GM to limit production of Solstice, G6 convertible in effort to strengthen residuals, avoid incentives.
Laura Clark Geist – Automotive News - Jun 12, 2006
GRAND BLANC, Mich. - Pontiac will limit production of the Solstice and new G6 convertible to strengthen their residual values and avoid offering incentives, officials say.
"That's part of the positioning - to keep the car where people want it," John Larson, Buick-Pontiac-GMC general manager, said at a press event here last week.
The Solstice roadster debuted during the 2006 model year. It has a backlog of 6,000 sold orders, Larson told Automotive News. A G6 convertible typically stays on a dealership lot for five days before it sells, he said.
General Motors has said it plans to build 17,000 Solstices for the 2006 model year and produce 20,000 Solstice and high-performance Solstice GXP units in the 2007 model year. As of June 1, the Solstice had 1,500 units in inventory and a 21-day supply.
GM Vice Chairman Bob Lutz said last month that potential demand for the Solstice is as high as 35,000 units a year. Lutz said GM may boost production at its assembly plant in Wilmington, Del., which builds the Solstice, Saturn Sky and Opel GT.
But Pontiac spokesman Jim Hopson said production would increase only if sales of the roadsters are sustained.
Raj Sundaram, president of Automotive Lease Guide, said the Solstice's residual value is one of Pontiac's highest in a "very long period." Sundaram's company, which sets residual values for the industry, predicts the base-model Solstice will hold 54 percent of its sticker price after three years.
A residual value of more than 50 percent is considered outstanding.
"When you're one vehicle short, there's no question it's going to help residual values," Sundaram said.
The G6 GT convertible has a three-year residual value of 45 percent, he said.
Dennis Maraone, Pontiac's product director, said GM plans to build about 15,000 G6 convertibles a year at its assembly plant in Orion Township, Mich.
Said Maraone: "We want to maintain the integrity of the vehicle and make sure that it's always in high demand."
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