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From Google NEWS ALERTS:

Wagoner: GM will move cautiously on production

By Jason Stein
Automotive News / January 10, 2005

Don't expect a glut of Saturn Skys or Pontiac Solstices on dealership lots in 2005 -- at least not because of overproduction.

And don't expect to see a load of additional vehicles off General Motors' Kappa architecture that will be used on the Solstice and Sky roadsters.

GM CEO Rick Wagoner said the automaker will use a cautious production plan for its new line of niche vehicles after seeing other halo vehicles sit on dealership lots.

"We are going to be pretty tough about how many we produce," Wagoner said Sunday. "We're going to be very disciplined about increasing production, because while it seems like we make decisions that don't look very smart, we do learn from them."

Wagoner said GM "probably overproduced" the Chevrolet SSR and Pontiac GTO in 2004.

Wagoner said GM will gauge the market more closely when it comes to niche vehicles in the immediate future. That includes new products from Pontiac and Saturn.

He added: "We should play those for what the market wants."
 

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GM’s first mistake may have been overproduction of the overpriced, underperforming SSR, and somewhat overpriced, under styled GTO. I hope their second mistake isn’t curtailing Solstice/Sky production to the point of creating availability problems, allowing dealers to gouge easier, and turning away potential buyers.

It is good that GM is willing to learn from its past. I just hope that they are not reading too much into sluggish sales of just a couple niche vehicles, which had problems that the Solstice/Sky do not appear to have.
 

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Fformula88 said:
I hope their second mistake isn’t curtailing Solstice/Sky production to the point of creating availability problems, allowing dealers to gouge easier, and turning away potential buyers.
Sounds like a hold-me-over might have been a pretty good idea if this limited supply thing pans out :cool , it will be tough to wait even longer for suplies to strengthen enough to make these affordable, even longer before BIG year end discounts are available, something I'll definately be trying to utilize (for any/every car in the future)

p.s. california real estate developers are holding back production for the same reason, and have you seen the prices here? It's the ol' laws of supply and demand
 

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My take is that this will keep the prices for these vehicles in the range that GM wants...

overproduction of the overpriced, underperforming SSR
As a SSR owner, I knew going in that I was buying a 'boulevard cruiser' NOT a 'vette, so to me it performs quite nicely. The price for the retractable hard top was worth every penny I paid - the SSR is not for the masses...
 

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I would imagine that they'd take all of the advanced orders and then tack on a certain percentage of that number for the total number they will produce in the first year. I will go from dealership to dealership until I find one who will take my order and who won't price gouge. That way I'll get exactly what I want without having to overpay.
 

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Here we go agian with "just in time delivery". Smart in principle, but if supply is short, prices go up and many otherwise ready to buy customers go else where, leaving GM shooting themselves in the foot. No doubt dealers are bitching about unsold SSRs and GTOs, but it's not rocket science to figure out why those cars didn't move. They're too expensive for what they are! GM marketing stratigists seem to think there are butt loads of loaded rich yuppies out there willing to plunk down big bucks on every GM retro/hotrod/fun car they come up with. People do want those cars, but we're not as rich and flighty as GM thinks we are. You don't accumulate cash without being able to distinguish "value" from "swindle".

They won't be doing the Solstice or Sky any favors by restricting supply and giving the dealers a green light to make "market corrections". Throw on top of that a waiting period for delivery and many will do as RODEO did and get a great deal on a Miata that they can drive home tonight. GM finaly got it right by building a fun car with value built in. People like bang for thier buck, not bucks for their bang. I really hope they don't screw up potentialy great sales just because they misjudged on the SSR and GTO. :banghead
 

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It all depends on what wagoneer deems as restricted numbers. if he means that there will only be combined total of 10,000 solsti and skys then we are in trouble. however if he means that there will be a combined 30,000 then we may just need to wait another month. I cannot blame wagoneer for being cautious, after being burned with the last two halo cars, I would also want to have people clamoring for the car rather than having a glut of them on the lots.
 

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As long as I get mine, I could care less how many they make. I would like to see the car be a success but if I have the only one in town, I can live with that too. I think they have a winner if they can keep the price down, but if they drive it up by not making enough it won't have the value it should have at $23K.
I own a 1988 Honda Magna which had been redesigned with very extreme styling for the time. It had upturned pipes and was long and low (and a four cylinder) direct from the factory. They sold just over none at the time. No one wanted them. Ten years later they had become collectors items and the demand was pretty high so they released an updated version. Again not too many sales. It is still a sportbike world even if they like the looks of the cruiser. I am very glad they made the Magna, but you just can't force extremes on the public. They want what everyone else has. But that bores me. I'm in for some top down, sun up driving excitement!
 

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the 'value' aspect of the solstice is one of it's most intriguing qualities. Bob Lutz made a point to draw a line at 20g because he saw 'affordable' as being core to his concept of a fun open roadster drawn from a clean sheet of paper. i hope the GM management shares his vision and communicates it to the dealers in order to keep the price gouging down.
the target of 20,000 solstice (solsti?) sounds like a limited production. the production is limited by the manufacturing methods- hydroforming and such- and if demand is high the temptation will be for dealers to inflate their margins at the expense of Bob Lutz's concept.
the 2004 GTO can be had for the low 20's in some markets now- would that be true if they came on the market at 27G instead of 34G? i don't think so. i think the GTO is a great concept... a true 'sleeper' with it's understated looks and big performance.... and the addition of nonfunctional hood scoops is like saying " i Know i got a pig, and i'm gonna slap some lipstick and see if it sells". what a shame. it's a great car, and if it were priced correctly from the start sales would not be an issue.
i think it is up to the GM management to exert some control on the dealers in this aspect, because dealers ( as they should) are looking only as far as the end of the month sales numbers. we need a far reaching vision, and a good corporate plan (listening Bob?) as a counterweight to the short term profit motive of the dealers.
 

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kwhopper said:
My take is that this will keep the prices for these vehicles in the range that GM wants...


As a SSR owner, I knew going in that I was buying a 'boulevard cruiser' NOT a 'vette, so to me it performs quite nicely. The price for the retractable hard top was worth every penny I paid - the SSR is not for the masses...
I hope you don't think I was trying to bash the SSR. I understand why its expensive, and that GM meant it as a fairly limited niche vehicle. I actually think its a cool vehicle and I am glad they produced it. Its just that I look at its sticker, and I look at a Corvette's sticker, and I can see why sales are slow. Its definately a looker, and I think the LS2 motor should give it a big boost in sales. Maybe GM just overestimated the market that is out there for such vehicles. The poor economy the last few years hasn't helped the more expensive niche vehicles either. Hope youkeep enjoying your SSR! You must get tons of looks in it!

As for Wagoners comments, as I expressed before they worry me. However, he likely means that GM is going to monitor dealer inventory more closely than they have for the SSR and GTO, and if they see excessive buildup of cars they will move quickly to scale back production before they end up with a 290 day supply!
 

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AeroDave said:
They won't be doing the Solstice or Sky any favors by restricting supply and giving the dealers a green light to make "market corrections". Throw on top of that a waiting period for delivery and many will do as RODEO did and get a great deal on a Miata that they can drive home tonight.
I'm honored!!!! :jester

You know, honestly, I'm having some trouble with things I'm seeing on the sostice (rubber roof stops, etc..), I'm worried it will be some time before year end discounts would be avaliale as I got on the hold-me-over MSM, the base model looks pretty base, the next gen miata is still on the horizon, and there is still no word on the ultra secret top and trunk.............

Glad I'm no longer hanging on for all this to work out, at least I can wait comfortably now with the new MSM, and decide when the time comes. Aerodave has it right, those MSM's are going to start grabing bargain hunters that don't want to wait. What a value :thumbs

RODEO
 

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Fformula88 said:
As for Wagoners comments, as I expressed before they worry me. However, he likely means that GM is going to monitor dealer inventory more closely than they have for the SSR and GTO, and if they see excessive buildup of cars they will move quickly to scale back production before they end up with a 290 day supply!
The good news is the Solstice is made and sold here, so keeping production in step with sales should be easier than the GTO. Since the GTO comes from Austrailia, they have to guess what dealer demand is going to be at least 6 weeks earlier than the Solstice to allow them time on the high seas. Add transit time to order processing and assembly time and you have to make your orders probably 4 to 5 months from the time it actually hits showroom. Solstice should knock at least 1.5 months off that and make it easier to respond to market demand.

Just a thought to try to cheer us up from some (IMO) ominus news.
 

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With only that quote to go on, I see it as Mr Wagoner is mixing apples with oranges. Yes, all four cars (SSR, GTO, Sky and Solstice) might be what some consider nitch or limited market vehicles, but the difference is the price. At $35,000, the GTO is competing against the $25,000 Mustang and F bodies it replaced. At $50,000, the market for the SSR was microscopic. But the market for silly, impratical but good looking cars at less than half the price of the SSR is a lot more than it appears GM thinks it will be. Ask yourself, if the Solstice was selling at the same price as the GTO or SSR, would any of us be excided about it's upcomming release? As Fforula88 pointed out, the Fiero was a huge seller its first year, far exceeding GM's hopes. Mr Wagoner says he hopes to learn from history. Maybe he's not looking back far enough.
 

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AeroDave said:
The good news is the Solstice is made and sold here, so keeping production in step with sales should be easier than the GTO. Since the GTO comes from Austrailia, they have to guess what dealer demand is going to be at least 6 weeks earlier than the Solstice to allow them time on the high seas. Add transit time to order processing and assembly time and you have to make your orders probably 4 to 5 months from the time it actually hits showroom. Solstice should knock at least 1.5 months off that and make it easier to respond to market demand.

Just a thought to try to cheer us up from some (IMO) ominus news.
The question is, what was their excuse for allowing a 290 day supply of SSR’s to pile up before they shut the factory down for a little while (5 weeks!). That is built here too like the Solstice will be.

Maybe GM corporate just never really paid close attention to those things, because it never really mattered how many $13K Cavaliers piled up on a lot. They just could throw a couple incentives at them and they’d disappear.
 

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Remember the PT cruiser, at first people were following the delivery trucks to the dealerships. Then Chrysler thought to themselves, "Wow! Everyone wants one of these, let's pump out 100 thousand of them asap!"

Next thing you know, there's one on every corner, and tons more sitting on the lots at big discounts.

Some exclusivity is good, but it's a fine line. Let's hope GM doesn't overcompensate for the GTO.
 

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WOW if he reads this thread he will probably change his mind, thats what a good sales manager will do, pay attention to his customers, otherwise he will fail miserably, keep it up Guys/Gals , show the OLD man you mean business. I sure hope HE is paying attention.:smash
 

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AztekzRpurty said:
Remember the PT cruiser, at first people were following the delivery trucks to the dealerships. Then Chrysler thought to themselves, "Wow! Everyone wants one of these, let's pump out 100 thousand of them asap!"

Next thing you know, there's one on every corner, and tons more sitting on the lots at big discounts.
That’s really bound to happen at one point or another no matter how you watch it. What really drives the demand for these cars initially is that people just have to have them because they are new and fresh. However, there really is no way to sustain that feeling. Once the car is a year or two old, people have seen it around, and although they may still want one, they will be more willing to wait.

The GTO and SSR are a little different, in that the great rush of buyers they expected never really showed up at the dealers like they did for PT Cruisers.

The real key is to produce as many as it takes to satisfy all those “have to have it” buyers who will pay sticker price, or close to it. Build too many, and then those buyers will start to pay less because there is too much supply. Build too few, and not everyone can buy so you don’t get their money. Its just economics, you want to meet demand with a close equal supply to maximize profit. GM’s problem, what will those figures be, because they overestimated their last 2 niche vehicles demand.
 

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Fformula88 said:
The question is, what was their excuse for allowing a 290 day supply of SSR’s to pile up before they shut the factory down for a little while (5 weeks!). That is built here too like the Solstice will be.

Maybe GM corporate just never really paid close attention to those things, because it never really mattered how many $13K Cavaliers piled up on a lot. They just could throw a couple incentives at them and they’d disappear.
Yeah, I don't know about the SSR, but I have a suspicion that they need to build a certain amount of cars just to make it worthwhile starting the assembly line up whether they are sold or not. Maybe that's the case with the SSR. It shares some parts, but has a lot of unique parts too, and maybe it's better for them to produce a sizable batch and hope they all sell ok, and if not discount them if they have to, rather than start and stop for little batches. Don't really know, but I can say that they just misjudged how many people were out there that would pay that much for it.

I was very interested in the SSR until I discovered it's price tag. I still like the car, but I'm not going to pay that much for it!! Luckily the Solstice came along, and with any luck GM will stick to 20k and somehow keep the dealers in line with that price. Would go along way to building some GM carma.
 

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AeroDave said:
Here we go agian with "just in time delivery". Smart in principle, but if supply is short, prices go up and many otherwise ready to buy customers go else where, leaving GM shooting themselves in the foot.
They won't be doing the Solstice or Sky any favors by restricting supply and giving the dealers a green light to make "market corrections". . :banghead
Production capacity costs money. You only want to capacitize for what you think you can sell on a steady-state basis.
 

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bigd said:
Production capacity costs money. You only want to capacitize for what you think you can sell on a steady-state basis.
So true. GM had said that they were shooting for 20k units on the Solstice per year. Now they are saying they are going to be very careful about over producing. The two are not mutualy exclusive to be sure, and they very well may keep production scheduals up to meet the 20k mark, but my concern is, if they try a "just in time" stratagy they won't keep up with demand, prices on the lot will go up, and impatient fickle buyers will go elsewhere. Remember the day when you could go to a parts counter, and they always had the part you needed? These days my experience is, "We'll have to order that, it'll take 1 to 2 weeks". Many buyers want to go to the dealer, pick out a car, and drive it home. If they can't do that at Pontiac, chances are they will walk across the street to Mazda.

When they make an annoucement like that, dealers are going to read "limited supply" and start marking cars up and telling buyers "You're lucky to get this one, doubt we'll be able to get more this year", when in fact there could be plenty. I don't really know if Wagoner was making these comments with the 20k number in mind or not. I'm only expressing concerns, because his comments sound like "just in time" to me, and my experience has shown that to be good for companies sometimes, but almost never consumers.

Alot of internet companies try to do business this way. They promise you "in stock" and immediate delivery, but what they really do is put in an order with the manufacturer or distributor, and hope they really do have it. They in turn only try to produce enough for the orders they have and keep inventory low, so the net result is delay to the customer if there is better than average demand. This stratagy works ok for a captive audience, like those needing special parts for their car, but in the case of a product where the consumer has options, it can be a real set back. We're American, we like instant and don't want wait. If forced with a wait and price hike, we'll find an alternative.
 
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