General Motors Undercuts Competition With Lower Starting Prices
Looking for a new Cruze, LaCrosse or Terrain? You might have a bit more money left thanks to some undercutting by General Motors.
CarsDirect reports GM has dropped the base MSRP on a handful of models by as much as $2,750. As a result, some of those models are lower in price than their competitors. The aforementioned GMC Terrain gained the greatest undercut, falling $4,030 under the Ford Edge with the crossover’s new base of $24,070.
However, to be able to undercut the competition without removing key features, GM has sliced dealer margins on the cheapest trims, such as the Terrain SL, Buick LaCrosse 1SV, and the newly introduced Chevrolet Cruze L. Profit margins on such vehicles being as thin as they are already — the difference between MSRP and invoice on the Cruze LS is $600, but only $81 on the L — the economy models may see or are seeing now incentive inclusions.
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"Uh oh, we're losing market share." "Quick, lower the prices!" "But then we're selling them at a loss." "Don't worry, we'll make it up in volume!"
First thought: The new Cruze grille don't work for nobody at all. And does this count as a new model or a refresh? Cause other than grille I don't see any changes at the front. Second thought: "The aforementioned GMC Terrain gained the greatest undercut, falling $4,030 under the Ford Edge with the crossover’s new base of $24,070." That's about where it should be, because I'm taking Edge any day of the week. The Terrain is old and overpriced, and RIDIC priced at higher trims. The 6cyl is even an -optional extra- on the Denali version.
How can a dealer stay in business with $81 margin on the Cruze L????? I guess GM is making its money on the financing like many subprime lenders. Not long before Cruze will offer the BHPH option.
I wish more manufacturers would use this model. Seems like only GM and Nissan are willing to break the oligopoly pricing racket. Let well-built cars mature. Reduce the price. Spend the development budget on powertrain upgrades, reliability, and aero tweaks. Better yet, put a BAS mild-hybrid system and CVT on the 1.8L engine, and see if Cruze will make 40mpg combined for the cost of a base-trim Civic. I know the average sod wants to spend his money on technological frills, but oil price volatility is going to steer development spending towards the powertrain.