With sales up more than 42 per cent last month from a year ago, Volkswagen Canada is having no problems selling the current four-year old Jetta.
But based on speculated U.S. pricing and a new VW midsize sedan coming next year, 2011’s new Jetta may be substantially less expensive to buy.
According to the fan site VWVortex, the German automaker has been working to source more components and systems from North American suppliers for next year’s new Jetta, which will continue to be made in the company’s Puebla, Mexico, plant.
The result could mean an over-$3,000 USD reduction in price from the current Jetta’s $17,735 USD base price. In Canada, the least expensive 2010 Jetta sells for $18,692.
The other factor in the lowering of Jetta pricing is VW’s so-called New Midsize Sedan.
The NMS, which is the code name for a new family sedan to be made in a brand new VW plant in Tennessee, has been designed to compete against the likes of the Honda Accord and the Toyota Camry.
In an interview with Automotive News last year, Stefan Jacoby, CEO of Volkswagen Group of America, stated that the NMS will be available in Spring 2011, and will have a price tag in the range of $20,000 USD – substantially less than the current German-made Passat sedan that the NMS will replace in North America.
Although the new 2011 Jetta will arrive in Canada this fall, the popular TDI diesel model won’t. Don’t expect the next diesel Jetta until early 2011, Edmunds’ Inside Line reports.
But prices could go up by 2015
A new report suggests that recently passed U.S. auto-safety regulations created in direct response to Toyota’s troubles with its cars accelerating unintentionally could add as much as $4,000 USD per new car sold by 2015.
The new safety laws that will mandate the installation of brake-override systems, as well as standards for foot-pedal placement, push-button ignition systems and transmission configuration, will also demand new Event Data Recorders, better known as “black boxes.”
According to a report in Automotive News, the new EDRs will have to be both fire resistant and waterproof. A significant amount of recording time before and after an accident will also be required. Estimated cost: $4,000 to $5,000 each.
Today’s EDRs monitor about five seconds’ worth of information just before an accident. Some U.S. government officials are suggesting that up to 75 seconds of pre-crash recording data will be required.
The report speculates that the new EDR price tag will be passed directly to new car buyers if the boxes are made mandatory by 2015.
Sales stats show ‘haves,’ ‘have-nots’
Canadian new car sales figures for March that came out this week show that two trends are starting to emerge for the 2010 model year.
First, 2009 was one of the worst years for new car sales in decades. Yet 2010 is shaping up to be not that much better overall. Sales of new cars and trucks only increased by 0.2 per cent last month to 154,018 vehicles.
Second, the market is splitting into two groups: the “haves” and the “have-nots.”
On the “haves” side, Ford (driven mainly by pickup sales) led again with 26,110 vehicles sold in May, up almost 20 per cent compared to May 2009. Once-perennial leader General Motors wound up in second place, selling 25,995 vehicles — down more than 17 per cent.
Third place Chrysler was up more than 53 per cent with sales of 20,861 while Hyundai/Kia took fourth place with sales of 18,351 – up 13 per cent compared to last May.
Two of the biggest “have-nots” were fifth place Toyota/Lexus (17,879 sold, down 16 per cent) and sixth place overall Honda/Acura (11,587 sold, down 26 per cent.)
On the luxury vehicle side, Mercedes-Benz led the way with gains over 22 per cent. Porsche was up 20 per cent and Audi was up over 13 per cent. BMW was down almost 12 per cent.
Is the Web killing car sales?
While it’s been generally recognized that video killed the radio star, a new report is suggesting that the Internet is killing car ownership.
A recent article in Advertising Age highlighted a cultural shift that’s been developing for as long as 15 years. Essentially, cars are becoming less relevant to a growing number of people under the age of 30.
According to U.S. Department of Transportation data, nearly half of 16-year-olds and three-quarters of 17-year-olds in the U.S. in 1978 had their driver’s licenses. By 2008, though, only 31 per cent of 16-year-olds and 49 per cent of 17-year-olds had licenses, with the decline accelerating rapidly since 1998.
William Draves, the president of Lern, a U.S. consulting firm that focuses on higher education, blames the Internet. He says the digital age is “reshaping” the world early in this century, much like the car transformed North American life early in the last century.
In addition, research firm J.D. Power & Associates found that Gen Yers (a demographic born somewhere from the mid-1980s to the early 2000s) don’t talk about cars in social media nearly as much as older people do.
“I don’t think the car symbolizes freedom to Gen-Yers to the extent it did baby boomers, or to a lesser extent, Gen Xers,” said Sheryl Connelly, Ford’s global trends and futuring manager.
“Part of it is that there are a lot more toys out there competing for the hard-earned dollars of older teens and young adults.”
But some counter that the shift away from cars isn’t permanent; rather, it’s just being delayed.
“That (generation) may eventually get married and have children. Living near work is something you do when you’re young and single. When you start picking out schools and amenities you want for your children’s development, people are less willing to live near the office,” argued Paul Taylor, chief economist with the U.S. National Automobile Dealers Association.
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