|By: Tim Plouff|
On Monday March 30th, 2020, U.S. Crude-oil prices cratered to a 19-year low, barely reaching $20 @ barrel. Suffering from the one-two punch of a global pandemic outbreak plus an ill-advised battle over market share gallons between Saudi Arabia, Russia, and the USA, the world economy now teeters on depression.
Normally, low oil prices are an economic dream, especially for the automobile industry. Tires are less expensive, interior components cost less to make, even electrical harnesses and engine parts utilizing the latest composites are easier to buy. And buyers will pay less for the fuel for their cars.
Yet the pandemic has waylaid hundreds of thousands of auto-workers, closed dozens of assembly plants and hundreds of parts suppliers essential to the industry, as well as victimizing multitudes of other ancillary industries that derive their livelihood from the venerable automobile.
These factors are also having a crushing impact on new models slated to debut now, and in the coming months. Especially the lifestyle cars and trucks that rely on lots of disposable income—the kind of consumer confidence that existed on March 1st, but not on May 1st.
Sports cars like Chevy’s all-new mid-engined Corvette, BMW’s new Z4, and Toyota’s Supra is each considered a non-essential (how hurtful is that label nowadays?) vehicle, a car that consumers frequently lust for, but can only purchase when their personal economics are solid. You don’t make a down payment on a new Corvette, when your job disappears in a government-sanctioned stay-in-place order, or your 401-K is sliced in half.
The 2020 Corvette’s much anticipated debut occurred last July, with production slated for late in 2019. Some early models slipped out of the Bowling Green, Kentucky assembly plant (a very worthwhile side-trip if you are ever in Nashville) just after GM’s extended fall labor strike. But then the virus economics shattered production plans, again, for the $60,000 speedster.
The North American Car of the Year has barely reached consumer hands, as a loyal enthusiast public whipped into consumption mode by fawning reviews and robust performance stats, must now consider survival first and foremost. Indeed, Chevrolet’s vast dealer network was struggling to decide how to handle 45,000 pre-orders for the first year of the re-designed wunder-car—a production number that exceeded projections and closely matched the Corvette’s best sales years in the late 1970’s when the sporty two-seater car was a performance symbol, but not a performance car. How many of those drivers will be able to take the plunge now?
How many Supra and Z4 buyers will step up, too?
These sports cars are halo vehicles for the automakers, but since the 2008-2009 recession, their sales numbers have struggled to reach previous heights. Sports sedans and more versatile sporty crossovers have syphoned some buyers, perhaps pickup trucks too, but each of these sports cars create market enthusiasm, brand enthusiasm, as well as outsized profit margins—usually. Management deems these products essential, right up to the point that they are not.
In 1983, Chevrolet didn’t have a Corvette for that model year, as a new C4 model was set to debut as a 1984-model. If the Covid-19 pandemic, and the stay-in-place dynamics, continue for one, two, three more months, will Chevrolet move to 2021 versions of the new Stingray? Will Nissan’s anticipated 400Z launch this year or even see the light of day, to compete with the Supra and Z4?
Marketers and product planners will state now that surely their new sports cars will come to fruition so our dreams as buyers will be realized. Yet these are uncharted waters, trails forward that not even Lewis & Clark would confidently pursue.
It would be beyond tragic that Zora Arkus-Duntov’s long-dreamed about mid-engined Corvette would finally become reality, and then disappear due to factors beyond anyone’s imagination.