This Week in Car Buying: Average prices continue to climb; Lexus' no-haggle pricing; Infiniti's tablets; Buick cuts Regal MSRP
While new car average transaction prices have hit a plateau month-over-month, July's ATP is actually up 2.6-percent from a year earlier hitting $33,453, a gain of $856. Nissan is the big winner in increasing margins. Its average prices grew by nearly 6 percent, largely on the strength of its crossover Rogue and Murano models as well as the launch of the all-new Maxima.
"Transaction prices continue to climb across the industry, with some notable gains from small and medium volume brands like Fiat, Kia, Mazda and Subaru," said Karl Brauer, a Kelley Blue Book senior analyst. "Full-size trucks continued to have another big month, growing nearly 65 percent and achieving a $45,735 average transaction price. The volume and profit these vehicles are delivering can't be overstated, and both figures could be even higher when Ford fully leverages the new F-150's production capacity in the coming months."
Helping the smaller brands see higher ATPs are new model launches like the 2016 Fiat 500X and the 2016 Mazda Miata, while Kia benefits from a new Sorento and Subaru remains one of the hottest brands in the industry. The segments seeing actual declines in average prices include compact cars, EVs/hybrids and high-end luxury models.
Lexus looks at no-dicker stickers
Speaking of high-end luxury models, Toyota's upscale Lexus division is considering no-haggle pricing as a way to boost customer satisfaction according to the executive in charge of Lexus in a speech before the annual CAR Management Briefing seminars in Traverse City, Mich.
Jeff Bracken said about a dozen dealers have volunteered to test negotiation-free pricing as an extension of a pilot program the division launched last year called the Lexus Difference which is tailored to reach out to women, minorities and millennials.
"While negotiation-free pricing is not revolutionary, we strongly believe the concept will further elevate transaction transparency and customer care," Bracken said. He added that in addition to experimenting with the no-dicker approach, Lexus is also looking to use product such as a second flagship model in addition to the existing LS sedan along with lifestyle events to expand the brand's appeal outside of its traditional base.
Infiniti tries tablets
As Lexus tries out its single price selling strategy, Japanese rival Infiniti is equipping its sales force with tablets to update the buying experience. Using the ICAR-X app on a tablet, the Infiniti approach is designed to make the buying process, from showing the car to delivering it to the customer, much quicker. The app can integrate the customer's ownership history as well as any cars that have been configured by that prospect on the Infiniti website. In addition, it can help arrange test drives and speed the delivery process.
The app is being rolled out in Infiniti's 207-dealer network, and all features on the ICAR-X app are expected to be functional by year's end.
"We believe this will give Infiniti a more efficient premium car-buying environment," Jon Finkel, global director of Infiniti client experience, told Automotive News. Not only does it speed up the process, Finkel said it also addresses "the issue of 'perceived time.' That's the customer's perception that his time is valuable and he doesn't want it wasted by sitting around at a dealership in unproductive ways on a Saturday afternoon -- like waiting 30 minutes for a meeting with the finance department or waiting 20 minutes while store personnel pull the car out of inventory for a test drive."
Buick cuts Regal price
Following a similar move earlier in the year when it trimmed the price of its full-size LaCrosse, Buick has cut some prices of its midsize Regal sedan for the 2016 model year by as much as $3,320. The 2016 Buick Regal GS sport sedan will sticker at $34,990, or nearly 9 percent less than the 2015 model.
Buick also will drop one trim level for 2016 leaving four packages in the lineup. While the base model that's unchanged from 2015 will continue to start at $27,990, the 2016 Regal with premium II trim will be $2,535 less, at $32,490. Pricing on the Regal Group trim falls by $1,000 to $29,915, and all of those 2016 MSRPs include destination.
According to a note to dealers from division head Duncan Allred, "Repositioning the Regal to more aggressively compete in the midsize sedan segment is the first of many steps we are taking in advance of next year's product offensive. " An all-new Regal is expected for the 2017 model year.
Mercedes-Benz announces more 2016 prices
Following the launch of the 2016 Mercedes-Benz GLC, the German automaker has added pricing to other models in its 2016 lineup, the GLE, G and C450 AMG 4Matic sedan.
The 2016 Mercedes-Benz GLE-Class starts with a base model priced at $51,500 for the V6 rear-drive model and $53,600 for all-wheel drive. The 2.0-liter turbodiesel is $52,500 and includes all-wheel drive. The V8-powered GLE400 starts at $64,600 while the GLE63 AMG model is $99,950 and the GLE63 S AMG opens at $107,100. Coupe versions are priced at $65,100 for the GLE450 AMG and $109,300 for the GLE63 S AMG. The G-Class starts at $119,900 for the G550 and $139,900 for the G63 AMG. The 2016 C450 AMG has been priced at $50,800.
Honda begins the introduction of its 2016 lineup with an Odyssey Special Edition minivan positioned between the EX and EX-L models that includes such features as the on-board vacuum cleaner and rear seat entertainment system for more budget minded buyers. Pricing starts at $34,255.
Chevrolet continues its popular Midnight edition and Z71 Trail Boss option packages extending the availability from the full-size Silverado to the midsize 2016 Chevy Colorado. The Trail Boss, introduced on the 2015 model, is upgraded to include a new roof-mounted sport bar.
When the 2016 Volkswagen Jetta bows, it will be offered with a new 1.4-liter turbocharged 4-cylinder that promises 150 horsepower and 39 mpg. It replaces the existing base 115-horsepower 2.0-liter engine.
With compact car average transaction prices dropping, now might be the time to look for a new small sedan or hatchback. KBB editors have put together a comprehensive Compact Car Buyer's Guide.