Thursday, September 4, 2008

US Car Sales Down?!? Self Inflicted Wounds!!

Ok, I'm really annoyed and tired of hearing about the woes of the US car companies. This past week, I shopped around and purchased a vehicle all at the same time. I am a thirty something, married, with three children, living in the North East. I was looking to replace my 200x Ford Windstar, which I paid off last year. I was not looking to take on a car payment, however, I've recently been sinking in more money to my car than I'd like, the resale value was about 3k, and I've wanted to buy one of those fuel efficient hybrids to save on gas. My parameters were to get a hybrid vehicle with at least 5 seats, and lots of storage, so I was targeting a mini-SUV hybrid. Also, I've got an affinity with American cars, so I wanted to continue that tradition. I did some research on line, but wanted to do most of the interaction at the dealership, call me crazy. So, I narrowed down my choices to a Mercury Mariner Hybrid, Saturn VUE Hybrid, and a Ford Escape Hybrid. I called my local Mercury dealer about their Mariner hybrid, and the sales men at the dealer said they don't have any, and can't get any. I was really a bit shocked. I said: That's it? You can't even order me one if I said I would buy it now, and he said yes. I also checked for more dealers in my region, and no luck. On paper, the Mercury Mariner Hybrid looked great, just like the Ford Escape Hybrid, decent MPG, storage/capacity, and MSRP! You just can't get one. Is it a vaper product? Does it really exist? I also went to Saturn, and they happen to have a hybrid VUE. It was a nice drive, but the pricing \ financing did not seem enticing at all. I needed to put forward around ~4k down, and payments were ~580 USD per month. This was based on average credit rating information to get a ballpark rate. I finally called around for the Ford Escape Hybrid, and my local dealer said they don’t have any, but he would order me one if I said I would buy it. If I was lucky enough, they get one, and within a day they are sold, I was told. I went in to check out the regular Ford Escape, which drove well, and with a luxury package loaded, and 3k down, I wound up getting a deal for $390 per month with 0% for 72 months. The Ford Escape Hybrid, there were no such deals…~6% financing. There were a lot of claims thrown around, like Ford had a few large orders of hybrids for California, and that’s why inventory was dried up. Someone told me maybe there was a quality or manufacturing difficulty that’s why they are not readily available. Others cautioned me about the battery replacements, and interesting point of note is that for NJ I’m told the batteries need to be a warranty by the manufacturer for 10 years. Regardless of the shortage of Hybrid inventories, there is not a shortage of excuses for the availability of hybrid vehicles. If I were a conspiracy theorist, I may say that the manufacturer is purposely drying up inventory because its cost prohibitive to sell these vehicles in New Jersey because of the battery law \ warranty enforcement. Or if this is a larger inventory shortage issue on Hybrids, I may theorize that major US manufacturers have a larger conspiracy to keep the price of oil afloat.

This is not a new trend with hybrid vehicles, and gas\oil prices. Last year I wanted a hybrid, and shopped around but got the same story before I bought my Saturn Ion, which I've been fairly happy with so far.

If a manufacturer is declining in sales of product A and product B is in demand (year over year), shift gears, excuse the pun and manufacturer more hybrids, enough to meet demand. And hell, offer incentives during the year as well! Want to move product? US car manufacturers, what are you doing?

Please don’t complain about low car sales when you have pent up demand for your product, the hybrids