To Trim Prices, Automakers Dropping Content

October 14, 2011
When it comes to selling cars, one tried and true method to move inventory is this: drop the price. In the past, manufacturers often did so without de-contenting, since margins were usually strong enough to absorb a hit on selling price.

Faced with higher production costs and stronger competition from global brands, that’s not always the case today. Instead, manufacturers are still slashing prices, only now they’re quietly trimming content from cars as well.

USA Today uses the slow-moving Nissan Murano Cross Cabriolet as an example. In 2011, the base price started at $46,390, but Nissan cut the base price to $44,540 for the 2012 model year.

What’s missing? The navigation system, which is now available as an option, priced at $1,850. In other words, 2012 Murano Cross Cabriolet, identically equipped, costs the same as it did in 2011.

The same thing happened with the Chevrolet Volt for 2012. GM cut the price by $1,000, but deleted the navigation system as a standard item. Adding it back in costs $1,995, or $995 more than the $1,000 saved. In other words, an apples-to-apples Chevy Volt is more expensive in 2012 than it was in 2011.

Sometimes manufacturers cut prices for bragging right alone. In 2011, the cheapest Dodge Journey equipped with a third row seat cost $23,240, which was $145 more than the next-least-expensive three row crossover, the Kia Sorento.

Dodge wanted to offer the least expensive three-row crossover for 2012, so they trimmed features to get to a $19,990 starting point. If you want amenities like roof rails or sunscreen glass, you need to buy the $2,000 SE Quick Order package, and all Journey option packages have gone up in price for 2012.

The bottom line is this: if you’ve had your eye on a particular make and model and suddenly find it thousands cheaper than it was last year, there’s probably a reason for that. Before signing on the dotted line, make sure you know exactly what you’re getting for your money.

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