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    Thread: GM's solution to slow Regal sales: Raise the price to $29,900

    1. Member rimtrim's Avatar
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      08-30-2012 03:53 PM #1
      http://www.autoblog.com/2012/08/30/2...standard-eass/

      If this strategy makes sense to you, send your resume to Dan Akerson, because you're both apparently abusing the same substances. This stuff only makes sense in the context of being a strategy to drive Buick sales so low that they have an excuse to cancel the brand. If this car were a Chrysler 200 competitor (luxury looks, Camry price) it would be a smash hit. The body is different enough from the new Malibu that nobody except a few pompous Truth About Cars writers would accuse them of cookie-cutter rebadging if they took that approach. Instead, they seem to want to cram the Regal into a niche so small that they drive monthly sales down into the dozens.

      -Andrew L
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    2. 08-30-2012 04:01 PM #2
      Anecdote that isn't necessarily applicable, but maybe is.

      I recently sold a bicycle on Craigslist, listed for $500 which was more than fair. I would have taken $450.

      I got a lot of bites, but a lot more lowballing. Nobody serious stepped up to buy.

      I relisted it at $550, still willing to take $450.

      I sold it a couple of days later for $500.

    3. Member Mike!'s Avatar
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      08-30-2012 04:02 PM #3
      Losing sales to one of your other models can be looked at as a good problem to have.

      With the Verano covering the low end so effectively, why not find a niche for the Regal?

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      08-30-2012 04:04 PM #4
      Quote Originally Posted by rimtrim View Post
      http://www.autoblog.com/2012/08/30/2...standard-eass/

      If this strategy makes sense to you, send your resume to Dan Akerson, because you're both apparently abusing the same substances. This stuff only makes sense in the context of being a strategy to drive Buick sales so low that they have an excuse to cancel the brand. If this car were a Chrysler 200 competitor (luxury looks, Camry price) it would be a smash hit. The body is different enough from the new Malibu that nobody except a few pompous Truth About Cars writers would accuse them of cookie-cutter rebadging if they took that approach. Instead, they seem to want to cram the Regal into a niche so small that they drive monthly sales down into the dozens.

      -Andrew L
      A $2K price hike? What's the big deal? The LaCrosse uses the eAssist package as it's base engine and it's sales have been unaffected. The Regal will be moving up in price to allow room for the Verano, which is a good idea, IMO. The Regal is no longer Buick's entry level sedan.

      In the next go around, Buick needs to find a better spread between its 3 sedans or eliminate the Regal in the middle. This will clear up some of the price point clutter. It would probably help if the LaCrosse became slightly more expensive, bigger and RWD, or if the Regal became a sport-oriented RWD sedan.
      Last edited by whitejeep1989; 08-30-2012 at 04:07 PM.

    5. Member rynodyno312's Avatar
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      08-30-2012 04:08 PM #5
      That's a pretty misleading thread title. They didn't just raise the price, they also added the $2000 e-assist option as standard equipment. So yes, the price did go up, but so did the feature content and mpg.

    6. Member Señor Peligro's Avatar
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      08-30-2012 04:29 PM #6
      I just want to make sure I've got this straight....it's still essentially in the TSX price class, right?
      Now go get your shinebox

    7. Senior Member Lwize's Avatar
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      08-30-2012 04:45 PM #7
      The price increase just means larger incentives to sell them.
      :gift:

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      08-30-2012 04:46 PM #8
      I don't see a problem with this. Buick is dropping the base 4-cylinder model and replacing it with eAssist. Did anyone really think the eAssist was going to be free? Buick made a similar move with the LaCrosse before and Lincoln as well with the MKZ.

      It now positions the Regal up higher above the Verano.

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      08-30-2012 04:49 PM #9
      Is the e-Assist hardware somehow cheaper than the turbo engine's componentry? It's a pretty uncompetitive system and it makes far more sense to make the Regal turbo only for the price increase.

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      08-30-2012 05:17 PM #10
      Quote Originally Posted by whitejeep1989 View Post
      In the next go around, Buick needs to find a better spread between its 3 sedans or eliminate the Regal in the middle. This will clear up some of the price point clutter. It would probably help if the LaCrosse became slightly more expensive, bigger and RWD, or if the Regal became a sport-oriented RWD sedan.
      I don't know if either needs to switch to RWD, but certainly a bigger size disparity and/or price/feature disparity needs to occur.

      But at the end of the day, Regal sales be damned, Buick is in a much better position sales wise then it was 3 years ago. The LaCrosse debuted selling for under $27,000 and now it is selling in similar quantities starting at $30,000. It is outselling what the Lucerne used to sell at the Lucerne's old pricepoint without huge rental fleet discounts. The Verano is shaping up to be a big hit. The Regal provides good brand image even if it doesn't really have a place in the current line-up.

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      08-30-2012 05:22 PM #11
      misleading thread title is misleading!
      '11 Forester | '93 MR2

    12. Member rimtrim's Avatar
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      08-30-2012 09:30 PM #12
      Quote Originally Posted by jay3737 View Post
      misleading thread title is misleading!
      I don't think it's misleading at all. Regardless of features, price matters. If you take a standard FWD midsize sedan and price it out of the market, you're going to have a problem, especially when competitors have similar MPG without the need for a hybrid system.

      For me, bottom line is this: I'm an old-school GM guy, partially I'm nostalgic for the day when Centurys were as common as Camrys, and I'm frustrated that GM doesn't want to make Buick a volume brand again. I would be willing to forgive them if their current strategy appeared to be working. But looking at the numbers each month, it doesn't appear to be consistently working. Each time they add a new model, it just grabs sales from another model, instead of increasing the size of the pie. It just reminds me so much of Oldsmobile circa 1999.

      -Andrew L
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      08-30-2012 11:18 PM #13
      Quote Originally Posted by rimtrim View Post
      I don't think it's misleading at all. Regardless of features, price matters. If you take a standard FWD midsize sedan and price it out of the market, you're going to have a problem, especially when competitors have similar MPG without the need for a hybrid system.

      For me, bottom line is this: I'm an old-school GM guy, partially I'm nostalgic for the day when Centurys were as common as Camrys, and I'm frustrated that GM doesn't want to make Buick a volume brand again. I would be willing to forgive them if their current strategy appeared to be working. But looking at the numbers each month, it doesn't appear to be consistently working. Each time they add a new model, it just grabs sales from another model, instead of increasing the size of the pie. It just reminds me so much of Oldsmobile circa 1999.

      -Andrew L
      While your issue is understandable, I think there are a LOT of factors that aren't acknowledged here. Buick will never be a Toyota-type volume marque, and frankly, GM wouldn't want them too.

    14. 08-31-2012 12:48 PM #14
      So they really didn't raise the price at all; they just deleted the former base model.

      Yes?

    15. Senior Member dunhamjr's Avatar
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      08-31-2012 12:57 PM #15
      while they did raise the price.

      they didnt JUST raise the price. the put in tech that significantly improves FE.

      Still, Buick hopes that buyers will be drawn in by the improvement in fuel economy. While last year's base Regal returned EPA fuel economy numbers of 19 miles per gallon city and 31 highway, the standard eAssist four returns 25/36. Scroll down for the full press release.

      going from 19/31 to 25/36 in a Regal is a HUGE improvement.

      should they have tried to do it without jacking up the price? IMO, no. more features, better FE, mre costs on their end. price needed to go up.

      should e-assist be standard? nope.
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      08-31-2012 02:39 PM #16
      We don't sell a lot of "base" Regals anyways. The only trim moving out the door right now is the turbo and GS models.

      Base is more of a rental fleet vehicle.

      The Verano is the best deal in the Buick line right now anyways. $190 zero down lease for 24 months. Can't keep enough "base" models on the lot.

      GM knows what it is doing.
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    17. Member warren_s's Avatar
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      08-31-2012 03:46 PM #17
      Quote Originally Posted by rimtrim View Post
      I don't think it's misleading at all. Regardless of features, price matters. If you take a standard FWD midsize sedan and price it out of the market, you're going to have a problem, especially when competitors have similar MPG without the need for a hybrid system.
      eAssist isn't a full-fledged hybrid system like you see on competitve cars like the Fusion Hybrid. It's unable to motivate the car forward by itself, for instance... it's just a different way of doing an alternator. It provides a little bit of extra power (15hp / 79 tq) while accelerating, recharges itself through regenerative braking, and has a decent start/stop mechanism so that the car uses no gas while stopped. That's it. The battery is a lot smaller than what you see on full hybrid setups, so it's lighter and the major wear item doesn't cost so much to replace.

      The standard calculation people make with cost recovery is that the $2,000 additional cost pays itself off after 45,000 miles of normal driving. Most cars last a lot longer than that these days, so it's pretty much a no-brainer if you don't suffer from short-sightedness.

    18. Member curvedinfinity's Avatar
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      08-31-2012 03:50 PM #18
      Quote Originally Posted by ChiTownA34DR View Post
      We don't sell a lot of "base" Regals anyways. The only trim moving out the door right now is the turbo and GS models.

      Base is more of a rental fleet vehicle.

      The Verano is the best deal in the Buick line right now anyways. $190 zero down lease for 24 months. Can't keep enough "base" models on the lot.

      GM knows what it is doing.
      interesting...

    19. Member rimtrim's Avatar
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      08-31-2012 03:59 PM #19
      Quote Originally Posted by warren_s View Post
      The standard calculation people make with cost recovery is that the $2,000 additional cost pays itself off after 45,000 miles of normal driving. Most cars last a lot longer than that these days, so it's pretty much a no-brainer if you don't suffer from short-sightedness.
      Well, that would explain why the 2013 Malibu Eco has been such a smash hit. Wait, never mind that.

      The problem with eAssist is two things: (1) Competing cars get similar mileage without a hybrid system and (2) Price matters. By your logic, Toyota should cancel all models of the Camry except the Hybrid XLE, because it has such great features and mileage, why would anybody want anything else?

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      08-31-2012 04:02 PM #20
      $190 zero down lease for 24 months seems really good for a new reliable car.....it's so NOT my taste though that I couldn't do it

    21. Member rimtrim's Avatar
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      08-31-2012 04:18 PM #21
      Quote Originally Posted by ChiTownA34DR View Post
      The Verano is the best deal in the Buick line right now anyways. $190 zero down lease for 24 months. Can't keep enough "base" models on the lot.
      The great lease deals are an interesting phenomenon. I think it's an indication that the automakers are expecting used-car prices to stay high for the next few years. They're basically giving these leases away because they expect really high residuals when they come off lease. If they're wrong about that, they're going to take a bath on all these lease returns. But I think they're probably right. A big drop in used-car prices would require a big boost in new-car sales to take the pressure off the used market, and I don't see that in the cards soon.

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      08-31-2012 05:50 PM #22
      Quote Originally Posted by rimtrim View Post
      Well, that would explain why the 2013 Malibu Eco has been such a smash hit. Wait, never mind that.
      This has largely been because GM dealerships have been working through inventories of 2012s. GM has said that August will be the first month where 2013s should outsell 2012s.

      The problem with eAssist is two things: (1) Competing cars get similar mileage without a hybrid system
      Yes, they use other techniques like high-pressure turbos. The Malibu Eco does not have a turbo.

      and (2) Price matters.
      Didn't I just tell you that the $2,000 extra cost pays itself off after 45,000 miles, and then returns cost savings for the rest of the car's lifetime?

      Also, this is a $30,000 entry-level luxury car. People for whom "price matters" are not spending this much on a car... they'll be off buying $16,000 Fiestas instead.

      (or maybe not, given how poorly the Fiesta is selling... so much for Muallay being a business genius, huh?)

      By your logic, Toyota should cancel all models of the Camry except the Hybrid XLE, because it has such great features and mileage, why would anybody want anything else?
      Huh?

      That's some pretty dumb sh-t you just said there. Knock it off.

      I'm not presenting you with "my logic". What I'm telling you is that eAssist is not a full hybrid system; it's much closer to a traditional gas engine setup than it is to full hybrid systems like in a Toyota. The hint is right there in the name: eAssist. E. ASSIST. The Electric motor assists the gas one. It does not replace it! It's not at all like a Prius where the electric motor can move the car on its own.

      You really ought to know this already. This is old news.
      Last edited by warren_s; 08-31-2012 at 05:52 PM.

    23. 08-31-2012 06:26 PM #23
      when you show me the data you based your reasoning that this is a bad move, i'll accept your rant.

      until then, i will believe that GM has the data.

      if we sell x number of cars with price of xxxx or more, we make more profit than xx cars with price of xxx.

      They also have probably discovered that the average transaction price of the Regal is substantially higher than that of the base model, allowing them to bump while adding 'tech' (aka fancy and cheap).

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      08-31-2012 07:03 PM #24
      Quote Originally Posted by ChiTownA34DR View Post
      We don't sell a lot of "base" Regals anyways. The only trim moving out the door right now is the turbo and GS models.
      Yes.

    25. Member rimtrim's Avatar
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      08-31-2012 07:39 PM #25
      Quote Originally Posted by warren_s View Post
      This has largely been because GM dealerships have been working through inventories of 2012s. GM has said that August will be the first month where 2013s should outsell 2012s.
      Yes, but those 2013s will mostly NOT be the eAssist model, they'll be the regular 2.5 model. The eAssist is still a flop.

      Yes, they use other techniques like high-pressure turbos. The Malibu Eco does not have a turbo.
      The Altima beats the Malibu eAssist with no turbo and no direct injection. The 2.5 non-hybrid Camry comes very close, also with no turbo or DI. Get your facts straight. You could argue that the eAssist may get better real-world mileage, but the window sticker numbers are what sells cars.

      Didn't I just tell you that the $2,000 extra cost pays itself off after 45,000 miles, and then returns cost savings for the rest of the car's lifetime?
      Or you can buy one of the many competitors that DON'T charge you $2K extra for good mileage. If the base Malibu got 25/35 and the eAssist was at like 29/39, it would make more sense. But it isn't, and it doesn't. It's a crutch for the fact that the new 2.5 doesn't get the mileage it should.

      Also, this is a $30,000 entry-level luxury car. People for whom "price matters" are not spending this much on a car... they'll be off buying $16,000 Fiestas instead.
      Yeah, it's a $30K luxury car NOW that they slapped a $30K price tag on it I mean look at the sales numbers for this thing, it's a joke. There's no way they have a business case for making a next-gen model if it's going to return these kinds of numbers.

      (or maybe not, given how poorly the Fiesta is selling... so much for Muallay being a business genius, huh?)
      Well, that's for another thread but...Mulally's a management genius, I'm not sure he's a product planning genius.

      That's some pretty dumb sh-t you just said there. Knock it off. I'm not presenting you with "my logic". What I'm telling you is that eAssist is not a full hybrid system...
      The argument I'm making is not a technical one. I know exactly how eAssist works...I've been following it since it used to be called Belt-Alternator-Starter back in 2005.

      Here's the argument you're making: "They didn't just raise the price by $2K! They added cool features that are worth money! So it's really better!" My point was, that's the same as telling Toyota to cancel all but the top Camry, since the top model has so many cool features. But some people can't or won't pay for those features, regardless of how cool they are. After all, the ~$3-4K premium for a Camry Hybrid will eventually pay off too. But the Hybrid is still less than 20% of sales.

      As for the Regal GS being a hot seller...It may be, but it occupies a narrow niche. It's a hot seller compared to the rest of the lineup because they've priced the rest of the lineup out of the market. I'm so tired of hearing reasons why it's good for GM to sell fewer cars, as if the only other option would be to go back to 2002-era money-losing fleet dumping.

      -Andrew L
      Last edited by rimtrim; 08-31-2012 at 07:43 PM.
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