Sticker prices are too high in Canada, and that has led to endless discounting that over-complicates the purchase of a new vehicle, argues Nissan Canada president Christian Meunier.
Meunier believes that responsible manufacturers should post MSRPs (manufacturers' suggested retail prices) that are fair and transparent. This is better for both shoppers and dealers because it builds trust, he adds.
And thus in keeping with Meunier's view of what legitimate pricing should look like, Nissan is poised to launch next month a sub-$10,000 subcompact car. Nissan says the Micra S with manual transmission at $9,998 has the "lowest starting MSRP in Canada" and offers "unbeatable value. What the press release doesn't say is that Nissan Canada has now fired the first shot in what is shaping up to be a price war for entry-level car buyers.
The Micra, a subcompact hatchback with thrifty four-cylinder engine, arrives just as other auto makers are also pushing out new versions of their subcompacts. The latest Ford Fiesta has been updated and Honda has an all-new Fit coming in the summer.
The Fit is a particularly interesting comparison case. Like the Micra, it's being made in low-wage Mexico, but where Nissan is pushing hard to offer a startling starting price and loudly touting it for all to hear, Honda is not positioning the 2015 Fit as a bargain-basement runabout for first-time buyers.
While Honda Canada has not yet announced pricing, in the United States the new Fit starts at $16,135. The base price of the made-in-Canada Honda Civic compact sedan is $15,690 in Canada, so the Fit will most certainly come in below that – probably at a sub-$14,000 base.
Dave Gardner, Honda Canada vice-president of sales and marketing, says Honda is carefully studying pricing for the new Fit, well aware of what Nissan is doing. Honda, though, is positioning the Fit as anything but a cheap box with wheels.
This Fit has "best-in-class passenger and cargo space, increased power, improved fuel economy and more refined, yet sporty dynamics," says Honda. Where Nissan has a very basic Micra for less than $10,000, the Fit's standard features will include LED taillights, Bluetooth connectivity and a rearview camera that Honda says will be an exclusive in the segment. What Honda won't do is match the Micra's starting price.
Beyond the sticker, Nissan is going after new customers and buyers with what Deals will call an "interesting" credit history – or none at all. With the launch of the Micra, Nissan is putting in place a sweeping range of finance and lease programs supported by Nissan Finance. There will be a Fist Time Buyer Program, a Grad Program, and a New Canadian Program to serve Canada's multicultural communities.
But most intriguing of all, the Micra Opportunity Program "makes it easy for buyers to make payments on time, while establishing or improving credit. No previous automotive finance or lease credit history is required and all applicants will be considered regardless of credit bureau history." So even if you have the credit history of a juvenile delinquent, Nissan will give you a look and bend over backwards to put you into a new Micra.
Just remember that if you want a Micra S with automatic transmission, air conditioning and cruise, you're jumping up to $13,298 from the sub-$10,000 MSRP. And buyers who want many of the usual items that make commuting less onerous – power windows, heated and powered side mirrors, a cargo cover and power door locks – will be moving north of $14,000 with an automatic gearbox.
At least some of Nissan and Honda's rivals clearly see what is evolving here. Take Chevrolet. The entry-level, made-in-Korea Spark hatchback starts at $11,945, but the right buyer might be able to string together up to $2,500 in discounts, plus a GM gas card promotion rated at $.40/litre for 800 litres. With GM Canada's deals, then, a Spark buyer could drive away in a new ride for less than $9,500, pocketing a gas card and cheering a 0.49 per cent financing for up to 48 months.
At Hyundai, the buyer looking at a new Accent sedan starting at $13,449, could combine a $779 factory discount with zero per cent financing for up to 96 months. Even mighty Toyota has a $1,000 factory rebate on its cheapest Yaris subcompact, the $14,255 three-door hatchback with manual gearbox. Indeed, almost every car maker has quite a decent offer on its least expensive models.
Nissan may be pushing for lower sticker prices and minimized discounting, but until the competition believes this is the way of the future, savvy shoppers will need to be rigorous in researching pricing – as has always been the case.
Of course, not everyone wants a little grocery getter. And yes, the deals in others corners of the marketplace continue. Hyundai, which just unveiled the 2015 version of the mid-size Sonata sedan, has more than $2,000 in incentive money in play, all of it stackable with zero per cent financing for 48 or 60 months. And on the pickup side, the aggressive, relentless buyer should be able to combine $11,000 or so in factory and dealer discounts on selected 2014 Ram pickups from Chrysler Canada.
Deals of the Week consulted with www.unhaggle.com, Car Help Canada, www.carcostcanada.com, and other sources on these offers. As usual, pricing information here is subject to change and dealer discounts vary, so consult your dealer for all the final details, including expiry dates for all offers.
2014 Chevrolet Spark LS manual
- MSRP: $11,945
- Freight, dealer prep, air conditioning tax: $1,550
- Dealer discount (estimated): $400
- Taxable subtotal: $13,095
- Total price with 13% HST: $14,797.35
- Factory discount: $500 (Auto Show Bonus)
- Factory discount: $500 (Student or Military Bonus)
- Factory discount: $1,500 (GM Discontinued Brand Loyalty Program or $750 for Targeted Loyalty Incentive)
- Final price: $12,297.35
- 0.49% financing for 36 or 48 months available with manufacturer incentive; GM Fuel Savings Card Program ($.40/litre for 800 litres)
2014 Toyota Yaris CE two-door hatchback
- MSRP: $14,255
- Freight, dealer prep and air conditioning tax: $1,495
- Dealer discount (estimated): $350
- Taxable subtotal: $15,400
- Total price with 13% HST: $17,402
- Factory discount: $1,000 (manufacturer incentive)
- Factory incentive available with 0.90% financing for 36, 48 or 60 months
2014 Hyundai Sonata 4 door Sedan 2.0T Auto Limited
- MSRP: $34,199
- Freight, dealer prep, AC tax: $1,830
- Dealer discount (estimated): $2,000
- Factory discount: $2,338 (manufacturer incentive)
- Taxable subtotal: $31,691
- Total price with 13% HST: $35,810.83
- Factory incentives available with 0.0% financing for 48 or 60 months
2014 Ram 1500 4WD Crew Cab 5.7 Ft Box ST w. SXT
- MSRP: $41,095
- Freight, PDI, AC tax: $1,830
- Dealer discount (estimated): $2,700
- Factory discount: $8,500 (manufacturer incentive)
- Taxable subtotal: $31,725
- Total price with 13% HST: $35,849.25
- Factory incentive available with 3.99% financing for 48 or 60 months
Pricing information source: unhaggle.com and carcostcanada.com. Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Where noted, "dealer discounts" are negotiated with the customer on a case-by-case basis. Unhaggle Savings are actual discounts received by Unhaggle customers.
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