Honda's new hybrid not as cheap as expected
Cheaper than the Civic hybridThere has been a lot of sketchy information coming out of Honda when it comes to their new dedicated hybrid-only vehicle. And, new statements from the AP are no less clear, particularly when it comes to cost.
In a speech at the Center for Automotive Research Management Briefing Seminars Richard Colliver, executive vice president of American Honda Motor Co. confirmed everything we already know: Honda will launch the new 5-door, 5 passenger hybrid next Spring. Yet, in terms of costs, Colliver would only go so far as to say that it will be cheaper than the Honda Civic hybrid($22,600).
That seems a lot less confident than some of the $19,000 predictions of a few months ago. I'm betting no less than $19,999.
Labels: Honda, honda civic hybrid, Hybrid Vehicles
posted by Dahcredyns at
8:19 AM
16 Comments:
This seems to be at least $1,000 cheaper than a Prius. Plus a tax credit of more than 1000. This could be a lucrative deal.
That's too bad...I refuse to pay over $20K for a car.
What about 500 thousand for a condo? Or 300 dollars/hour for a laywer :-)?
Economics 101 - Market determines price. Why would they price it so much less than a Prius for essentially the same product? Even more so, in a market so short in supply that dealers scalp buyers, why leave the money for the dealers. Either way, the consumer is driven to the same price. Better the manufacturer turn it into development than the dealer cornering the market on plaid jackets and local politicians ;)
I agree, KP. If demand remains high, dealer markups, not MSRP, will determine what consumers pay. Honda dealers have already proven, just as Toyota dealers, that they will use markups.
I also agree that I'd much rather have this markup price go back into manufacturing, not the pockets of car salespeople.
I don't agree. Market does not dictate price. The housing market is a perfect example of how warped psychology, crooked lending practices, and unlawful real estate deals completed screwed up the pricing.
Same goes for cars. When it comes to necessities (housing, mobility, food, water), the market pricing does not apply. You can force people to pay whatever you want if they need it or feel they need it.
Look at fuel...we have no choice but to pay for it to maintain a lifestyle that we have.
Ultimately there is the choice to walk away from that price and lifestyle. It doesn't make it a favorable or fair choice, but as long as there are enough people that will pay a high price and consume the supply, those who can't pay it are out of that market.
That is our economics. You just have to look at it in a broad enough sense of market size and time. That is capitalism. I'm not defending it, but that's the system our country defended through the Cold War.
That's the system our country defended through the Cold War.
Capitalism is not that simple. I agree to Nozferatu that free market on necessities does not always work. There is even a term "market failure" to denote such a situation. The medical insurance system is a good example of market failure.
My point is that $20,000 is not much assuming that it would save you 500-1000 dollars every year and (hopefully) will have an excellent reselling value in 5 years.
Finally, cars in US are really really cheap. In many countries you will pay 50-100% more for the same model.
LB:
Car's in the US are very cheap because they want you to have one and also be in debt....how else are they going to enslave people who don't think they are enslaved?
That's the best form of slavery...not even being aware of it.
Noz-
The hybrid market is dictating markups. Demand has meant that MSRP doesn't matter.
Similarly, oil prices are going down because prices finally pushed down demand.
I think the key is supply and demand manipulation.
For instance, there are 100s of years worth of diamonds in storage, but only so many are released per year to keep supply low and therefore demand and pricing high.
So, there is almost always manipulation in market forces.
Thus, Honda saying they might produce a hybrid with a lower MSRP than a Prius is irrelevant if dealers add markups. Perhaps Honda will try to limit markups, as Toyota once tried with the launch of the 2nd gen Prius. If not, then this pricing marketing is disingenuous.
Otherwise, demand will have an impact on hybrid pricing. That is market forces, perhaps manipulated market forces, but still market forces.
Still, I'd argue huge markups are unethical as that extra money doesn't go back into creating new supplies, but that's just one of the downsides of capitalism.
Profit too often becomes more important than people. Then again, is that the fault of capitalism or of people?
This post has been removed by the author.
CHAD:
Sorry I had to repost due to some brainfarts in spelling and grammer!
But back to the topic! I disagree. The profit margin on these cars is rather large to begin with. There's no real justification for a 15-20% mark-up on cars like this. This is gouging...not supply/demand.
As for fuel, I frankly disagree there too. Overall fuel demands are way up. Yet the prices here are down? These are not local phenomenon. They are altered artificially in my opinion.
I truly believe that the free market is not as free as people want to believe. I also truly believe that demand/supply is a created phenomenon that is used as an excuse by the people nudging/dictating/controlling prices so that the rest of us can have a reason to blame it on.
Yes...there are items/goods/whatever that people will or will not buy and companies change course according to such things...no doubt.
But with essentials, there is no free market. There is leeway in pricing and what not...but come on, let's be honest. demand/supply of fuel/housing/etc doesn't change like this overnight.
There is no justification in my mind to such price hikes other than pure greed and price gouging.
10:37 AM
But I have to say I think we are on the same page overall!
" The profit margin on these cars is rather large to begin with. There's no real justification for a 15-20% mark-up on cars like this. This is gouging...not supply/demand."
I'm not sure that's true. There are still many auto analysts that claim that Toyota still doesn't make money on the Prius, outside of halo marketing.
Small vehicles sold in the US, in general, are far less profitable than SUVs and trucks, which is why the Big 3 have done everything possible to stay out of the small car market.
However, when you add the hybrid markups, I agree, that is price gouging.
Of course, the auto industry has been price gouging consumers with SUV prices for years (profits at one time were as much as $10,000), so I guess we shouldn't be surprised.
Car's in the US are very cheap because they want you to have one and also be in debt....how else are they going to enslave people who don't think they are enslaved?
That is unlikely to be true. How do you enslave someone here with $10,000-20,000 credit? Many people can pay it of in a couple of years. The real slavery comes with buying a home.
I think that cars are cheap because the supply outweighs the demand.
As to the gasoline demand. I also don't think that it has been increasing for the last 2 months. The demand in US has definitely decreased (as in some other countries) and the growth in China and India has not compensated this decline.
That is unlikely to be true. How do you enslave someone here with $10,000-20,000 credit? Many people can pay it of in a couple of years. The real slavery comes with buying a home.
Yes I agree...a home is the biggest slave hole.
But consider...the average price of a car WAS roughly $28K in the US with finance charges back in 2005.
A vast number of people I know are buying cars well in excess of $30K. These same people have payments well over $600 a month + insurance.
Most people here have at least two cars...so $1300 a month for two cars + fuel will be aroudn $1700 for two cars...outrageous. Even if we say each car payment is $400 a month, we're talking about $1300-1400 a month two Honda Civics.
To me, this is slavery. Most people need a car here in LA or I should say they won't want to do without it.
There are SO MANY people in Glendale alone who run around in brand new BMW's, Infinitis, etc it's ridiculous. Most of them lease...which is even more ludicrous.
My wife and I make 6 figures combined and I STILL shudder at the thought of paying anything above $20K or $300 month for a car. It's just ridiculous IMO.
I think that cars are cheap because the supply outweighs the demand.
As to the gasoline demand. I also don't think that it has been increasing for the last 2 months. The demand in US has definitely decreased (as in some other countries) and the growth in China and India has not compensated this decline.
I'm sure if that's correct. From what I've been reading, China's demand alone has replaced any drop the US has seen...which really isn't much. Regardless, none the changes we are seeing are drastic enough to warrant such ludicrous price fluctuations and jack-ups in pricing. It's all fixed and highly manipulated IMO.
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