two roadsters and that's it. Every proposed variant doesn't make it past the green light. Why? Kappa isn't flexible enough for anything other than 2-seat roadsters. What about a hardtop? Doubtful, since the gas tank still takes up 90% of the trunk. Roadster buyers are a lot more forgiving of virtually zero trunk space. But coupe buyers? Not as much.

Had the business cases been more properly thought out and the platform created so that other types of vehicles could feasibly produced, then I would be a fan of Kappa. But it wastes money, isn't likely to be profitable, and just exacerbates GM's problems...

Yea, ocn, it just HAS to be because Josh owns one

[Croc]

I say this is encouraging for those of us who wish for a smaller-than-Zeta RWD platform from GMNA for Chevy and Pontiac... that 260 hp turbo engine would sing such a sweet song in a Tempest, for example.

Only if it's profitable. Guess what? It isn't!

[ocnblu]

And there ya go. A clear demonstration.

[Charger4U]

wow, im glad gm gettin it back.

[Guest Josh]

Only if it's profitable.  Guess what? It isn't!

<{POST_SNAPBACK}>

Do you have access to GM's cost sheets? You don't. You have no idea at what point GM has made $$$$ or will make $$$. If you had the information, then you yourself would be in the $$$$.

Fact is, we're enthusiasts, we're not financial guru's however I will say that it does not make something making money to make it a resounding success.

The Solstice is just that. I dont know if they make a buck or lose $1200 on everyone they sell. That doesnt matter to me because the appeal the cars create is enough to make it a success, even if it never breaks even as a program.

[Northstar]

Kappa cost $250 million to make (along with the Solstice I believe). The Sky was basically free because Opel needed a roadster anyways.

Now, I'm guessing GM makes about $1500 on each Solstice and about $2000 on each Sky. It's going to sell about 20k Solstices and about 15k Skys annually. Of course I could be wrong on the profit, but it seems quite possbile, IMO.

Now, if that is correct, then GM will make $60 million annually on the Kappas. That doesn't factor in any interest or when the higher-margin GXP and RedLine come. If the Solstice and Sky are on sale for 5 years, and sell without incentives throughout and at the same volume, then they will turn a profit of $50 million in 5 years time.

I could be totally wrong, but I'm guessing they will make money over the course of the project.

[Guest Josh]

Over 5 years which is exactly why General Motors has limited production, to sustain profits as well as momentum. I wouldnt have purchased the car if everybody on the block owned a two seater 'vert.

GM is doing the right thing by limiting production to maximize on long term profits.

[Croc]

Oh, I agree. There is only a very limited demand for a 2-seat roadster with no trunk space. Therefore, it really is necessary for GM to limit production. That said, when production is artificially capped, I just don't see the cause for celebration. Again, it isn't the Chevrolet Impala selling out at maximum capacity. I just don't see the celebration: "Yay! GM limited the production to less than demand and it SOLD OUT!" No &#036;h&#33;, Sherlock...I'd frankly be very worried if it hadn't.

-----

Also, selling the vehicles above MSRP benefits the dealers, not GM. GM still sells them at the invoice price and receives the invoice amount regardless of how much the dealership charges the customer.

[Camino LS6]

*sigh*

[Croc]

Kappa cost $250 million to make (along with the Solstice I believe). The Sky was basically free because Opel needed a roadster anyways.

Whether the SKY was the "free" vehicle or the Opel GT (I actually think it is the latter) is irrelevant. Since those vehicles are not Solstice badge jobs, they had a price tag. The program cost more than just Kappa/Solstice.

Now, I'm guessing GM makes about $1500 on each Solstice and about $2000 on each Sky. It's going to sell about 20k Solstices and about 15k Skys annually. Of course I could be wrong on the profit, but it seems quite possbile, IMO.

I will cautiously agree with those numbers.

Now, if that is correct, then GM will make $60 million annually on the Kappas. That doesn't factor in any interest or when the higher-margin GXP and RedLine come. If the Solstice and Sky are on sale for 5 years, and sell without incentives throughout and at the same volume, then they will turn a profit of $50 million in 5 years time.

The fallacy is still that the Opel GT/SKY have a price tag on them. They aren't just $2000 profit.

I could be totally wrong, but I'm guessing they will make money over the course of the project.

If the product life cycle is long, and if more vehicles are proposed, like the possible SAAB. Why do you think these other vehicles keep getting proposed? Because GM wants to make money. As of now, Kappa will essentially break even. GM needs substantial, meaningful profits. The reason GM keeps doing this "Kappa Dance" with approval/rejection of products is because:

1) There is a very limited market for 2 seat roadsters.

2) Any new product that isn't a straight badge job (Opel GT) costs money.

3) GM has yet to dream up a product that can sell in substantial numbers, spread out the sunk costs of Kappa more than it contributes to program costs (i.e. not cost too much to make)

4) Be a product that is actually desirable

GM offers 2 vehicles in a segment that really only consists of 3. Adding another will saturate the market further. As is, a few years down the line the SKY, Solstice and Miata will be cannibalizing sales from each other since the buzz will have died down.

-------------------------------

To all those who think Kappa shouldn't have been rushed to market, one last point:

Yes, we have the cars now...but GM is going to have to spend lots of money for successive generations. Kappa isn't a platform that will underpin generations of vehicles. No, it was one platform that, because it was rushed to market, necessitates a large capital expenditure if GM wants a real small RWD platform that can underpin more than just small, 2 seat roadsters with no trunk space (without massive rear overhangs).

[evok]

I may be in the minority, but I think it's poor GM planning, not that these products are hits....

I mean, how many Kappas can be built this year? I've heard 40k, including Opels...they should be selling out!

I do, however, buy into the halo car theory. Hopefully, that is something that with materialize into greater sales for Pontiac and Saturn, but its hard to quantify.

Come on - you know I agree with you but we have cheerleaders here not business people.

Great GM is profitable selling a couple 2 seaters at the moment. Wow, but that darn 4.490 million other vehicles that are not. Go GM, the is great news. Wow I have hope for the future. GM is great. Three cheers, Gooooooo GM. You prove to the world you can sell 2 seaters but no other cars. Wow great news.

[CaddyXLR-V]

Come on - you know I agree with you but we have cheerleaders here not business people. 

Great GM is profitable selling a couple 2 seaters at the moment.  Wow, but that darn 4.490 million other vehicles that are not.  Go GM, the is great news.  Wow I have hope for the future.  GM is great.  Three cheers, Gooooooo GM.  You prove to the world you can sell 2 seaters but no other cars.  Wow great news.

It's great for someone who likes 2 seaters :AH-HA_wink:

[evok]

Somehow I'm feeling that Croc's attitude on the fun, affordable, sold out Kappa platform has something to do with Josh.

These cars are good for GM, even at these low volumes.  The magic of desirability is precious.

I say this is encouraging for those of us who wish for a smaller-than-Zeta RWD platform from GMNA for Chevy and Pontiac... that 260 hp turbo engine would sing such a sweet song in a Tempest, for example.

"Pontiac and Saturn wouldn't be entering a segment "too late" since they are practically creating the segment. What else competes? Miata? That's about it.

Producing them now is an investment...yes...but a bad investment. We have a white elephant platform that is decent at producing one type of vehicle. That's it. Hardly an investment for the future.

This is what I read from Croc: Money could have been better spent. I agree. Kappa was and is a waste of continuing resources. The platform is limited and can not spawn the variation that is need. IMO I would rather have today a small 4 door RWD vehicle than a limited rag top. Why a small rwd is volume, the Solstice is not. For me that is case closed.

For me to put this into perspective. You hope for a futuer small rwd vehicle. Kappa does not make that possible. But if GM were smart, kappa would be doing that right now and you would not have to hope.

That is why kappa was stupid.

[Camino LS6]

*sigh* V. 2.0

[evok]

*sigh* V. 2.0

Yup - The Mods bring it on themselves by not focusing the discussion. If you have a problem with it?

[Camino LS6]

Yup - The Mods bring it on themselves by not focusing the discussion.  If you have a problem with it?

I honestly have no idea what you mean by this post.

Certainly, we've established that our viewpoints on this topic differ greatly.

We find one another's positions absurd.

I was just expressing my opinion in shorthand.

[Guest Josh]

Furthermore, dont include me in the "mods" point of view. Include me in the "non business men" point of view.

Which you proved is very needed inside General Motors.

Thanks, Evok. For spelling out a bean counters true intentions.

[evok]

I honestly have no idea what you mean by this post.

Certainly, we've established that our viewpoints on this topic differ greatly.

We find one another's positions absurd.

I was just expressing my opinion in shorthand.

There is a difference, I put most of your opinion in the same catagory as the BM. Irrational and not based on reality; just opinion and I have no use for that.

There is another difference, you might think me absurd, but I will be more right than wrong. Touche - pick another angle with a real thought out argument and I might actually have some respect for you. Until than I do not. You do not challenge me with your insight. Because there is none. I only banter with you because you are an easy target.

[Guest Josh]

I smell a <Joseph Langley> coming on

[turbo200]

I smell a <Joseph Langley> coming on

sorry to get into this----but don't be a jackass, again. recognize evok's opinion as more than just an opinion--an idea based in real fact and understanding. your threaten to harass another valued member is masochistic to this site.

[Delta Force79]

Curry Chevrolet here in Westchester New York, has had the same c6 Vette's sitting out front for months.....they have about 3 or 4 of them....and no one has bought them

[ZL-1]

Thanks, Evok. For spelling out a bean counters true intentions.

What exactly are "bean counters true intentions" in your opinion?

Edited April 23, 2006 by ZL-1

[ocnblu]

The public's perception of these vehicles is the key. Kappa is good for GM because people love the cars. Product is going to save GM. You have to spend money to make money. Building these cars has generated goodwill. Positivity like this helps. Emotional connection helps. Kappa itself will not "save" GM, but it is an example, external and internal to GM, that they can innovate with success and produce a desirable product. There are lessons to be learned here, from the guy who considered an MX-5 but bought a Sky after seeing it, all the way up to Bob and Rick.

Naysayers on this project astound me... as if GM, by some wild scenario, didn't know what they were doing when they greenlighted this special little car. This was not a 3 billion dollar project, it was done on a relative shoestring, and it was money well spent for the amount of positive press and public reaction it has received.

[ZL-1]

The public's perception of these vehicles is the key.  Kappa is good for GM because people love the cars.  Product is going to save GM.  You have to spend money to make money.  Building these cars has generated goodwill.  Positivity like this helps.  Emotional connection helps.  Kappa itself will not "save" GM, but it is an example, external and internal to GM, that they can innovate with success and produce a desirable product.  There are lessons to be learned here, from the guy who considered an MX-5 but bought a Sky after seeing it, all the way up to Bob and Rick. 

Naysayers on this project astound me... as if GM, by some wild scenario, didn't know what they were doing when they greenlighted this special little car.  This was not a 3 billion dollar project, it was done on a relative shoestring, and it was money well spent for the amount of positive press and public reaction it has received.

I do agree that Kappa was an exercise by Lutz to show what GM talent can build when properly motivated.

However, the key point in this discussion is that GM could have made an investment that would allow them to refocus the Pontiac brand as a whole, possibly giving Cadillac a 3-series sized RWD car, and still have the Solstice/Sky/GT. What some people criticize is not the image boost that these cars give, its how GM once again seemed to look at a partial solution when they could have gone much further.

[sciguy_0504]

What some people criticize is not the image boost that these cars give, its how GM once again seemed to look at a partial solution when they could have gone much further.

[balthazar]

So with the money spend on 2 variants of one new car/platform, the entire Pontiac lineup could've been 'refocused as a whole'?

How??

And again, we've been over this numerous times: the CTS IS a 3-series-sized RWD car. Not every car that competes in that price range/segment is exactly the same dimensions as the 3-series, so why is it only the CTS 'doesn't compete'? Nevermind, I am far too weary of this uber nitpicking to discuss it all again. Some people will simply NEVER be pleased, and that is fine; to attempt to do so is pointless.

Ocnblu is right on with his post.

[ZL-1]

So with the money spend on 2 variants of one new car/platform, the entire Pontiac lineup could've been 'refocused as a whole'?

How??

A flexible enough platform would provide for a full line of small RWD 'G4' cars: sedan, coupe, roadster, maybe even a wagon. A larger RWD 'G6' range could be based on the same platform, so it wouldn't be just two variants: the examples I gave were examples of how GM could leverage resources to achieve volume instead of going for a product that will have limited impact in GM's bottom line.