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Camaro races ahead of GM's profit expectations

Retro muscle car far more lucrative than automaker had originally forecast

Jan 13, 2010

Tony Van Alphen
Business reporter

DETROIT–The Chevrolet Camaro muscle car, which General Motors builds in Oshawa, has become far more profitable to the automaker than original forecasts, says company vice-chairman Bob Lutz.

Lutz, GM's product guru, said the iconic car is beating internal sales projections, easily surpassing estimates for average transaction prices and the combination is leading to big profits.

He said GM is making an average of $8,000 to $9,000 (U.S.) more per sale than it anticipated on models with transaction prices in the $35,000 to $40,000 range.

"What is especially remarkable is the average transaction price," Lutz told reporters at the North American International Auto Show.

"It's way, way higher than we expected it to be and the profitability of the vehicle has turned out to be far better than our expectations."

Lutz said one of the reasons for the strong profitability is, ironically, fuel economy. GM promoted the V-6, 300-horsepower, more fuel-efficient model with lower pricing and less profit to encourage sales.
The company then overpriced the V-8, more powerful, less fuel-efficient model to keep its sales down.
In Canada, the manufacturer's suggested price is almost $27,000 (Canadian) for the V-6 model and $37,000 for the V-8 version. But V-8 sales still outpaced the V-6s by a wide margin in both countries.

"End result: 80 per cent of sales, V-8s," Lutz said.

The Camaro ceased production at GM's plant in Ste. Thérèse, Que., in 2002 after 35 years, but was revived in March last year in Oshawa after a concept at the show generated a huge positive response. Production on one shift with some overtime totalled more than 83,000 in less than 10 months last year.

Waiting times for delivery for the Camaro in Canada vary, but could be up to 90 days.

The Canadian Auto Workers pressed GM to add another shift to meet demand but the company has rejected that idea.

Muscle cars normally have a strong sales start for 18 months to two years before gradually losing their momentum.

Automakers add special edition models to boost interest after the initial surge. GM is adding a Camaro convertible model in the first quarter of next year.

The Camaro, which uses ads with such tag lines as "lust conquers all," is up against Ford's Mustang and the Dodge Challenger and Charger, which have posted some good sales numbers in recent years.

Lutz attributed the success of the Camaro to designing more than just a retro car, but one with modern styling cues.

He said original clay models of the Camaro looked a lot like versions from the late 1960s, but then-chief executive officer Rick Wagoner told designers they should do more work.

GM showed Camaro buffs and collectors the second version and they criticized it sharply because the car didn't look like the early models.

"Not looking too much like a '67 turned out to be a good thing," Lutz said.

Quote:

Originally Posted by From: wheels.ca

DETROIT–The Chevrolet Camaro muscle car, which General Motors builds in Oshawa, has become far more profitable to the automaker than original forecasts, says company vice-chairman Bob Lutz.

:happyanim::popcorn::thumbup::clap::clap::clap:

Link to Article
http://www.wheels.ca/Article%20Category/article/783828