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TXsalesguy
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notyper wrote:
Yeah, the Civic has lease deals that are better than any other competitor. You can get a $19.5k MSRP Civic for $300 less down and $10/month less than an $18.5k MSRP Elantra on a 36 month lease.
I use the Elantra as an example because Hyundai, as much as I don't like them, has seen incentive levels drop as their popularity has increased. Their resale values have also come up to the point that they are very close as well (the Civic is atop KBBs numbers, the Elantra atop ALG). That means that Honda is having to eat it on the leases to hit that price. That's an incentive. That's money they aren't making. It's pretty simple math. You don't even need a calculator to get the gist of it. And don't forget the $500 dealer cash as well - something that doesn't have to be offered on the Fit or CRV.
But feel free to compare to other competitors out there. None are newer than the Civic and none have the kind of deals that Honda is offering on the Civic. This is exactly the time (new product) when Honda shouldn't be having to undercut the competition on pricing.
Oh, and one more thing. Bite me sales boy.
SC
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A lease payment is calculated on the difference in sales price and the residual set 36 months down the road. A car with a high resale value is given a higher residual. There is a smaller gap from sales price to residual, thus a lower lease payment. All your Hyundai argument proves is that the Civic has a much better resale value than an Elantra.
Yes, Honda has had 0.9 and 1.9 on core models much of the year. Do you realize from my perspective how difficult that is when customers throw in our face that Toyota and other manufacturers have 0%?
And thank you for pointing out that there is $500 dealer cash on Civics. Whoop tee doo. At least you have that down. Take into account that Honda raised the MSRP on all vehicles about $120 and the invoice even more as AVHM has mentioned and that $500 starts looking more like a shell game.
I responded to your post because we have had posts on other threads here where people were claiming thousands per car. So my upside the head comment should have been directed to others making such claims earlier. Your post was in the same vein which led to my comment here, but I have been warned by others here that you are TOV royalty and it is improper to take you to task, so I humbly bow to your superior intellect and knowledge and grovel in your presence.
On other thought, no I don't. You bite me ricer boy.
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DCR
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Hopefully the user name "TXsalesguy2" is available.
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A77
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DrWhiner wrote:
A77 wrote:
Back in 06 and 07 we had for instance no incentives on Sis at all - rates were like 6%+ for 60 months, no cash incentives. I remember selling one for over $30,000 pre tax. Then again I sold an Accord for $47,000 pre tax....(I double checked it in case my memory was fading). Better days for sales people - and this was msrp - no mark ups here.
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You sure it's not a typo? What dollar is it? I assume it's not Sing. dollar, NZ dolla, taiwanese dollar or trinidad/tobago dollar. : p
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Canadian dollar - it was an accord hybrid with quite a few accessories and a rear DVD system. The base car still retailed at over $40,000. Have to remember also that in canada prices have fallen every year since at least 2006. A gradual process reflecting market conditions and the generally strengthening of the Canadian dollar. In myu memory i sold that car at $44,000 but check ed the bill of sale and found it was $47,000. But arund that time I also sold Odysseys Pilots and Ridgelines for $54,000 (pre tax). Its almost impossible to make money now - especially as while sales of CRVs and Civics are good there's far less margin in them.
I think it was me commenting on the civic's ride and how customers universally preferred it - I could have added how the old civic had serious bounce problems in the back when loaded, and how much better the new one is in this respect. That was an excellent commentary btw lightbulb.
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xBeastx
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superchg2 wrote:
atomiclightbulb wrote:
I guess I am used to the days when Honda tried to stay ahead of the pack. The fact that this car did not come to market with a 6 speed automatic, for example, is an improvement that would have had benefits in performance and fuel mileage. Perhaps the CVT will replace the 5 speed automatic when Earth Dreams take over?
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I think the ED CVT will replace all 5-speed autos paired with 4 cylinder engines. A 6MT will replace all 5-speed manuals, and the 6AT is for any V6 in Honda's lineup. I could image the MMC of the Odyssey and the new Pilot having a 6AT on all trims, not just the Touring. I think I have enough proof to support my claim, too. As you can see on the current Accord spec sheet, everything fits my predictions. Also, the refreshed Crosstour is confirmed to have a 6AT for the V6 and a 5AT for the 4 cylinder, however those are not ED engines. The only non I4 CVT pair that I could see is the CR-V and Crosstour 4 cylinder.
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TXsalesguy
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DCR wrote:
Hopefully the user name "TXsalesguy2" is available.
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Go ahead and delete me entirely. Tired of the squabbling and nitpicking here anyway.
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A77
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bit old, but it'll for comparison purposes - in Canada Feb 2012 48 month lease residuals...
Civic 50%
Corolla 46%
Sentra 40%
Jetta 53%
Elantra 42%
It's more horrible for Hyundai on the SUV front - CRV was 52%, Tucson 36% (Escape 35%).
Accord 45%, Sonata 35%.
Why would anybody lease a Hyundai?
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danielgr
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notyper wrote:
Yeah, the Civic has lease deals that are better than any other competitor. You can get a $19.5k MSRP Civic for $300 less down and $10/month less than an $18.5k MSRP Elantra on a 36 month lease.
I use the Elantra as an example because Hyundai, as much as I don't like them, has seen incentive levels drop as their popularity has increased. Their resale values have also come up to the point that they are very close as well (the Civic is atop KBBs numbers, the Elantra atop ALG). That means that Honda is having to eat it on the leases to hit that price. That's an incentive. That's money they aren't making. It's pretty simple math. You don't even need a calculator to get the gist of it. And don't forget the $500 dealer cash as well - something that doesn't have to be offered on the Fit or CRV.
But feel free to compare to other competitors out there. None are newer than the Civic and none have the kind of deals that Honda is offering on the Civic. This is exactly the time (new product) when Honda shouldn't be having to undercut the competition on pricing.
Oh, and one more thing. Bite me sales boy.
SC
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Hyundai is not dropping incentives because popularity has increased, they are dropping them because right now they are capacity constrained in the US. That is something well known, and has been predicted for a while. When you have more capacity to build cars and want to sell them you need to spend more in incentives, not because your car is less able, but because you want to move larger numbers. Honda is right now coming back from a dreadful 2011 where they lost about 40% of their annual production capacity, so sure they are eager to catch back. I don't think they'd had any troubles outselling the Elantra while matching their incentives, but that's not the aim, the aim this year is to grow well above 4Million cars globally and about 300k Civics in the US.
The point is not so much the incentives per car, but how much money you make per car and how many you sell. Because the MSRP of a car is fixed, but the cost that each car costs to make depends on the factory occupation ratio (the more you build the cheaper each unit). You may be losing more money by selling at sticker with no growth strategy than by selling a bit bellow while growing. What matters is the balance, and judging by Honda financials it seems that in their case that balance is pretty healthy.
Obviously the problem comes with uncontrolled growth, when you get overcapacity like Detroit3 used to have, and need to sell your cars at a lose not to close your factories and fire your people.
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notyper
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You don't think I know how a lease is calculated? It's simple math.
The Elantra is atop its class in the ALG residual value numbers for 2012 which would indicate a better residual than the Civic. ALG measures a 3 year residual which is most appropriate for the 3 year leases as discussed. KBB uses 5 year residual to pick its winners and the Civic is ahead there.
Do some basic math. At $19.5k selling price and a 60% residual after 3 years, the Civic is going to be worth $11,700 + the value of payments and such at 35*169 + $1999 = $19,614. That's not a NPV calculation mind you, but it's useful enough for our purposes.
For the Elantra, $18.5k selling price and 60% residual you have $11.1k + 35*179 + $2299 = $19,664. So Hyundai is actually taking in more money on a lower priced car. Even if you were to assume that the 3 year residual on the Hyundai was dramatically lower, say 55%, Hyundai would still be doing better ($18,739 on a $18.5k car).
But the real issue here is that you have a bug up your ass about people mentioning increased incentives on the Civic. Well deal with it. Honda has increased incentives - you can argue about why, but you can't argue that they haven't. And they've increased them at a time when they shouldn't need to (new model launch). Whether or not you consider that a good thing from your job perspective, I don't know or care.
Nice try on the insult, but you might want to sub an "a" for the "i" next time - at least you'd be more accurate. Would have been simpler just to apologize for insulting my knowledge as a surrogate for all those other folks you're bitching about, since you didn't have anything to refute my statement that Honda is putting money and incentives on the Civic to move them. Hardly what I'd call taking me to task. Next time, if you disagree, post some facts - you should have better access to them than most on this topic.
And no, you don't deserve to be deleted. Only long time offenders get that. I don't see anything in your posting history to suggest you're a problem here like Powered by Honda was. But if you're leaving, good luck.
SC
p.s. to danielgr from another post - Supply and demand. Demand has gone up, Hyundais residuals have gone up and incentives have gone down. Your post had nothing to add to this topic - not that it was unexpected.
TXsalesguy wrote:
A lease payment is calculated on the difference in sales price and the residual set 36 months down the road. A car with a high resale value is given a higher residual. There is a smaller gap from sales price to residual, thus a lower lease payment. All your Hyundai argument proves is that the Civic has a much better resale value than an Elantra.
Yes, Honda has had 0.9 and 1.9 on core models much of the year. Do you realize from my perspective how difficult that is when customers throw in our face that Toyota and other manufacturers have 0%?
And thank you for pointing out that there is $500 dealer cash on Civics. Whoop tee doo. At least you have that down. Take into account that Honda raised the MSRP on all vehicles about $120 and the invoice even more as AVHM has mentioned and that $500 starts looking more like a shell game.
I responded to your post because we have had posts on other threads here where people were claiming thousands per car. So my upside the head comment should have been directed to others making such claims earlier. Your post was in the same vein which led to my comment here, but I have been warned by others here that you are TOV royalty and it is improper to take you to task, so I humbly bow to your superior intellect and knowledge and grovel in your presence.
On other thought, no I don't. You bite me ricer boy.
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HondaFan1990
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I think we should all just cool down a tad on here. Some very valid points and arguments have been made while discussing the Civic and Honda in general. The 9th gen of the Civic is probably the most hotly debated topic concerning Honda among other things. It's as if people take sides, to some degree, those who don't see it as an epic fail and the stuff it actually does well or better than the 8th and those that see it as a total regression in every way.
Now regarding sales, IMHO, only salesman actually selling the cars and talking to actual consumers should have much to say about the cars sales performance. From what I see, Honda is doing things that they normally haven't had to do to sell cars and this seems troubling to Honda fans. What we have to realize is that Honda is not the same they were in the past and neither is the climate of car sales. Honda used to didn't have much competition before, now they have a whole army against them. Before just selling the Civic or Accord was enough. Now they have to put some money on the table along with having a good product. You gotta do what ya gotta do to stay alive. It may not be what you want to do, but It's what you may have to. Plus, some people should honestly not put Honda on such a pedestal as they have as if Honda can do no wrong or as if certain things are beneath them. I think this is where problems come in when Honda actually does do something they haven't or something controversial. Honda is a company that's not without problems and troubles like any other company. Plus, they're headed by humans and humans are imperfect and make mistakes. I have a feeling that once Honda gets their feet back on the ground solidly, they will not have to use more desperate approaches to sell cars.
Lastly, Honda knows they can't sell on the name Honda anymore and that they gotta play the hand they ate dealt while reminding people the Honda name still means something good.
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superchg2
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HondaFan1990 wrote:
Honda used to didn't have much competition before
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I hope your college English teacher isn't reading this!
:)
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HondaFan1990
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superchg2 wrote:
HondaFan1990 wrote:
Honda used to didn't have much competition before
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I hope your college English teacher isn't reading this!
:)
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I know they're proud of me for that if they are Hahaha English fail lol
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Grace141
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So to sum up what was an interesting discussion:
- It's believed that both the Civic and Elantra are production capped.
- The Civic has a higher incentive dollar amount going in the US at the moment than the Elantra according to the data available.
- It's somewhat known that Honda planned to produce less expensive cars for the US after the 2008 collapse whereas Hyundai has ramped up the value of its products.
- The car in the martket segment judged least likely to be the sales leader has proven otherwise during several months.
If the above is all true including presumably production being at its most efficient levels for both cars Honda wins this one.
- How would you like to be Hyundai at the moment knowing you've dumped mountains of cash into the current product blitz and you've been at least matched by your competitors because of factors far beyond your control?
- Is the point of the residual value numbers simply that Hyundais should be purchased only by people who want to own them for three years or less? Isn't that how so many Americans got themselves into financial problems in the first place?
- If Hyundai builds another production line or adds an additional shift somewhere for the Elantra is it guaranteed that Elantra sales will jump a corresponding percentage? Or should they stick with their current production and reduce their incentives?
It's my opinion Honda is seeing delayed purchases of the Civic by people who wanted to buy a new Civic last year but couldn't. I suspect the Civic's numbers will drop a bit during the next few months even with the current transaction pricing.
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TXsalesguy
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notyper wrote:
But the real issue here is that you have a bug up your ass about people mentioning increased incentives on the Civic. Well deal with it. Honda has increased incentives - you can argue about why, but you can't argue that they haven't. And they've increased them at a time when they shouldn't need to (new model launch). Whether or not you consider that a good thing from your job perspective, I don't know or care.
Nice try on the insult, but you might want to sub an "a" for the "i" next time - at least you'd be more accurate. Would have been simpler just to apologize for insulting my knowledge as a surrogate for all those other folks you're bitching about, since you didn't have anything to refute my statement that Honda is putting money and incentives on the Civic to move them. Hardly what I'd call taking me to task. Next time, if you disagree, post some facts - you should have better access to them than most on this topic.
And no, you don't deserve to be deleted. Only long time offenders get that. I don't see anything in your posting history to suggest you're a problem here like Powered by Honda was. But if you're leaving, good luck.
SC
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Since you are checking on whether I am worthy or not to post here, go back and check where I refuted people claiming Honda had some inflated number of incentives on each car... something like $2800, when in fact is much less, like the current $500 on the Civic (I think Civics only had $400 when that post was written, but not going to go look it up to win an argument here). Your opening statement was exactly in that vein. I don't think $500 is a huge incentive. Should they be doing it in the first year? Maybe so, maybe not, but this isn't anything new. The Pilot got a huge $2,000 cash incentive just a couple of months after the new 2009 debuted in the spring of 2008. Now four years later, it has a $500 dealer incentive and we are having trouble keeping them in stock. Dealer incentives have been around for a while and nothing to get all up in arms about, IMHO.
I do think I will take a break from posting. Sorry, I am not quite in the groove of who is who around here. Apparently I took the wrong person to task. Don't make a habit of checking profiles to see who is who. To see you are part of the staff of this site and then to be derided with an insulting comment like "bite me sales boy" well, I will bow out and let you guys hash out Honda's future. I will stay here in the trenches keeping the boring things rolling so hopefully the company will be in a position to do all the things you guys want them to do. Mostly stuff that will sit on the showroom gathering dust, like the 2008 S2000 CR that sat on the showroom floor well into 2009.
Have enjoyed Jeff's articles, have really enjoyed Andrew AVHM and Montechester's posts in particular.
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rev2damoon
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^Oh please. Just stop with the melodramatics and PLEASE just stop trying to insinuate that we enthusiasts don't buy Honda's sport offerings. We do buy them when Honda builds them right (see 8th gen Si, S2000 and others). Conversly, we will not buy them when Honda screws up (see EP3 Si). Going back to the S2000, it's practically a certainty that sales would have stayed strong, had Honda bothered to give it a proper replacement. They did not. They let it languish without significant updates for too long and eventually killed it off entirely.
So please, none of your BS, salesman. Nice try though.
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saitamahonda
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Honda's average incentives were much less than the other manufacturers.
http://www.just-auto.com/news/june-incentives-stable-edmunds_id124620.aspx
Click Show Press Release and you'll see the comparison numbers.
Compared to 2011, Honda increased their incentives about $200-$300.
When it comes down to it, when the bottom line price is about the same, consumers are choosing the Civic. Price apparently trumps all other factors, including CR Reviews and perceived quality deficiencies.
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CarGuyLee
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Didn't realize notyper worked for this site.....WOW....I would have expected more.
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DrWhiner
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The incentives are just to tell those Honda buyers now is the time to buy, why? After production seriously hampered by the JP quake and half a year later the Thai flooding, shouldn't Honda shout out to let everybody know IT'S BACK?
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notyper
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Once again, you've missed the point TXsalesguy.
You're all pissy because someone else in some other thread has posted numbers you don't agree with. Newflash, that wasn't me and it wasn't this thread, so why do you keep bringing it up? Are you trying to come up with an excuse for telling me I wouldn't know what an incentive was if it hit me upside the head? Keep looking. And you're butthurt because I told you to bite me in response?
Honda has gone from being among the very best incentive wise to being 4th in terms of incentives as a percentage of sales price. They're on par with Ford/Nissan/VW. And from last year to this year, their incentives have grown more than anyone else's. That's the facts. Once again, I don't care whether you think that's good or bad. You can argue the reasons, but you can't argue the numbers.
As for insulting comments, staff, etc. here's another heads up for you. I've never made a damn cent off this site, nor do I ever expect to. You don't even see me using it to push my business - the only time I post anything business related is as information sharing exercise. That you had no clue who I was is a testament to that. You want some say in moderation? Pay for it.
And frankly, the moderation standards here have been far too lackadaisical because we started with a really tight knit group of posters in the early days so moderation was largely unnecessary, but growth brings a wider variation of users and we didn't keep up. So, at least from my end, I'm changing things up. I'm calling bullshit, I'm deleting trolls and I'm not tolerating any crap from anyone. We'll see how that works out.
SC
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according2kev
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notyper wrote:
So, at least from my end, I'm changing things up. I'm calling bullshit, I'm deleting trolls and I'm not tolerating any crap from anyone. We'll see how that works out.
SC
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Well, here is one you might want to consider checking into "iahs2k". He starts some of the most childish threads I've seen on TOV... only to stir the pot it seems. See for yourself.
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notyper
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Thanks. Will do
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dominik331
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notyper wrote:
Thanks. Will do
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Yes Yes Yes....
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owequitit
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TXsalesguy wrote:
notyper wrote:
Yeah, the Civic has lease deals that are better than any other competitor. You can get a $19.5k MSRP Civic for $300 less down and $10/month less than an $18.5k MSRP Elantra on a 36 month lease.
I use the Elantra as an example because Hyundai, as much as I don't like them, has seen incentive levels drop as their popularity has increased. Their resale values have also come up to the point that they are very close as well (the Civic is atop KBBs numbers, the Elantra atop ALG). That means that Honda is having to eat it on the leases to hit that price. That's an incentive. That's money they aren't making. It's pretty simple math. You don't even need a calculator to get the gist of it. And don't forget the $500 dealer cash as well - something that doesn't have to be offered on the Fit or CRV.
But feel free to compare to other competitors out there. None are newer than the Civic and none have the kind of deals that Honda is offering on the Civic. This is exactly the time (new product) when Honda shouldn't be having to undercut the competition on pricing.
Oh, and one more thing. Bite me sales boy.
SC
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A lease payment is calculated on the difference in sales price and the residual set 36 months down the road. A car with a high resale value is given a higher residual. There is a smaller gap from sales price to residual, thus a lower lease payment. All your Hyundai argument proves is that the Civic has a much better resale value than an Elantra.
Yes, Honda has had 0.9 and 1.9 on core models much of the year. Do you realize from my perspective how difficult that is when customers throw in our face that Toyota and other manufacturers have 0%?
And thank you for pointing out that there is $500 dealer cash on Civics. Whoop tee doo. At least you have that down. Take into account that Honda raised the MSRP on all vehicles about $120 and the invoice even more as AVHM has mentioned and that $500 starts looking more like a shell game.
I responded to your post because we have had posts on other threads here where people were claiming thousands per car. So my upside the head comment should have been directed to others making such claims earlier. Your post was in the same vein which led to my comment here, but I have been warned by others here that you are TOV royalty and it is improper to take you to task, so I humbly bow to your superior intellect and knowledge and grovel in your presence.
On other thought, no I don't. You bite me ricer boy.
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The problem TXsalesguy, is that since the leases are run through AHFC, and AHFC is a division of AHM, which is a division of HMC, Honda has the ability to "adjust" the residual.
While your assertion of how a lease payment is calculated is correct, the part you don't know is what Honda is doing on the finance end to set those residuals. By raising the residual only $500-1,000, they are essentially giving that same incentive in the leasing process without doing it through more traditional methods. The sales guys and finance guys don't see it, because it is given to them by AHFC. So while it MIGHT appear that they aren't toying with the amount of incentive, by raising the residual to lower the lease payment, they actually are. The problem with that is that it can be a dangerous game. If they raise the residual too much, and the cars end up being worth less than the residual at the end of the term, then typically Honda has to absorb whatever loss is associated with that when the lessee turns the car in at the end. They can get away with it if they are able to convert to new leases, and keep those people from turning the cars in outright, because they do have a little bit of wiggle room on the finance and manufacturing profit side, as well as new wiggle room with the new lease (they can use one to "wash" the other). However, that is not a good way to maintain long term earnings (just look at the Big 3 for example of how to "cook" the books with incentives). Honda typically is fairly conservative with their lease residuals. The only Honda we had that didn't end up slightly positive was our 2006 Accord when we turned that in. However, that was less the fault of the car and more the fault of the market because in August of 2009, the market was in the tank.
They can also mess with the dealer holdback, down payment required, and the money factor, which when all fudged a little bit here and a little bit there will have a significant impact on the overall picture, even though nobody may see what appears to be a ton of incentives.
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onetyme_sam
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hey, atleast we are not in India. Honda won't release the civic there because of their incompetence
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/struggling-honda-motors-wont-launch-new-civic-to-india/articleshow/14789923.cms
"Industry insiders blame it on the carmaker's inability to gauge the dynamic market shift to diesel models as well as delay in launching small compact cars. "
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FiSH-Chan
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There was talk about a small diesel City for quite a while. That is a small, compact car.. although maybe for India it isn't. Also the decision to drop the Civic.. don't know about that.. maybe simply because the City would fit that market better than the Civic ever could.
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