This Week in Car Buying: GM bulks up to dial back; Toyota Prius price cut; Genesis prices G80; Subaru WRX/WRX STI updates
General Motors is allowing its inventories to grow in advance of a 10 week plant shutdown this summer as it retools for new 2018 Chevrolet Silverado and GMC Sierra pickups. According to Automotive News, GM had a 97-day supply of vehicles on April 1, the highest of any major factory, up from 91 days’ supply a month earlier. Days’ supply is the number of days it would take to move all the vehicles in stock at the current sales rate. Among GM brands, Buick is the highest with a 151-days’ supply.
While the company says the summer production hiatus is primarily for plant changeovers, it’s also likely that the typical two-week shutdowns will be longer and extended to plants with products other than the new pickups. This will give the automaker some breathing room as it assesses which way the market is headed. Even as its inventory is rising, GM has been keen to manage the number of vehicles it has on hand, trying to avoid dumping excess inventories into the fleet and lease markets, which can undermine resale values when these vehicles return en masse. This is the current situation the industry faces as leasing reaches record levels—nearly one in three new vehicles are leased—and huge numbers, some 3.1 million, are expected to return to the used-car market this year alone.
This glut of used vehicles not only depresses those values, but also puts pressure on the factory to use incentives to move new vehicles, something that GM is looking to avoid as it hopes to protect its profit margin by emphasizing retail sales without having to resort to an incentive war with the competition. Competitors who don’t trim production schedules may pick up market share, but it may cost them dearly in high incentives, making new vehicles sales marginally profitable at best. Bottom line is that it’s a great time to be buyer, not so good to be building cars in a market that’s peaked. Automakers are looking to see who blinks first in cutting back output, and perhaps GM is that manufacturer.
Speaking of inventories, Subaru, which has had the tightest rein on its supply of vehicles, has seen its stocks rise to 38 days’ worth, while BMW has trimmed back from 48 to 36 days over the past month. As Subaru supplies have grown, there’s been an uptick in the lease deals being offered by the brand.
Toyota drops Prius price
It didn’t take long for Toyota to respond to Hyundai’s pricing of its new Ioniq Hybrid at $22,200 to lower the price of its Prius by offering a new entry-level model called Prius One. This new $23,475 model shaves about $1,200 off the previous Prius Two entry-level model, which was priced at $24,685.
The new Prius One model dispenses with a rear window wiper and seatback pockets. Including destination charges, the Prius One will retail for $24,360 versus the Ioniq’s $23,035.
Lower prices and rebates continue to be the order of the day in the hybrid and EV market with local utilities even getting into the act. Customers of Duke Energy, which serves Florida, the Carolinas, Indiana, Kentucky and Ohio are eligible for a $10,000 rebate on the Nissan Leaf, which combined with the federal tax credit of $7,500 effectively takes $17,500 off the price of the Nissan’s $31,545 taking it down to $14,045. The deal runs through June 30.
Genesis G80 priced
The sedan formerly known as the Hyundai Genesis, now known as the G80 in the newly spun off Genesis luxury division, has been updated and priced for the 2018 model year. The biggest change is the addition of a sport model powered by a 365-horsepower 3.3-liter twin-turbo V6 positioned between the base 311-horsepower 3.8-liter V6 and top-line 420-horse 5.0-liter V8 models. All models are offered with a choice of rear- or all-wheel drive.
The Genesis G80 3.8 starts at $41,750, the G80 3.3T opens at $55,250, and the G80 5.0 Ultimate is priced at $57,000, all for rear drive. AWD adds $2,500 to all prices, which are exclusive of $975 delivery. In addition to the new model, the entire range benefits from an updated grille and fascia, the availability of LED lighting, a new 18-inch alloy wheel design and minor upgrades to the interior.
Subaru WRX and WRX STI updated
For the 2018 model year, Subaru has updated its WRX and WRX STI hot hatches with a freshened front end with a more aggressive look that incorporates a larger lower-grille opening. The WRX is powered by a 268-horsepower 2.0-liter flat four engine that delivers output to all four wheels via Subaru’s Symmetrical All Wheel Drive with Active Torque Vectoring. Buyers can opt for either a 6-speed manual or a performance-oriented version of Subaru’s Lineartronic CVT with a manual sequential shift mode. The 2018 WRX will start at $26,995 plus $860 delivery. The WRX tops out with a Limited CVT model at $32,795 plus delivery.
The more hard-core performance WRX STI boasts a 305-horsepower 2.5-liter flat four and includes a multi-mode, driver-controlled center differential along with the Symmetrical all-wheel drive. The STI is offered only with a 6-speed manual. Pricing starts at $36,095 plus $860 delivery. The WRX STI Limited is $40,895 and can be ordered either with a rear wing or a lower-profile decklid spoiler.
After it has dropped its entry-level Model S 60 and 60 D variants, Tesla has cut the price of its Model S 75 Sedan by $7,500 to $69,500. That price doesn’t include the $7,500 federal tax credit.
Mid-cycle refreshes are also becoming more popular even among luxury makes, as the wraps have come off the 2018 Mercedes-Benz S-Class. There are new engines to go along with the new look.
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