About a month ago, TTAC’s Steve Lang hipped readers to the fact that used car prices had grown like crazy, and that the time to sell that old car had come. Now the mainstream media is starting to wake up and smell the 30-weight, and the wires are flooding in with stories of used car prices gone wild. The LAT reports that Kelley Blue Book values have risen an average of 16% per year in the 2008-2011 period. Autotrader saw 13 of their top-20 CPO models add at least a grand to their prices in the last month alone. And Bloomberg reports that 2011 BMW Dreiers and M3s now cost only $34 per month more than year-old models, and that new Corvettes can actually be had for $12 per month less than year-old models according to Edmunds.com data. Considering an Acura TL? New models are typically $18 less per month than year-old versions. So what’s going on?
New lease sales fell to 1.96 million in 2008 and 1.13 million in 2009, according to Manheim. Lease originations that averaged 2.78 million during the previous 10 years dried up as lenders such as GMAC Inc. and Chrysler Financial Corp. withdrew financing offers.
Leased vehicles’ input to used-vehicle supply will be 2.08 million units this year, a 40 percent drop from 2002 levels, according to Manheim. Off-lease volumes will keep declining through at least next year, to 1.53 million, Manheim says.
Sales to rental fleets, which fell to 1.13 million vehicles in 2009 from more than 2 million in 2006, may not exceed 1.5 million until after this year, according to Manheim. The 2011 contribution to used-vehicle supply from rental fleets will be about 1.4 million vehicles, a 30 percent drop from 2005 levels.
But here’s the real question: how long can this last?
GM has announced details for the 2012 Model Year Chevrolet Volt, and for the second year of production The General is already addressing the Volt’s most controversial feature: its high price. The base MSRP for the Volt will drop from $41,000 to $39,995 for the 2012 year of production, an accomplishment that GM explains
is possible in part because of a wider range of options and configurations that come with the expansion of Volt production for sale nationally.
Wider range of options and configurations? According to the Detroit News, this means navigation and a Bose speakers are no longer standard features on the base-price Volt, but that seven options configurations are now available compared to the 2011’s three. And, on the other end of the pricing equation, the Volt’s fully-loaded price has increased to $46,265 from the $44,278 that Chevy’s configurator tops out at for a loaded 2011. Keyless access with passive locking is the only new standard feature for 2012. With more choices and a slightly lower price of entry, GM is clearly trying to move the Volt away from the “novelty” image that CEO Dan Akerson referenced earlier this week, as it ramps up Volt production for 60,000 units next year. But until the Volt’s price starts dropping without simply offering a less-contented version, the road to mass sales will continue to be a tough one.
Electric car makers like to make a big fuss about how their clean-green automobiles are going to “change the industry.” Sometimes those instincts lead to hubris and overreach (ahem, Tesla), while other times the changes make you long for the relative simplicity of the new car dealer fandango we all go through to buy “regular cars.” In the case of Think, the business innovations (namely the innovation of relying on accumulating local tax credits to get the price to seem as low as possible) are enough to make the world of dealer markups and delivery charges seem downright quaint and homey. And that’s not the way to change this business…
Mitsubishi has announced the 3rd major-OEM plug-in vehicle for the US market (available in November), and it’s taken the opportunity to bring down the price of entry for (barely) freeway-capable EVs. With 66 HP and 145 lb-ft of torque, the Mitsubishi i will take you to “approximately 80 MPH” for the low, low price of $27,990 before a $7,500 federal tax break. For $29,990, Mitsu will sell you an SE version, with an upgraded interior, premium sound system, and more. At those prices, the Mitsubishi i costs thousands less than the $32,780 base-MSRP Nissan Leaf, the previous budget EV king. But the i is only rated at 85 miles of range per charge based on the same test that said the Leaf would get 100 miles per charge, and the Leaf’s ultimate EPA rating is 73 miles so expect less from the i. But hey, it’s the first pure EV crash-tested by NCAP (it got four stars, thankyouverymuch), and its cheap. You get what you pay for…
Reuters reports that auto market research firm CNW Research is projecting April transaction prices to be the highest in 15 years, when measured as a percentage of MSRP. According to the report, early April sales show average transaction prices hitting 87% of MSRP, the highest such level since 1996. By comparison, transaction prices were running at around 77% of MSRP during the industry’s down year of 2009. Looser credit (subprime sales are up 92% from last year), tsunami-related production delays and lower supplies of used cars, particularly small cars, are all given credit for contributing to the rising prices, although bailout-era capacity reductions clearly set the stage for this comeback. And with tsunami-related interruptions still working themselves through the system, demand could push prices higher still. But, says CNW principal Art Spinella, don’t look for the manufacturers to reap all of the rewards of rising transaction prices.
Dealers are the primary beneficiary of these dwindling discounts since they are using fewer of their own dollars to close a deal than was necessary just a few years ago
Prices for the Saab 9-5 SportCombi have leaked in Sweden, and according to Autobild, the wagon version actually costs €114 less than the sedan. Whether they’ll make the same offer outside of Sweden isn’t clear… but then neither is anything about Saab’s future. And instead of haranguing the poor Swedes about the questionable financial sense of this decision, let’s just agree that desperate times call for desperate measures. If nothing else, Saab’s wagon-centive sets it apart from the industry’s business-as-usual.
Toyota reports [PDF] that it has increased its MSRPs by an average of 1.7%, as the automaker seeks to regain control over pricing which has taken a hit in the year since its recall scandal. Of course, the fact that the firm’s supply of vehicles is likely to be limited by the chaotic aftermath of the Japanese earthquake and tsunami was causing its transaction prices to rise anyway, but Toyota tells Automobile magazine that the MSRP increase
has no relation to any production shut downs or shortages stemming from the recent disaster in Japan
The economics of EVs simply don’t work. On the 500 that (Chrysler) will begin selling in the U.S. next year, we will lose over $10,000 (per unit) despite the retail price being three times higher [than the gas version].
Like, Zoinks! I spent some time in a Cinquecento last weekend, and though it made a great little LeMons pace car and is honestly quite fun to drive, it’s not much car for the $15k-$19k+ Chrysler wants for a 100 HP version. Spending three times that amount for a money-losing electric version simply boggles the mind. Or do they celebrate April Fools Day in Italy?
When Chevrolet announced a few months ago that its new Cruze compact sedan would start at $16,995, more than a few people (who likely had not had a chance to personally experience the new car) were shocked. The Cobalt, which the Cruze replaced, had been priced nearly $1,300 lower—and had required incentives to sell at that price. Now Ford has announced pricing for the totally redesigned 2012 Focus, and it starts at…$16,995. (Read More…)
Tesla has made much of the fact that its next model, the Model S sports sedan, will be half the price of its $110k Roadster and be built in far greater volume… but it turns out that both of these goals are going to take just a little bit longer than Tesla thought. Though the Model S will be offered at a base price of $57,400 with a 160 mile range, that version won’t be built until after the firm produces its first 1,000 units. Those first thousand models of the 5,000 unit 2012 production run will be loaded “Signature Series” models that will cost at least $77,400 (the base price for all Model S versions with 300 miles of range). According to Tesla, versions with a 230 mile range will start at around $67,400.
And with 20k units of production planned for 2013, Tesla had better not run into any delays as it won’t build its firs “production intent” (known internally as “Beta”) models until late this year. That gives the firm only about 6 months to validate the production-intent version, tool up and build the thing for its mid-2012 launch. And with a first run of expensive, loaded models planned, customers will definitely expect the kinks to have been worked out. This is going to be interesting…
GM raised a few eyebrows when it priced its new Cruze compact at or above the base price of its closest competitors, marking a shift upwards in its pricing strategy. But with loaded LTZ versions of the Cruze crossing the $24k mark, one obvious concern was cannibalization of the forthcoming Buick version of the Cruze, the Verano. GM has yet to officially announce pricing for the Verano, but an online survey of Buick dealers has leaked to GM Inside News, showing that GM is eying a price range of $21k-$26k for the new Verano, a price point that certainly overlaps with the higher-trim Cruze models. And with the 2.4 liter four-banger from the Regal tipped as the Verano’s base engine, the case for the similarly-engined (and not all that much larger) Regal is made a little less convincing by the addition of the new compact Buick. Hit the jump for GM’s proposed trim levels.
Chrysler has announced that the 2011 Fiat 500 1.4 Pop will start at a base price of $15,500 (before destination) with Sport models starting at $17,500 and Lounge versions starting at $19,500. All models are powered by Fiat’s 1.4 liter MultiAir engine, making 101 HP and 97 lb-ft of torque… and luckily the little engine has only 2,400 lbs to move. The base model gets 15″ steelies, cloth and a CD player, while the Sport model adds 16″ alloys, remote keyless entry, cloth/vinyl sport seats and steering wheel, sport suspension and a lightly modified exterior. The range-topping Lounge trim gets 15″ alloys, a Bose stereo, the Microsoft-based “Blue&Me” hands-free media system, premium cloth seats, a glass roof, body-color side moldings and chrome accents as well as a standard automatic transmission and automatic climate-control. Check out the three versions at Fiat USA’s new site… and hit the jump for Fiat’s just-announced list of US-market dealers.
Dodge’s re-boot of its product lineup is largely complete, and with new and refreshed vehicles heading to dealerships soon, it’s released pricing on its new lineup. Dodge’s new pricing list can be found here, or hit the jump for highlights.
Notice a difference between these two pictures? No, not the fact that one is a sexy press shot and the other is a bush-league amateur snap. Both pictures show the 2011 Volkswagen Jetta, but one of them has a torsion beam rear axle, the other has a variation of the Golf’s multilink setup. One has a 2.5 liter blunt instrument of an engine and a slushbox, the other has a high-tech “twincharger” engine that won the International Engine Of The Year award two years running, mated to a dual-clutch ‘box. One has a nasty, plasticky interior, the other offers “higher quality materials and trim.” By now you’ve probably guessed that the less desirable of these two Jettas is the US version, and the fancy-pants version has just been announced for the European market… (Read More…)
When Honda first launched its current Insight hybrid, it was the cheapest hybrid on the Japanese market, and it quickly became the best-selling car in the country. Then everyone realized that the Prius was infinitely better for not much more cash, and the Insight dropped off. Now, Honda is trying to recapture its budget-hybrid mojo by releasing the car it probably should have made instead of the Insight: the Fit Hybrid. And they’ve priced the 1.3 liter IMA hybrid Fit at just $19,310 (1.59 million Yen), according to Automotive News [sub]. But this time, Honda’s not trying to take on the Prius directly. Says Honda CEO Takanobu Ito
They are totally different cars. Their price ranges are different and they look different. So I don’t consider the Prius as the Fit’s direct competitor. We just want many more people to own the Fit by expanding our line-up.
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