Autos

Chevy's new mid-engine Corvette needs Gen X and millennial buyers to succeed

Key Points
  • The 2020 Chevrolet Corvette will be arriving in dealerships as early as next week.
  • The success of the eighth-generation Corvette will largely be on whether the mid-engine car can attract a new generation of buyers.
  • In a vote of confidence, GM added a second shift to its Kentucky plant that builds the car for the first time since 1985.
2020 Chevrolet Corvette
Michael Wayland / CNBC

LAS VEGAS – The success of the 2020 Chevrolet Corvette won't solely be defined by the car's profits, performance or initial sales, which the company is describing as "unprecedented."

The success of the eighth-generation Corvette will largely rest on whether the mid-engine vehicle can attract a new generation of buyers that have a growing number of high-performance sports cars to choose from, including all-electric vehicles from Tesla, Porsche and others.

"We have great loyalty from Corvette but we've got to reach out to new types of buyers," Steve Majoros, Chevrolet vice president of marketing, told CNBC during a media event ahead of the car arriving in dealerships as early as next week. "If we did all this work and we don't conquest, we don't get stronger in markets like Miami and Los Angeles; we have to win them."

U.S. sales of the Corvette have steadily declined since 2014, after more than doubling with the arrival of the seventh-generation car. It's a common sales trend for performance vehicles such as the Corvette, however it's one General Motors wants to break with the new vehicle.

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"It is clearly not our expectation to be a one-hit wonder," Majoros said. "If that were the case, we wouldn't have added a second shift. It is our intention to sell at volume more than we've sold before and sustain that volume."

In a vote of confidence for the car, GM added a second shift to its Kentucky plant that builds the car for the first time since 1985 after the introduction of the fourth-generation Corvette. The previous second shift only lasted a year.

Majoros stopped short of saying the company expects record sales, however he said there's been "unprecedented" demand for the new Corvette. That includes more than 45,000 reservations as of October and about 192,000 "hand raisers" who requested information about the vehicle through Chevrolet.com, he said. The car's current sales record of 53,807 was achieved in 1979, according to GM.

To sustain sales, it's crucial for GM to grow its customer base beyond baby boomers. Auto research firm Edmunds reports 33% of Corvette buyers were age 65 or older in 2019, up from about 28% in 2013. About 61% of buyers were 55 or older through 2019, according to Edmunds.

2020 Chevrolet Corvette
Michael Wayland / CNBC

"Corvette is an aging buyer," said Jessica Caldwell, Edmunds executive director of industry analysis. "It is important that it attracts some new blood, hopefully some younger blood because you want people to stay within the Corvette family for years to come."

GM, according to Majoros, plans to offer different variants of the Corvette in the years to come, however he declined to discuss specifics, including potential hybrid or all-electric models.

"The Corvette franchise always has a lot of room to grow and we fully intend to grow," he said. "You'll see things from us that you've traditionally seen and you'll probably see some things that you've not traditionally seen."

Growing the segment

Barry Engle, GM president of the Americas, expects the mid-engine Corvette to not only increase sales of the famed sports car but to also grow the segment.

"We'll be the segment. We'll drive that market," Engle told CNBC during an event last month. "We will dramatically increase the size of that segment."

Defining Corvette's segment can be difficult due to the wide-ranging price, performance specifications and nontraditional competitors entering the market.

GM says it benchmarked the 2020 Corvette against the likes of the Porsche 911, Ferrari 458, Audi R8 and McLaren MP4-12C. None of those vehicles are top trade-in models for the Corvette, however Edmunds reports the 911 was the second most cross-shopped vehicle last month for the Corvette.

2020 Chevrolet Corvette
Michael Wayland / CNBC

The starting price of the 2020 Corvette is just under $60,000 but heavily upgraded and accessorized models can top $100,000. Cox Automotive reports the average price consumers paid for the Corvette last year was $72,729 – less than half the average price paid of a 911 and Acura NSX.

The 2020 Corvette is powered by Chevrolet's LT2 small-block 6.2-liter V8 engine rated at 495 horsepower and 470 pound-feet of torque. It's 0-to-60 time is three seconds or less with an optional performance package. The new layout of the car with the engine behind the driver instead of under the hood allowed for such levels of performance, officials said.

GM also significantly upgraded the Corvette's interior compared with previous generations, including significantly more levels of customization – from seat belt colors to unique driver screen clusters.

Despite the improvement, Karl Brauer, executive publisher at Cox Automotive, said it's going to be difficult to attract buyers of higher-end products from foreign auto brands.

"The Corvette loyalists are incredibly committed, and the non-Corvette people are almost equally as committed to not buying one," he said. "This car can hopefully cross that gulf between those two groups but it's not going to be easy."

Alienating traditional buyers?

GM must attract new buyers without alienating its loyal customer base for the Corvette to be successful. About half of buyers who trade in a vehicle for a Corvette are trading in an older version of the car, according to Edmunds.

While some have speculated the mid-engine layout could alienate the car's traditional buyers, GM has experimented with a mid-engine layout for decades, including the Chevrolet Engineering Research Vehicle, or CERV, prototypes in the early 1960s.

GM's CERV II debuted in 1964. It was envisioned as a challenger at Sebring, Le Mans and other races.
GM

"Mid-engine has always been part of Corvette's destiny and it's something we've been looking at for a very, very long time," GM President Mark Reuss said during the vehicle's unveiling in July 2019. "All along, it has been absolutely paramount that we keep Corvette true to its roots of obtainable performance. Mid-engine has historically proposed a challenge to this mission. Not so anymore."

Corvette Club of America President Jim Streight, who has owned three Corvettes, including his first vehicle as a teenager, doesn't believe the mid-engine layout will alienate the car's traditional customer base because of that history.

"It's been a long time coming," he said, adding a "decent amount" of club members plan on purchasing the new car. "I'm usually the guy who doesn't like the new version and has to get used to it, but it's really a great car. It's where we need to go. … It's just time to step up."