Friday, 30 June 2017

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?

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