This Week in Car Buying: Jeep Wrangler inventories, sales up; Chevy Blazer’s siblings; Tesla covers tax break loss; Gas prices drop
The popularity of the redesigned Jeep Wrangler may be hitting its peak, as inventories for the JL model have risen to a 135 days’ supply according to Automotive News. While stocks have risen, sales are up as well, though the trade paper notes that Fiat Chrysler Automobiles have increased fleet volume of the popular off-road vehicle.
The report said the current inventories, which hit a high in October of 156 days, are nearly three times the traditional levels that dealers carried of the previous generation JK Wrangler. Still, Jeep managed to sell nearly 30,000 of the new models in April, a monthly high for the nameplate, though since then, the vehicle has cooled off some from those record levels. Through November, Jeep has sold 220,232 units this year.
While fleet sales may be keeping overall numbers up by nearly tripling to 11.7 percent of the sales mix, some dealers are complaining that the rising MSRP of the Wrangler may be contributing to the retail slowdown and the rising stocks. Pricing on the 2-door model jumped nearly $4,000 from the JK to the JL Wrangler, while 4-door Wrangler Unlimited models increased by just over $3,500. The most expensive model is the 2019 Wrangler Unlimited Moab model which starts at $51,300 plus $1,495 delivery. Jeep has offered few incentives on the Wrangler and while the prices have gone up, so has resale values. Kelley Blue Book estimates that the vehicle will retain 54.1 percent of its original price after 5 years of ownership, which last year was the fourth highest in the industry.
Jeep shows no signs of backing off production, scheduling work to resume this week at the Toledo, Ohio assembly plant, during a time when many plants are closed for the holidays. In addition, Jeep is ramping up production of its new 2019 Jeep Gladiator pickup, which is slated to go on sale next summer. With that new vehicle coming and increasing inventories, Wrangler incentives could very well bump up over the coming months.
Chevy Blazer’s siblings
The announcement of the 2019 Chevrolet Blazer is proof that the midsize 2-row crossover SUV segment is heating up as both Honda and Volkswagen are set to respond with their respective Passport and Atlas Cross Sport models. All will be gunning for vehicles like the facelifted 2019 Ford Edge and 2019 Nissan Murano. The Blazer may get some company from some of its sister divisions.
Word is out that GM has dusted-off GMC’s old Envoy nameplate and rumors having it affixed to a that division’s version of the Blazer. Other speculation has it being used on a Buick model positioned between the Envision and Enclave, which would fit in with the En- nomenclature. A further wrinkle was added when Buick has also trademarked Enspire, which was used on a crossover concept presented for the Chinese market that featured an electric drivetrain and Cadillac’s SuperCruise semi-autonomous driving system. In any event, look for GM to add to its roster of crossovers by 2020 with one or possibly two new 2-row models.
Tesla to cover tax break loss
Having passed the 200,000-unit threshold, Tesla is facing a 50-percent cut in its $7,500 federal tax credit come January. It’s no secret that the incentive is has helped fueled the EV auto maker’s success. Now Elon Musk is reported as saying that the company will cover any shortfall in the credit for buyers who had placed orders by Oct. 15 but haven’t received their vehicles by Jan. 1 when the credit drops to $3,750.
Responding to Twitter question of what would happen if the car isn’t delivered in time to be eligible for the full tax credit, Musk replied that “If Tesla committed delivery and customer made good faith efforts to receive before year end, Tesla will cover the tax credit difference.”
The tax credit will continue to be cut in half every six months until it is phased out entirely. New legislation on renewing the credits has yet to be considered.
Gas prices drop
If manufacturers are counting on declining gas prices to keep crossover SUV and truck sales strong they have reason to celebrate the new year as record U.S. oil output, which also in November resulted in the country being a net exporter of oil for the first time in decades, is pushing down the per gallon cost. In some places, regular unleaded can be found for less than $2 per gallon.
Nationally, the price of regular unleaded has dropped from $2.67 per gallon in the first week of November to just $2.41 per gallon at the end of December, according to data compiled by the U.S. National Energy Information Administration. The Gulf States have the lowest average price for regular at $2 per gallon, while the West Coast continues to be the highest, averaging $2.93 per gallon. Still, that figure is down substantially from $3.30 per gallon in early November.
The average price of diesel fuel has dropped nationally to $3.07 per gallon from $3.33 per gallon in early November. California continues to have the highest price for diesel at $3.83 per gallon on average. Stable fuel prices are cited as one of the reasons the truck share of the new vehicle market stands at an all-time high of more than 71 percent of the market.
As truck popularity hits new highs, the timing is right for Kelley Blue Book’s 2019 Full-Size Pickup Truck Comparison Test. We pit the Ford F-150, Chevrolet Silverado and Ram 1500 against each other.
While trucks are soaring, car sales are down significantly. Are they over as a vehicle type? A Cox Automotive Car Study says there’re plenty of life left in midsize and compact cars.
After more than 20 years out of the market, the Land Rover Defender is expected to return to the U.S. in 2020. The British SUV maker will release more details on the vehicle during 2019.
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