After Mustang SUV, calls for Corvette SUV grow
An electric Mustang SUV will hit dealerships late next year. When will Corvette follow suit?
The positively received debut of Ford's battery-powered Mustang Mach-E in Los Angeles last month (with the automaker hinting that it could develop a full Mustang sub-brand) has turned up the heat on Chevrolet to expand its Corvette lineup as well.
Morgan Stanley analyst Adam Jonas has added his name to a chorus of voices calling for General Motors to create a Corvette sub-brand making SUVs. He estimates the sub-brand could be worth $7 billion to $12 billion, and says a battery-powered, Corvette-badged vehicle would help GM convince customers that electric vehicles are a desirable performance option.
Just this year, ex-GM vice chairman of product development Bob Lutz as well as Car and Driver magazine urged GM to create a Corvette sub-brand. Their case builds on a Detroit News story that went viral two years ago.
In answer to repeated News inquiries as the whether GM has studied the idea, company executives and spokespeople have said “We do not comment on future product.” Intriguingly, however, when GM CEO Mary Barra was queried on the topic by Morgan Stanley’s Jonas in a quarterly earnings call last month, she replied: “Well, I appreciate that you think our Corvette franchise is very strong. I’m not going to talk about the future.”
Porsche was the first sports car brand to translate its DNA to sport utility vehicles. The Cayenne SUV was controversial when it rolled out 16 years ago, especially among Porsche faithful. But the move has been a huge hit. Today Porsche SUVs are the brand’s best sellers, and analysts estimate Porsche is responsible for one-third of Volkswagen Group's profits.
Nearly every other performance brand has followed suit, including Lamborghini, Jaguar, Alfa Romeo and Ferrari. Aston Martin was the most recent sports-car brand to enter the fray when it unveiled the DBX crossover last month in Los Angeles.
But Mustang is different in that it has been a performance badge in the Ford stable since its introduction as an affordable sports coupe in 1965. Nevertheless, Ford hints that it could expand a Mustang sub-brand.
"There's a lot of emotion with the Mustang, and it's time to progress that and make it spread wider," Ford Europe design boss Murat Gueler said in an interview with British magazine Autocar. "We've talked about building a family.”
Morgan Stanley’s Jonas envisions a similar future for Chevy’s Corvette sub-brand.
“The Ford Mustang Mach-E unveil stands as a clear precedent with relevance to Corvette,” Jonas wrote in a comprehensive case study. “The Mach-E extends the Mustang brand into an all-new powertrain, segment and consumer base.”
Former GM vice chair Lutz told the News in 2017 that “Corvette is a powerful brand that should be developed. Go upmarket with a mid-engine sedan (or) something like Cayenne. They would split it off from Chevrolet — nobody makes that connection anyway.”
Lutz expanded on those statements this summer in an interview with Automotive News: “If I were there, what I would do is develop a dedicated architecture, super-lightweight, super-powerful, Porsche Cayenne-like, only much better and a little bigger, medium-volume Corvette SUV.”
Auto enthusiast publication Car and Driver followed up with a rendering of a front-engine Corvette SUV with a hood scoop, coupe-like roof, and entry price of about $70,000. “We also think it's a no-brainer for Chevy to expand the Corvette brand beyond just the titular model,” wrote the influential publication.
Current Mustang headlines aside, Corvette has long been Porsche’s rival, offering 911-like performance at a more affordable price. Jonas sees Porsche as the primary model for a Corvette sub-brand.
“While the risk of brand dilution has always existed, Porsche has managed this delicate relationship of scarcity vs. volume growth particularly well, which has been reflected in financials,” he wrote. “Today Porsche sells across a variety of segments.”
Just two years after Porsche launched the Cayenne in 2003, the mid-size SUV represented 28% of brand volume – a number that has ballooned to 50% today with the introduction of a second crossover, the Macan.
Jonas sees a Corvette SUV — along with increased demand for its first-ever mid-engine C8 sports car — leading to an increase in Corvette volume to 85,000 units by 2025 with a bullish market valuation of $12 billion.
Retired GM engineer Tom Wallace ran the Corvette program from 2006-2008 and says the company closely tracks rivals’ development.
“When I was Corvette chief, we often studied the Porsche business model and product line-up, and were generally impressed,” he told The News. “The fact that they have done the Cayenne and stuck with it is a vote of confidence that such a vehicle can be a success.”
Industry experts say the challenges to expanding Corvette’s offerings beyond a single model are many, including a fear that a Corvette SUV would cannibalize sales from Cadillac.
A Corvette SUV would require a different platform than the mid-engine C8 — at substantial cost.
“To be successful, this vehicle would require an all-new RWD/AWD architecture, which currently does not exist,” Lutz told The News. “That’s high investment for relatively low volume.”
That has led to speculation that the Corvette could share GM’s “skateboard” electric-vehicle platform currently being developed for Cadillac beginning in 2021. GM has promised an all-EV future with Cadillac its flag-bearer, but Jonas sees an opening for Corvette.
“Electric Corvette would ... help to convince customers that EVs are desirable from a point of view of speed, range and performance,” he writes. “We see room for Corvette to be a part of GM’s EV strategy and complement the existing gap of models across Cadillac and select Chevrolet models currently.”
With the Mustang Mach-E coming next year, and the electric Porsche Taycan sedan already being shipped, GM will surely be watching closely.
Henry Payne is auto critic for The Detroit News. Find him at firstname.lastname@example.org or Twitter @HenryEPayne.