31 May 2014

Selling On Value - Mitsubishi ASX In NZ

The ASX out for a coffee somewhere. Now better value.

Selling with a sharp price is fraught with danger. If you don't sell enough to justify the low price, and all you do is hurt the bottom line. If sales skyrocket, you can make up for the lower price with volume. Of course the opposition will move if it does work. The problem with that is the competitive edge is lost and everyone sells more cars but profit is less all around. So why do it?

Often manufacturers will offer incentives to importers to move more cars and that can make up for the lower price. Also, if a model simply isn't selling at the present price, you have to make it more appealing or withdraw it. So it's a gamble, but for one I like it when fortune favours the brave.

Mitsubishi NZ had success on its dated Lancer with a $26k list price. It has now decided to try the sharp price route on its more up to date ASX model. It was going at a too high $37k, but now is down to $30k. How does that compare?

Smaller, less classy & now undercut for value
A 1.6L Suzuki S-Cross CVT comes in at 30K. The GM Trax 1.8L Auto is 33K. Both have smaller engines and are not as good in my opinion. Ford do a nice Kuga 1.6 auto at 40k, so forget that. That's the same money as a 1.4L VW Tiguan with DSG auto, which is too dear too. The Peugeot 4008 is same basic car as the ASX but it is 38k! The Mazda CX-5 2.0L auto is nudging 40K and so it goes on.

Summary: NZ isn't the dearest place to buy cars by any stretch, but neither is it the cheapest. The fact that Mitsubishi can bring the price down to 30K proves the latter. I sent an email asking - among other things - if it was a permanent price. That was one point they didn't answer. I guess it depends how well it sells. The dealers will love the price and the customers should too. I wonder how the competition will react?

1 comment:

  1. JLR in a race-against-time in China as rivals look to mimic its designs

    2nd June 2014


    Duncan Tift
    By Duncan Tift - Deputy Editor, West Midlands

    JLR\'s Chinese-built Evoque takes a bow at the new factory in Changshu
    JLR\'s Chinese-built Evoque takes a bow at the new factory in Changshu

    VEHICLE manufacturer Jaguar Land Rover could be forced to bring forward its production timetable at its new Chinese joint venture factory as it looks to ward off competition from companies mimicking its designs.

    Sources in China have picture evidence of the Chinese Evoques rolling off the production line at the new factory in Changshu, in the Jiangshu Province.

    JLR chief executive Dr Ralf Speth said last month that it was likely the first vehicles produced at the factory would be rolling off production lines by the end of this year, ready for sale to Chinese buyers early next year.

    However, as this picture from the website CarNewsChina.com shows, the production vehicles are now ready. Photographers can clearly be seen taking pictures of the car, which has a special red ribbon draped across its bonnet.

    The reason for the company’s haste is a situation unlikely to ever occur in the West, where copyright infringement and intellectual property laws are far stricter.

    However, in China, the JLR-Chery joint venture is facing a race-against-time in order to get the new Evoques to market before a rival manufacturer introduces its alternative.

    The Jiangling Motor Corporation, through its brand name Landwind, has applied for patents for its new vehicle, the E32 SUV.

    The pictures (below), again from the CarNewsChina.com website, show a vehicle almost identical to the Evoque, even down to the badging on the bonnet.

    The Landwind E32 Evoque-rivalThe Landwind E32 Evoque-rivalAccording to the website, the E32 will be launched onto the Chinese market in the fourth quarter of this year and disguised test mules are already being put through their paces.

    It is claimed the SUV will be powered by a 2.0 litre 190bhp turbocharged four-cylinder petrol engine with a choice of either a six-speed manual or an eight-speed automatic gearbox. The E32 is apparently based on a shortened wheelbase variant of another Landwind vehicle.

    The mimicking of Western designs by Chinese manufacturers is nothing new but when JLR has so much at stake with its new enterprise the brash challenge is at the least, unwelcome.

    It cannot even play the ‘British card’ because the vehicle is a domestic model specifically built for the Chinese market so it can overcome import duties.

    The new factory is expected to begin producing around 100,000 vehicles a year although this is set to rise steeply – possibly even double – in order to meet local demand. Such volumes would put the operation on a par with the firm’s plant in Solihull.

    The company has also been actively sourcing Chinese suppliers that have supported the construction of the factory in order to develop a reliable component supply chain.