This Week in Car Buying: Inventories grow; minivan movement; Ford hybrid price cut
As winter rears its ugly head in the East and Midwest, car sales are naturally bound to take a hit. And January inventory numbers reflect a slight uptick in stocks, while slower sales means the industry days' supply figure-the number used to calculate how long it would take to empty lots at the current sales rate-has gone up dramatically. But according to Automotive News, which reports on the figures, it's something that happens this time every year.
Overall industry days' supply grow from 61 (60 is considered normal) to 82 from December to January, though the total number of cars on the ground increased only 2.3 percent to 3.6 million. Smart shoppers know that more cars and fewer sales translate into dealers looking to deal. Among those carrying the largest days' supply are Lincoln and Fiat with 152 days' supply on hand each. Next closest is Buick at 123 days. Among the models in greatest supply at these brands are the Lincoln MKX, MKZ and the newest entry, the MKC, which more of a sign that this model, which has been off to a quick start, is finally reaching dealers in significant numbers. Fiat has a surfeit of both 500 and 500L models on the lots, while at Buick, the Regal and LaCrosse are in greatest supply.
West Coast dock strike not an issue...yet
The strike by dockworkers on the West Coast has had little or no effect on imported car delivers because the affected ships are primarily container cargo craft. But it has interrupted the pipeline of auto components. Honda announced that it will be trimming production in Ohio as a result, but not so much as to affect vehicle supplies. In fact, the reduced production schedule's timing might not be a bad thing given the winter season slowdown in sales.
Mazda reports that the only impact has been on replacement parts shipment. According to a spokesman, "We continue to take measures such as air-shipping parts to our dealers to ensure we meet our customer's expectations wherever possible." Mazda vehicle shipments come through National City near San Diego and Tacoma, Washington, which means the impact on vehicle shipments has been minimal with the spokesman adding that there has a been a slight delay in unloading, but it amounts to about day.
Work on the replacement for the Chrysler Town & Country minivan, which is slated to bow next year as a 2017 model, continues apace with spy photos of test mules making the rounds of the web. In an interview at the Chicago Auto Show last week, Al Gardner, president and CEO of the Chrysler brand confirmed an earlier Automotive News report that the vehicle will be repositioned slightly with a lower base price (reportedly $26,000 or about $3,000 less than the current model) in order to have a price point closer to the outgoing Dodge Grand Caravan. This is critical because Dodge sold 134,000 Grand Caravans last year to Chrysler's 138,000 Town & Country models. Chrysler hopes to have greater economies of scale and less duplication at the dealer level by consolidating the minivan under the Chrysler banner and letting Dodge be more of a performance car brand.
While the new minivan is still a year off, Chrysler has significant incentives on the 2015 Town & Country with cash back ranging from $500 to $2000, while Dodge has $500 to $1,750 on 2015 Grand Caravans.
Hybrid price break
Early order guides from Ford for the 2016 model year show that it will be reducing the price of its Fusion Energi plug-in hybrid as well as the standard Fusion hybrid by $900 across the board. According to the guide, the 2016 Ford Fusion Energi SE Luxury begins at $33,900, while the 2016 Fusion Hybrid S will start at $25,675. There's no price change on standard gasoline powered Fusion models. While most price cuts reflect the elimination of some features, the cars remain unchanged and in fact get a new EcoSelect mode that includes more aggressive regenerative braking to boost mileage.
Current 2015 models of the Fusion Energi and Hybrid models have rebates topping out at $1,000. The 2016 models are scheduled to go on sale late this year and there are indications that the incentives may remain unchanged despite the price decrease.