Compact Cars on Dealer Lots for Shortest Period of Time
The latest metric illustrating how hot small cars are in America? 35. That’s the number of days that the analysts at J.D. Power say that “compact basic” models are sitting on dealer lots, and it’s the shortest turnover of any of firm’s 27 vehicle segments.
According to the Power Information Network’s June-July 2008 findings, compact cars are, on average, leaving showrooms about two weeks faster than compact and midsize crossover vehicles. For comparison’s sake, leading compact crossovers like the Honda CR-V sat on lots for 52 days, and the Ford Edge, 58 days. Nameplate-wide, the segment averaged 60 days.
More and more consumers trading in midsize CUVs are going smaller, too. Whereas a year ago, almost 30 percent of owners traded for another vehicle of the same size, now, only around 20 percent are doing so. More owners within the segment are trading not only into compact CUVs, they’re looking at compact cars and midsize cars as well.
All of which is having a substantial impact on the amount of money coming in the front door for America’s dealers and automakers. The average midsize CUV cost $30,806 over this time period—a whopping $15,904 more than the average tab on a subcompact car ($14,902), and $8,681 more than the $18,347 average transaction price on a compact car.
Looking at these numbers, it’s easy to see that even if a dealer is fortunate enough to have their unit volume skyrocket, making the same sort of margins on these smaller, less expensive vehicles is all but impossible.
Comments
Mena
"making the same sort of margins on these smaller, less expensive vehicles is all but impossible."
Which will either force dealers to downsize their dealerships, which in turn means less deals on cars which means WE will pay more for cars in the future. OR, if the dealerships cry loud enough, the manufacturers will add more content to cars to help increase profit margins on cars. Either way, the consumer is screwed unless you make enough money to absorb the cost increases.
Uragan
You are probably right, Mena, and it means that the US market will look more and more like the European market.
Mena
"You are probably right, Mena, and it means that the US market will look more and more like the European market."
Not sure about that. One of the differences between us and the Europeans is we will just stop buying if it's too expensive. The Europeans keep paying for the expensive stuff. In order to keep business, car makers will eventually make cheaper stuff. But all the goodies we ALL had before will be reserved for the well off and the rich. Or the loans will get longer (you can already get a 6 year car loan).
Anonymous
So how do you explain the little Saturn Astra sitting on dealer lots en masse for months on end? Oh yea, thats right, nobody knows about them 'cause Saturn doesn't tell anyone about them. It's their best-kept unsold secret.
Mena
I agree. No one knows about them. They should be flying off the lots right now but they aren't. It's like the car is destined to fail.
Uragan
Well here is what I see: Option 1: US market = European market; Option 2: US streets crowded with Chinese cra.. I mean, cars.
Post new comment