This is geared more toward the folks that are (or may have been) involved with product development for an auto company.

With a new model (basically, a 5th gen Camaro is a new model from the ground up, just recycling the name), what kind of production/sales numbers would be required to make a new line profitable.

My point is, after you consider the substantial investment made by a company in the design, development, production and marketing of a new model, what is a general measure of success (and how long SHOULD it normally take)?

I would GUESS that it would take a couple of years of production to actually recoup thier initial out-lay. That is why I always thought the MOCOs waited a couple of years before coming out with nicer packages like the convertables, high perf packages and tricked-out versions- ensuring they have made back the investment and proven the sustainability of the model.

Am I off base with those assumptions?

Just curious what type of figures GM would be looking at for production numbers for a 5th gen.....

Allen

 

ahhhhhhhhh..........THAT'S the burning question.......and it's kinda like asking "is it going to rain/snow three weeks from next Tuesday?"

There are so many variables......................

 

What's a realistic (and sustainable) annual sales number you would like to see between the 2010-2014MY?

 

Thats sort of what I figured. I can only imagine (well, actually I can't) what the capitol investment it takes for an entire new model.

What about the thought behind the wait-and-see aproach in reference to the goodie packages? I mean how long would a compnay, in effect, expect operate in the red on a new model on average? I know this seems like a very basic (ie dumb) question, but new buisnesses many times operate for years before they become profitable, but is there is a good rule of thumb with the auto industry and new models? That would (to me) be a good indicator of how long we would have to wait to see a move toward more exotic (power/performance) packages.

Just curious.....

Allen

 

Variables. Like:

How much did it cost to make it?
How much carry over parts does it have?
How much in cost cuts did you get out of outside suppliers?
How many man hours does it take to put it together?
How many people does it take to put it together?
How efficient is the factory it's being made in?
Is it able to be made on the same assembly line as another vehicle?

That's just the list from an outsider.

If you want a more basic idea, Monte Carlo sells around 48-65K cars per year, is made off of the "W" car structure, and shares the assembly line with a Chevrolet Impala that sells around 200K per year.

Even Mustang shares it's assembly plant with Mazda now.

 

Also including business end variables like:

How competitive is that market niche? Will there be lots of pricing pressure?
What is the demand of the segment?
What is the expected lifetime of the vehicle? segment?
What is the expected warranty cost?
What is the expected marketing cost? (Impala = High, Corvette = Low)
Complexity. How many models and trim levels are required?
Exchange rates

 

Nobody is going to give this information out...classified stuff...although there is probably a lot of speculation and educated guesses floating around...

 

My opinion, and the value of that is up for debate, is that GM should concentrate on generating profit on the 5th gen on volume, not on per unit margin. It will take longer to recoup their initial investment, but I would imagine the pay off in the long run would be far greater than simply recouping costs as quickly as possible. The more bums are in F-Bodies, the more GM will sell OTHER vehicles. The same is true about any GM vehicle really, but the F-Body will be in a whole 'nother league than say a Cobalt or G6 as far as re-establishing a potent image goes.

Case in point, Microsoft only recently broke even on the X-box. It took them this long to finally recoup the costs of releasing a gaming console, and they've really taken the industry by storm. Now because more people have been exposed to Xbox, and how much more capable it is than the PS2 was, they've generated a whole legion of die hards.