This Week in Car Buying: GM cuts production; Porsche announces subscription plan; Cadillac expands its version; Interest rates moderate
General Motors will close its Detroit-Hamtramck assembly plant to adjust inventories of some car models, which is above and beyond the cutbacks it announced earlier as it retooled other plants. The six-week shutdown will idle some 1,500 workers who build the Cadillac CT6, Chevrolet Impala, Buick LaCrosse and Chevrolet Volt. Slow sales of full-size sedans and waning interest in the Volt plug-in hybrid as a result of Bolt EV introduction is seen as the reason for the shutdown. Supplies of the LaCrosse, for instance, stand at over 200 days—that’s the length of time it would take to clear out stocks at the current sales rate.
In a move that reflects the shift away from traditional sedans, GM also said that once the plant resumes production, it will make cars at a rate reduced by about 20 percent and lay off 200 workers as a result. Earlier this year, the plant eliminated a second shift to better align output with demand.
While GM is looking to reduce its car output with the plant closure, it is facing a different situation across the border in Canada, where a strike at its Ingersoll, Ontario, plant stretches into its fourth week. That facility builds the 2018 Chevrolet Equinox, which is positioned squarely in the hot selling compact crossover SUV segment. As a result, GM is said to be looking at expanding other plants that build the vehicle in order to make up the shortfall.
One of the sticking points in the dispute is the Canadian union’s insistence that Ingersoll be designated the lead plant for Equinox production, which means that any future cuts in output would occur at other plants building the vehicle. Those two other plants are in Mexico.
This contrasting situation means that buyers will likely be able to find plenty of deals on Cadillac CT6, Chevrolet Impala, Buick LaCrosse and Chevy Volt models as the maker looks to trim back on the number of vehicles on dealer lots. The downside is that if the Equinox strike continues, delivery times will be longer and discounts on the tight supplies lower.
Porsche announces subscription plan
The German maker of sports cars and performance SUVs announced a new subscription program called Porsche Passport, which allows users flexible access to vehicles via a mobile app. The month-to- month subscription plan offers frequent vehicle exchanges, unrestricted mileage and on-demand access for up to 22 different Porsche models. The program is being offered through a partnership with Clutch Technologies, which will begin a pilot program in Atlanta, where Porsche has its North American headquarters.
“Our strategy 2025 vision is to be the most aspiration brand in a new era of mobility and consumer expectations,” said Porsche Cars North America president and CEO Klaus Zellmer. “Catering to customers’ desires to experience our sports cars in new ways is a part of our core strategy. With Porsche Passport, we now offer our customers a simple and flexible driving solution at their fingertips.”
The white-glove concierge service offered in Atlanta will have two plans, Launch and Accelerate. The former offers on-demand access to eight models including the 718 Boxster, Cayman S, Macan S and Cayenne for $2,000 per month. Accelerate customers pay $3,000 per month for on-demand access for all 22 models in the program including 911 Carrera S, Panamera 4S, Macan GTS and Cayenne S E-Hybrid.
Included in the monthly payment are all tax, registration, insurance and maintenance fees including vehicle detailing. Available on Apple and Android devices, the Porsche Passport App requires a one-time $500 activation fee and use is dependent on a background and credit check. Vehicles will be delivered to members’ requested locations in metro Atlanta beginning next month. Users can request same day or future vehicle exchanges through the app.
Cadillac expands Book subscription plan
In a similar vein, Cadillac announced a new head of its Book by Cadillac program and that the subscription service will begin to roll out into more markets. Melody Lee will oversee the operation as the program in the company’s words, “will continue to further expand its geographic and customer footprint over the next few years.”
Book by Cadillac gives users on-demand access to Platinum-trim versions of the XT5, CT6, Escalade and V-Series vehicles for $1,500 per month. The company has begun a pilot program in New York, but hasn’t divulged the number of subscribers, though 1,500 of the initial 8,000 hand raisers who have expressed an interest in the service are located there.
Interest rates moderate
While new vehicles sales have waned and waxed as a result of a slowed sales pace and then a Hurricane-related spurt in September, the cost of financing these vehicles has seen a steady decline in rates since August, according to Bankrate.com.
Rates have dropped about a quarter percent from their highs of August 23. Back then, the average rate for a 60-month new car loan was 4.50 percent. It’s now at 4.26 percent. The rates for 48-month new car loans declined over that period from 4.47 to 4.2 percent. There was a similar drop in rates for 36-month used car loans, which fell from 5.01 to 4.76 percent.
If you are going out shopping for a new ride this weekend, check out 7 Insider Steps to Make New Car Buying Easier here.
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