Malibu Sales Drive Chevrolet Profits
When it was introduced six months ago, the all-new for 2008 Chevrolet Malibu was heralded by auto critics and consumers alike. The awards quickly came in, including the North American Car of the Year, a prestigious honor the Malibu snagged away from other worthy competitors including the Honda Accord.
Consumers Are Paying More
Perhaps the best confirmation of the model’s success is what the new Malibu is doing for GM’s bottom line, particularly for the Chevrolet dealers who have been selling the car with enthusiasm. According to a J.D. Power report published by The Detroit News, Malibu owners are paying $5000 more for this year’s model versus last year’s model. This is goods news as the economy continues to drag down overall sales and as the Malibu finds its place in the ultra-tough midsize car category.
Specifically, the report shows:
The average transaction price of the ‘08 Malibu was $22,358 through March 25, just $30 less than the average selling price in November, when the car was launched, according to J.D. Power. The ‘07 models are selling for $17,075, down from $17,787.
Buyers are opting for better-equipped Malibus too with 21% choosing the top-of-the-line LTZ version. For buyers of the 2007 model, only 5% selected the LTZ.
Conquest Sales Not Very Apparent
Dealers, however, are reporting slim conquest sales — the term used when new buyers trade in competing cars such as the Toyota Camry and Honda Accord — but the numbers are up as the previous model achieved virtually no success when luring buyers away from foreign makes.
Toyota, Honda Continue To Dominate
Toyota sold 473,000 Camrys in 2007 with sales running 2% ahead of last year’s figure. Honda sold 392,000 Accords with sales down 7% for the redesigned model. Chevrolet could only muster 117,000 Malibu sales last year, but is reporting an increase of 50% over last year. At the present rate, the hot Malibu will sell approximately half the number of units as the Accord.
GM has already pumped $300 million into the Malibu advertising campaign.
Further Reading
Interview with Jamie Hresko, GM/VP Quality
Toyota Camry, Cruising For A Bruising
Malibu Photo Copyright GM Corp.
Chrysler Pinning Hopes On Minivan Sales Surge
Twenty-five years ago Chrysler introduced a family of iconic vehicles, minivans, that quickly boosted the struggling automaker (pictured below with the current generation model). Just a few years removed from a federal government bail out, Chrysler needed something that would help the automaker stand out — its segment inventing minivans proved to be the answer.
For the first several years, Chrysler had no competition in the segment as Ford and GM had nothing to counter the Dodge Caravan, Plymouth Voyager, and the Chrysler Town & Country. It would be several more years before Toyota, Honda, and Nissan got into the game as well, a head start that has kept the Chrysler minivans at the top of the sales heap ever since.
Grand Caravan Sales Down Sharply
Sales since the fifth-generation minivans were launched six months ago are down 12%, not surprising given the overall drop in the economy. The Dodge Grand Caravan version has experienced the largest decline, nearly 20%, while the Town & Country has slipped just 1.7%. The newest generation minivans are the first where the shortened wheelbase model isn’t available, a strong seller for the Dodge brand.
But, it is the Spring months when Chrysler and Dodge dealers usually sell the most minivans, a full 40% of their annual sales, as families prepare to take their summer vacations. Unknown for this year are two things: how high gas prices and a struggling economy will impact sales. Many consumers are delaying their purchases until gas prices stabilize and the economy improves.
Good Reviews May Help
Although the Chrysler minivans have trailed Honda and Toyota in quality, but not in sales, the reviews for the current iteration have been good. The vehicles are well equipped and they come with features not available by Honda and Toyota including stow ‘n go seating. It also helps that Ford and General Motors have since exited the segment which has been declining. Crossovers are gaining in strength, a new segment which may eventually put more pressure on Chrysler and its competitors.
(Source: Detroit Free Press)
Photos copyright Chrysler LLC
Tata Completes Jaguar, Land Rover Deal
It took much longer than some had expected, but the deal is now done: India’s Tata Motors is now the owner of British makes Jaguar and Land Rover.
With the sale, the Ford Motor Company has freed itself from a pair of headaches, two huge drains on its bottom line. And with Aston Martin a previous sale, Ford’s premium car line up now consists only of Volvo, though the company may once again have the funds available to raise Lincoln up to that category.
Production To Stay In The UK
Tata Motors at first glance seems to be a terrible match for Jaguar and Land Rover, but then again there wasn’t much the two makes could do to thwart the sale though they tried. Concerns that production would be moved from the UK to India almost scuttled the deal until Ratan Tata and company assured the unions that production would remain in place.
Good-Bye Big Losses
For its part, Ford is receiving $2.3 billion for Jaguar and Land Rover, about half the price the company paid for the companies. Since buying Jaguar nearly 20 years ago the brand has lost $10 billion. Until recently, Land Rover also put up significant losses, but the company has managed to turn a small profit of late.
Gone, But Not Quite
Ford’s obligation to Land Rover and Jaguar isn’t quite over as the company agreed to pick up approximately $600 million in pension costs. In addition, Ford will continue to supply certain components including power trains for some models. Finally, Ford Motor Credit will continue to provide financing for Jaguar and Land Rover dealers for the next 12 months.
Further Reading
Car Firms Welcome Tata Takeover
Ford Reaches Deal to Sell Land Rover and Jaguar
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