It’s been a good year for most automakers, with sales up about 8% so far and most car companies reporting handsome profits. Ford (F) recently announced third-quarter earnings that exceeded estimates, while raising its outlook for full-year results. General Motors (GM), Chrysler and many foreign automakers are bullish, too.
A booming market for cars isn’t necessarily great news for consumers, however, since rising demand tends to push prices up. Car buyers, on average, have paid $31,623 for a vehicle so far this year, according to car-research site KBB.com. That's a 1.1% rise from last year. But the prices of many models have increased by more, with about a dozen nameplates rising by more than inflation, which is around 2%.
Brands that are able to raise prices more than average are usually doing well, since buyers will only pay asking price — or more, in some cases — for the hottest, trendiest cars. Brands with the weakest models, by contrast, usually have to discount the most. For buyers, however, targeting a hot brand often means writing a bigger check every month, while purchasing a sales laggard can generate big savings.
To determine where average prices are going up and down the most, we analyzed data provided by KBB on the latest average transaction prices, compared with 2012. Here are the five brands with the biggest price hikes from 2012 to 2013:
Scion, average sale price: $21,377, up $1,372 (6.9%) since 2012. It’s unusual for Toyota’s youth division to land at the top of any list, since Scion has long been Toyota’s weakest brand. But suddenly it has one thing going for it: the FR-S sports car, an authentic road-hugger that has delighted critics since its introduction earlier this year. The base price is a modest $26,000 or so, yet that still makes the FR-S Scion’s most expensive model. So its popularity has helped boost the brand’s average sales price while also providing a much-needed shot of adrenaline.
Land Rover, $68,336, up $4,374 (6.8%). Two fresh models, the Evoque and Range Rover, have brought mainstream interest to a brand long viewed as the aristocrat’s off-roader. Worth noting: India’s Tata Motors, which bought Jaguar and Land Rover in 2008, has invested much more heavily in new models than the previous owner, Ford.
Jeep, $32,755, up $1,545 (5%). The revival of this storied brand — which is owned by Chrysler and suffered neglect as the automaker sank toward its 2009 bankruptcy filing — is about halfway complete, thanks to an impressive redesign of the Grand Cherokee, which hit showrooms last year and has continued to be a strong seller in 2013. Next, Jeep needs the forthcoming Cherokee (a separate model, without the Grand) to be a hit.
Ram, $39,844, up $1,833 (4.8%). There’s just one product in this Chrysler division — the Ram pickup, which auto critics named North American Truck of the Year for 2013. That always helps sales, but so did Chrysler’s timing – the new Ram debuted just as the housing market was picking up and contractors had money to spend on new vehicles.
Jaguar, $72,470, up $3,235 (4.7%). In the old days, it was wise to pick up a spare vehicle when you bought a Jag, because the elegant yet fragile machine broke down so often. But new owner Tata has wowed critics with models such as the upgraded XF sedan and the fetching new F Type convertible. “All of the Jaguar products are far better than they were a few years ago,” says Karl Brauer of KBB. Buyers have noticed, and opened their wallets.
Here are the brands with the biggest price declines from 2012 to 2013:
Smart, average sale price $15,638, down $240 (1.5%) from 2013. It’s not surprising prices for these underpowered Flintstonemobiles have fallen; what’s surprising is that they’re still in the U.S. market at all, given that many other cars offer better mileage and features for a similar price. “I don’t know why anyone buys those cars,” says Brauer. “They’re terrible.”
Mitsubishi, $23,665, down $423 (1.8%). The newly redesigned Outlander SUV gets decent reviews, and the Lancer Evolution sedan remains the poor-man’s Porsche, with thrilling track-worthy performance for about $35,000. Yet Mitsubishi’s U.S. market share is a puny 0.4%, which feeds rumors the automaker may soon bail out of the U.S. market. The company insists it’s staying, yet its weak presence still forces discounting.
Volkswagen, $25,961, down $483 (1.8%). This German automaker sells more high-mileage turbodiesels in the United States than any other car company. Yet sales of conventional models such as the Passat and Jetta sedans, the Beetle compact and the Touraeg SUV have fallen as competitors have rolled out newer, more appealing offerings. That pushes VW prices down.
Porsche, $87,782, down $2,596 (2.9%). In this case, a lower average price is good news, because it indicates that new versions of Porsche’s cheapest vehicles — the Boxster and Cayman — are both hits registering strong sales. Besides, who can complain when you net nearly 90 grand on a typical sale?
Dodge, $27,399, down $1,154 (4%). This overlooked division of Chrysler will soon get a new Avenger sedan and Durango SUV to accompany the retooled Dart compact that came out last year. For now, however, the lineup remains dated, which means some terrific deals are available at the Dodge dealership — if you dare.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
- Automotive Industry
- Consumer Discretionary