GM Inside News is reporting that the Solstice replacement scheduled to appear around 2011 is no longer being developed. The article states that GM loses $10,000 on each Kappa sold. I do not remember ever hearing that before and am very skeptical on that. Does anyone have any information on whether that is true or not? Anyway, here is the article:
GMI Exclusive: Kappa II Platform Axed From R&D - GM Inside News Forum
It is no secret by now that General Motors has been shaking up its product programs left and right. We first heard of the slashing of the Buick Zeta car, apparent death of the Cadillac Zeta car, and the impending death of a couple GMC product programs. Now GMI is hearing that the Kappa II program, successor to the current lineup of Kappa roadsters, has been pulled from the product plans. The reasons for all of these changes are obvious; uncertain gas prices, an uneasy economy, poor financial situation within the company and an overall product shake up are just a few reasons.
The Kappa line of products makes the "cut" bill rather easily. GMI has been told that when the Pontiac Solstice and Saturn Sky came to the market, GM was losing around $10,000 per unit built. Needless to say, that is not a money-making product line by any stretch of the imagination. It is not entirely surprising that Kappa has been a money pit of a product program. From the ground up Kappa cars are costly; starting with the frame no less. The Kappa architecture is hydra-formed as part of the fabrication process to achieve the dimensions and frame rails needed. Many of the body panels (namely the hood, deck-lid, and fenders) are hydra-formed as well. Hydra-forming is a costly fabrication method, particularly for vehicles that have such low starting prices and low volume to boot. Add on the fact that the Kappa vehicles are largely “hand built” cars (at least by today’s standards); it becomes quite evident why GM will likely never get a return on investment with the Kappa products.
There has been speculation throughout the last year that Kappa II would be a more usable platform, supposedly loosely based off of the quite-mainstream Zeta that underpins the new Camaro. Speculation has also arisen in recent years that the next-generation Kappa products would [have been] built at GM’s new plant in Mexico to help offset the staggering loss it has taken with Kappa. Apparently such plans have been scrapped as market conditions have since changed and Kappa II is off the table
What this obviously means is that the Pontiac Solstice, Saturn Sky, Daewoo SX2 and Opel GT roadsters are “once and done” products. All of these vehicles were introduced as “image cars” for their respective brands, which is how GM justified the losses on them. Possibly one generation of the Kappa’s was enough to boost their respective brand’s image?
As always, we want to add that product plans, particularly in today’s world at GM, change constantly. As of late last week though, the Kappa II program was shelved. That does not mean that GM may not open it up tomorrow, next month or a year from now. However, we suspect that unless the financial situation at GM changes dramatically soon, the Kappa II program will likely maintain its “shelved” status.
