American Honda is benefiting from positive reviews and word of mouth about its new Civic, as well as continued incremental sales of its Ridgeline midsize pickup. General Motors is also showing signs of life, as it out performed the industry for the first time in many months. |
Both Toyota and Honda have about the shortest turnaround times between model changes than anyone else in the industry. They replace a model now every five years or so. |
Brands want to be in this segment because if the brand can sell a compact car to a young customer, the nameplate can then potentially keep that customer for life, |
Brands want to be in this segment because if the brand can sell a compact car to a young customer, the nameplate can then potentially keep that customer for life. |
But I find this a major move because it says they need something besides value pricing. |
but the price of gas also has a huge impact on the mix of cars and trucks that are sold. |
Competitive forces are definitely forcing manufacturers to reduce their product design cycles between changes. |
Even with the lower net pricing, the transaction price is creeping up in the broad sense. There is movement (by buyers) from one segment to another. And the brands have added new models, and those new models are priced in the upper range of the brand. |
For there to be a major shift in the industry, prices have to go well above $3 a gallon and remain there consistently. If you do the math it's still going to take many, many years to recoup your extra price through gas savings. |
Ford has had a gap for a long time between its Focus and its Five Hundred. Now ... it's apparently hit the sweet spot. It also helps that the Fusion has gotten extremely positive reviews in the automotive press. |
General Motors is showing signs of life. |
go over $3 and close to $4 and stay at that level for at least a year. |
I think incentives are very much an integral part of the industry. It's a very sophisticated pricing tool. The Asians are clearly much more into the incentives game this year. |
If they were to switch back to incentives, frankly, it would undermine everything they've done. |
It is definitely a warning signal. |