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When you go to sell a used CR-V, you are not competing with the dealers trying to sell brand new models for the same price.
And, yes, CR-V sales are pretty much flat. Ford's sales are up precisely because they are bribing people to buy them. That's more or less what rebates are. If Ford weren't offering those rebates, sales would be flat or falling.
Not quite. They price their vehicles too high to begin with to maximize profits. I think you even started that conversation a while back.
In fact it's even worse now with all the incentives as they've (all three of them) all been gradually bumping sticker prices up to "fool" the consumers. According to an article, which I can't find again, I read last year, GM has been the biggest offender so far.
You really have to pay attention or you might not get the deal you think you're getting. It's not as simple as "take the money and run".
explorerx4,
I hear you. The only Escape deals advertised around here are for 2003 4 cyl models. You can get one for about $16,000 - $17,000 right now.
You either take the $1500 rebate or use the special financing (0.0%/1.9%/2.9%/4.9% for 36/48/60/72 months respectively) if you want to deal.
Since the '05's will be on dealer lots in about a month, you should start to see some more deals on the '04's I would think.
Can you,please, be more specific?
Generally, it starts with the dealers, who lower their prices closer to invoice. Then the manufacturers have to step in and artificially lower their invoice prices to keep the dealers happy. If they don't, the dealer stops making a profit on that model and stops ordering them.
The market has declared that the CR-V is currently worth close to the MSRP price. As Scape2 pointed out, a comparable Escape is likely to go for less (once the smoke has cleared and the sale is complete). So the market "values" the CR-V higher.
this price is HIGH for Honda CR-V(close to MSRP).
When I was shopping for CR-V in May 03, my dealer
sold 29 (!) Honda's in one day (it was Saturday).
He said if you'll buy it now it would be 30 vehicles sold in one day (and it was NOT the END of the day). Now, how you would negotiate the price with such a market demand?
Yes, there are some demand fluctuations, depending on time of the year and region, but general picture is clear: demand is high - which means the price is high.
Supply is also low. Honda cannot produce what Ford, GM and DC can. For example, and correct me if I'm wrong, Honda only produces CR-V's at one plant. Ford produces more Escapes in KC than Honda does CR-V's in its plant. Plus they build the Tribute in KC as well. Some people think they're getting something special if they have to be put on a waiting list for it.
If the supply were higher you would see more deals on the lower volume models. The Accord and Civic are more mass produced and you can always get a good deal on one because the lots are full of them. It might not be from a rebate but it's almost the same thing. Honda just does a better job controlling prices and they can. Ford wants to beat GM and to do that they have to play "follow the leader" and offer incentives. The consumer ends up losing out on resale value which is all part of the game.
People aren't just buying American cars because of incentives. But they are buying them now rather than later because of them.
That floor-mounted shifter, lower NVH, and revised interior is worth another test drive when they come out. I continue to be amazed and chagrined by dealer salespeople (and their bosses) who have no freaking idea that a new & improved, early-release 2005 Escape is coming in a few weeks. They just have no clue. The enthusiasts here on Edmunds are far more knowledgeable than the people who sell these cars for a living.
On the pricing/rebates/value discussion: Escape prices can go much higher than CR-V prices, so the fact that CR-V's have no rebates doesn't mean people spend more buying a CR-V than they do on an Escape. The CR-V maxes out at $23K, but the Escape can get up past $26K or even $27K. There's a $1500 rebate on them right now, and if we compared similarly equipped models, I suspect you'd find higher average prices paid for Escapes - not CR-Vs.
If you check out the CR-V Prices Paid & Buying Experience chat room, you'll see that none of these guys are paying anywhere near MSRP.
Rebates may or may not be in the long-term best interests of the brand or model, but that's irrelevant to buying decision. If you're comparing price, what matters is simply bottom line price vs. bottom line price. There's nothing cosmically unjust about rebates.
Odie
FWIW, Honda has two plants where they produce the CR-V, Swindon England and Saitama Japan. Both ship vehicles into the US. But because they also supply the rest of world, it's tough to measure demand in that manner. Honda is also building a small capacity CR-V line to supply southeast Asia in the region.
Furthermore, if demand were really that high, Honda could increase capacity. The Element line at Liberty OH was set to produce 40K units per year. They sold 67,000. If a bump in production is needed, they find a way to do it.
Scarcity is not the big reason for the $ paid.
Arizonajoe - We're not comparing the average ticket price. If you use the Edmunds TMV pricing tool, you can compare two similarly equipped vehicles and get a decent price quote. The issue is more in line with "that you get for what you pay".
The TMV price may also be higher than what you are seeing in the CR-V thread because those buyers have done research, educated themselves, and made a smart deal. That doesn't describe everybody.
You've kinda walked into the middle of an age old (futile) discussion. But we love it anyway. We're not really that interested in prices, so much as we bicker about sales. Sales do, to a certain extent, reflect the popularity of a vehicle. But there are many factors to consider, like advertising, dealership experience, and brand reputation (just to name a few).
Incentives are another one of those factors. They provide Ford dealers with a way to compete against the other products on the market. The Escape doesn't sell well because it's the best product, it sells because sales are subsidized. The CR-V, without any financial assistance, appears to be selling on the merits of the product (which is much sexier in the minds of an enthusiast).
I don't think I said it was a big reason but you have to admit that it does factor into the equation.
I thought there was a plant in England too but for some reason the Civic kept popping into my head.
FWIW I believe some of the rest of the world's Escape's/Maverick's come from KC as well. The Mariner and HEV Escape will start being produced there this summer too. Albeit in much smaller numbers.
But the CR-V doesn't suffer that kind of shortage. To the best of my knowledge Honda has not had any difficulty keeping a 20-30 day supply of CR-Vs. At least, not for quite a while. The Swindon plant began supplying CR-Vs to the states back in the late spring or early summer of 2002.
Bottom line: It is possible, but it's not the case with the CR-V. The CR-V's high price is most likely the result of its reputation, Honda's reputation, and product-based value.
And, yes, with both Honda and Ford producing vehicles for other markets, it would be difficult to make any kind of assessment about popular demand here in the states.
So it all comes down to Fords are a terrible value, Honda's appreciate in value. Honda's are perfect, Fords are garbabe scenario again. If the Escape/Tribute were such a terrible vehicle don't you think sales would have dropped?? Instead they are actually increasing... unlike the CRV...And don't forget.. the CRV has its share of recalls.. Kind of funny how this just gets swept under the carpet....
CRV is going to have even a harder time when the 2005 Escape makes its debut, along with the Chevrolet Equinox..
The CR-V class is the RAV-4, Escape, Tribute, VUE, Vitara, the Subarus,and others of this size.
The Escape does indeed sell on merit. There are plenty of buyers, like yourself, who bought it because the vehicle best met their needs.
That said, the thing that gives it an edge over much of the competition is the cash Ford puts on the hood. It's not the only thing behind sales. It's just the thing that puts them over the top.
The fact that Escape sales have grown sorta proves that point. Before the incentives, the Escape sold something like 130K units each year. Now that they've added larger incentives, sales are up even higher. Nothing else of grand significance was added this year, but the incentives.
Look at it another way. If the Escape was selling based on merit alone, why on earth would they discount it?!
As for the CR-V having trouble with the Equinox, I kinda doubt that, too. As Stevedebi pointed out, it's a bigger vehicle. Those who looking for a bigger vehicle with a V6 are going to be cross-shopping the Escape more than the 4 banger competition.
164,000 in 2001
145,000 in 2002
168,000 in 2003
A major reason for the growth from 2002 to 2003 is the addition of a plant: Ohio Assembly to provide added capacity. Certainly incentives played some part, but let's face it, $1,500 is nowhere near the $3,000 - $5,000 on some products nowadays. Escape carries a lower incentive than some other Ford products because it is a better seller and more popular than some other Ford products. Also, time in the lifecyle of a product has something to do with incentives. You can be sure that when the freshened 2005 comes out it will not have strong incentives, if any.
Lastly, let me quote from this week's Automotive News (1/12/04): "Honda revs incentives, ad spending" is the headline.
"Civic sales were down 4.3% last year while Honda Divsion's overall car sales slipped 2.7%. Honda will pay dealers $400 for each Civic they sell through March. If dealers meet certain company sales goals, HOnda will boost payments to $800 per Civic, retroactive to Dec. 20, when the program started."
The Escape carries a higher incentive than other vehicles in the class.
An extra plant can produce more sales if the existing plant/s could not keep up with demand.
tidester, host
That would make sense if sales had risen appreciably above prior years. But, that isn't the case here.
Liberty
VUE
Tracker
About equal to:
Santa Fe
Higher than:
CRV
RAV4
If there was no demand or the level of incentives was so high that it was unprofitable for Ford, then they would not build the extra capacity and the extra capacity would not lead to sales.
On the increased capacity, that only makes sense if there is sufficient demand. If there were sufficient demand, why the incentives? Incentives are used to create demand, when the product cannot do the job on its own. The cash incentive is currently $1,500 for the 2004 model, but it was $2,000 for a few months in 2003 (which is the year for those sales figures). Plus more generous loan deals than any offered by Honda.
In this case, Ford apparently increased capacity, then issued incentives so they could meet it.
On the Hondas... I'm not sure what incentives for the Civic have to do with the CR-V. The CR-V has no cash incentives. They still sell at close to MSRP in many places.
"In this case, Ford apparently increased capacity, then issued incentives so they could meet it." I don't disagree - however it's still a sound business decision for Ford assuming they are net more profitable.
As far as the Civic example - many assume that Honda's in general have no incentives, which is not the case - that's all that was meant to show.
In addition, there are different ways to provide incentives: customer cash, APR, dealer cash, lease support, etc. Just because Ford's incentives are more visible, doesn't mean that Honda or others don't have incentives.
In other words, you may lose money on every sale but you make it up on volume :-)
"Through November 2003, incentives by the domestic automakers averaged $3,310 for each vehicle, compared with $2,440 in the period a year earlier, according to Edmunds.com. That compared with $941 a vehicle from the Japanese brands in 2003, which have lower incentives for a variety of reasons, including better quality reputations and favorable exchange rates."
Big Three Hope Rising Economy Will Lift All Vehicles (The Ledger)
Steve, Host
Which MY? The '03's had a $2000 rebate on them in Nov. or Dec. of last year. The 04's have ranged from $0 to $1500 since they started showing up on lots last July.
According to Edmunds zip code 48226, metro Detroit, brings up a $400 college grad rebate on both the '03 and '04 Escapes. However, I think the last round expired yesterday to coincide with the NAIAS and the new one's haven't hit the web yet. Maybe later today.
Ford still has the $1500 national rebate listed for the '04's on their site.
FWIW they were offering an additional $500 "auto show bonus cash" on all FMC products last week if you are an X-Plan customer. Maybe that's where you're getting the extra $500?
"You can be sure that when the freshened 2005 comes out it will not have strong incentives, if any."
I don't agree. If the Equinox does in fact compete heavily with the Escape, Ford is going to match GM's incentives for that model. And you know they'll start it out at something crazy like $2000 too!
Chevy is their main competition and they won't want to lose a sales war with them. That's the way it really works.
Also, I'm not sure why you guys are arguing about increased production due to a second plant. If I recall correctly, the Ohio plant has not started producing anything yet and most likely won't until the Mariner is set to go in the summer. I could be wrong though.
KC is the lone line for the twins right now.
varmint Jan 7, 2004 6:12pm
Steve - I doubt very much that the Escape is in the position of not making a profit. It's true of other vehicles (like the Taurus), but, as Carguydc pointed out, the incentives on the Escape aren't as high as they could be. Though, the $3K-5K incentives he mentioned can only be applied to the high profit/low cost models like truck-based vehciles. The profit margins on cars are typically much lower and I expect the Escape is closer to cars in that regard.
Baggs - I was under the impression that Ohio hadn't started, either. But I figured Carguydc might know something we didn't. Thanks for setting that straight.
As for increased production in 2003 (largely due to addition of second plant) - source: Automotive News
2002 production: 198,244
2003 production: 221,378
production increased 12% in 2003
sales increased 15% in 2003
Sales numbers do matter. Sales = profits and market share. For all we know Ford can be raising the "retail price" of the Escape, throwing a $1,500 rebate on the vehicle to make it look like a great deal and still be making a nice profit. Don't forget, Ford mass produces 3 or even 5x the amount of vehicles Honda does...
Ford, the company, has not made a profit on its auto division in quite a while. The company has been more or less breaking even thanks to the efforts of their financial division.
With regard to profitability, you can't lump the Ford "auto division" all together. Clearly Ford continues to do extremely well in Trucks and SUVs. The new F-150 and the SUV lineup do very well and I'm sure are very profitable for Ford.
The cars are another story. There are not a lot of buyers that want a Taurus. What sells them are the deal and sales to rental fleets.
However, Ford has announced the "Year of the Car" and showed what it is doing to revatilize the car lineup:
Refreshed Focus
New Five Hundred Sedan
New Freestyle Crossover
New GT supercar
New Mustang
and of course, refreshed Escape and new Escape Hybrid on top of that.
These new products look pretty good and I think Ford's turning the corner on their car problem. The new Mustang in particular looks great. I may have to get one to go along with my Escape Limited!!!
You're right. 45,000 additional units (Escape only) were planned for MY 2004 at the Avon plant. That's in addition to the 260,000 Escapes and Tributes produced (planned as well) at KC.
Now from what I gather the Mariner will be produced at Avon along with "extra" Escapes. All other Escapes, all Tributes, and all Hybrid Escapes will be produced at KC.
I had originally thought '04's would be scarce due to the early release of '05's but I guess the extra plant will help make up for the six months of lost production for the '04's.
I for one wouldn't buy an '04 having seen the '05's though. Pricing shows that the '05's don't cost much more either.
With regard to profitability, you can't lump the Ford "auto division" all together. Clearly Ford continues to do extremely well in Trucks and SUVs. The new F-150 and the SUV lineup do very well and I'm sure are very profitable for Ford.
The cars are another story. There are not a lot of buyers that want a Taurus. What sells them are the deal and sales to rental fleets.
However, Ford has announced the "Year of the Car" and showed what it is doing to revatilize the car lineup:
Refreshed Focus
New Five Hundred Sedan
New Freestyle Crossover
New GT supercar
New Mustang
and of course, refreshed Escape and new Escape Hybrid on top of that.
These new products look pretty good and I think Ford's turning the corner on their car problem. The new Mustang in particular looks great. I may have to get one to go along with my Escape Limited!!!
Interesting, but too many things don't seem right to me.
For example, Mercury is at the top of the "underrated" list while Ford, who produces the Mercury vehicles on the same assembly lines with different sheet metal and interior materials, is much lower. I guess you could view Ford as the baseline for quality if you believe those graphs.
I've always argued that their vehicles are average and don't excel or fall behind in any one area like some other brands. Maybe I was on to something!
I drove my grandmother's 02 Crown Vic all of last week. What import does this car "compete" with? It has a mushy ride, a loud engine , and horrendous fit and finish with lots of rattles. I was so happy to park it back in her driveway.
The big changes for the 2005 model are the floor mounted shifter, the new Intelligent 4WD System, and all-new 4-cylinder for the base XLS model. It's also supposed to be quieter, have revised automatic shift points, and a smoother ride. The V-6 is supposed to idle more smoothly. I also noticed that the HP output for the V-6 went DOWN - by 1 (201 to 200) and the torque dropped as well (196 to 193). I have no idea why they would go backwards in their engine tweaks.
I'm going to test drive it next month. The big disadvantage compared to the CR-V EX is that an XLT 4WD V-6 Escape will cost much more - about $3,000 more. The XLS 4-cylinder will probably match up well in price to the CR-V, but the V-6 is a huge and compelling advantage - I just don't know if it's worth $3,000 though. Incentives could narrow the gap, but they won't be very large for a new model - maybe $1,000 tops.
she is leaning(quite a lot) toward an escape.
bottom line is, they are a lot more expensive than a crv. but people are buying them.
i can't even get her to look at a crv.
they are not well styled, but not even a look?
element, not either.
This is what Ford can do and Honda cannot. Ford has the ability to give the consumer choices. Choices in colors/models/options/configurations. And Ford can do this at a much lower price than Honda.
The 2004 has a steering column mounted shifter, and I hate that. The floor mounted shifter is a huge advantage. Honda should follow suit.
I actually like Honda's way of including lots of options, and eliminating the a al carte mess. All EX's come with side airbags for example. This is huge. With the Escape, I have to run around and find one so equipped - it's not standard on any trim level, not even the Limited. And they'll usually have a bunch of other options I don't want, like leather or power roof. So my price above was for the Escape equipped as I want - it's somewhat unlikely I'll find such a vehicle in dealer inventory. More likely, there will be extra options that I'll be forced to pay for. So realistically, we're looking at an MSRP well beyond $26,000 for an XLT V6 4WD.
Check out a Tribute. Or an Equinox. I'm SURE GM will have incentives on the Equinox. I got an invite yesterday for a 24 hour test drive with a coupon for $1000 off. (Coupon is only good for name on it.)
I convinced my dad to retire his beat-up 94 Ranger 4x4 and to get a 2000 CR-V EX (w/ about 40,000 miles) last year to serve as his rural mail delivery car. He kept the Ranger just in case the CR-V wasn't tough enough to take the beating. Just over one year later and the CR-V has not "called in sick" once!
He also appreciates the less expensive 205 tires on the CR-V that he needs to replace quite frequently (man his route jsut devoures tires!) vs. the 235's on the Ranger and the Escape V6.
If the CR-V is tough enough to handle my Dad's mail route, I'm sure it can handle just about anything some soccer-mom will tackle.
I'm a little Honda biased in that I've only owned Hondas. I've always wanted a CR-V, but always have had "hand-me down Hondas" from my family. I'm due for a new car soon and I want to get a CR-V, but my main concern is that I drive a lot for my work and gas mileage is important to me. I average about 30k a year for work. A compact SUV is what I'm looking for and I was interested in the Escape Hybrid, but I've been looking at Consumer Reports for the last 2 years and the Escape has not been getting great reviews. I'm attracted to the hybrid for its promise of good gas mileage. But I wonder if it's worth it to get one, 1) new car, no reliability reports yet, 2) cost, 3) maintenance and longevity?
Thanks for any help you can give me.
You might be interested in the Is it time to buy a hybrid? Are they up to the chore? discussion in News & Views.
tidester, host