GM's Recent C8 Corvette Price Increase Isn't All Bad News

I was fortunate recently to get to spend some quality time with a 2023 C8 Corvette. Given this isn’t a car review, I’ll just say what an awesome car it is in so many ways though. I am grateful GM gave us the opportunity to buy a super car in our lifetime that doesn’t cost over $200k.

What struck me though was a move GM made this week that upset a lot of car enthusiasts. They announced a flat $2000 price increase only a couple weeks into the 2024 production year. This was after increasing the base 2024 MSRP around the same $2000 just a few weeks before. The 2024 Corvette now cost about $4000 more than a similar 2023. A lot of people have cited they think this change was because of supplier cost increases, GM’s greed, and/or wanting to prepare for increased costs coming from the UAW strike.

As a student of the car industry, I think it is something much more strategic than that. This was actually a good move on GM’s part with deeper implications to the car’s future. With the 2023 production run of Corvettes coming close to setting an all-time production record, GM has finally come very close to supply and demand being level on the C8 generation for non-Z06 models. In fact, I have even seen the first discounts of around $2000 being offered by dealers in the north who have unsold inventory. This is new to C8 corvette, as up until just recently, these cars were almost always pre-sold & if lucky, you paid MSRP.

GM knows (assuming the strike doesn’t drag on and impact Corvette production) that base Corvette supply and demand has reached a balancing point and part of the draw to these cars was the low depreciation & strong residuals the last few years. People could drive these cars for little or no costs (maybe even gains in many cases, but those days are likely over). That kept repeat customers coming back to Chevrolet dealerships to order new models and the supply and demand imbalance kept residuals high with the super desirability of the car for multiple reasons. Now with supply finally hitting a new level, GM is doubling down with their price increase. Raising the price of the 2024 by now another $2000 allows them to avoid having to offer incentives on remaining 2023’s by about the same amount. It draws customers who maybe wanted a 2024 to seriously consider a 2023 since the base price is at least $4000 less. Not to mention this move also gives some residual cushion to 2020-2023 Corvettes because the new ones are now even more expensive with this week’s move. They know customers will complain about the price increase, but for a car like this, many won’t be walking away from their 2024 orders that haven’t been price protected.

So like many, I’ll be watching to see the impact of this latest price increase and especially given the changing supply dynamic of one of the hottest cars in recent years. Despite the latest noise, I applaud GM’s move to protect residuals and retentions in a different way than maybe was expected.

#residualvalues #C8 #Corvette