{"id":24796,"date":"2020-02-14T18:04:57","date_gmt":"2020-02-14T22:04:57","guid":{"rendered":"http:\/\/henrypayne.com\/?p=24796"},"modified":"2020-02-14T18:04:57","modified_gmt":"2020-02-14T22:04:57","slug":"where-in-the-world-are-detroits-entry-level-vehicles","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2020\/02\/where-in-the-world-are-detroits-entry-level-vehicles","title":{"rendered":"Where in the world are Detroit&#8217;s entry-level vehicles?"},"content":{"rendered":"<p><div align=\"left\"><img decoding=\"async\" src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/14\/PDTN\/005bc183-0114-4c0d-8d9e-f62b065a1707-TdnbrdDetroit_01_07_2019_Tdnxx_1_B001_2019_01_06_Img_Behind_The_Wheel_Com_1_1_Es.jpg?crop=2272,1514,x357,y258&amp;width=540&amp;height=&amp;fit=bounds&amp;auto=webp\" alt=\"The Chevrolet Spark, which starts at $14,095 including delivery fees, is one of only two vehicles from Detroit automakers that retails for under $20,000.\" \/><\/p>\n<\/div><p>The Chevrolet Spark, which starts at $14,095 including delivery fees, is one of only two vehicles from Detroit automakers that retails for under $20,000.\u00a0<span class=\"credit\">(Photo: AP)<\/span><\/p>\n<p class=\"speakable-p-1 p-text\">Since its development of the Model T in 1908, Ford Motor Co. has been synonymous with building affordable, entry-level vehicles for the working class. By 1924 the price of a Model T Runabout had fallen to just $260 \u2014 the equivalent of about $3,900 in today&#8217;s dollars.<\/p>\n<p class=\"speakable-p-2 p-text\">Fast-forward to 2020, and Ford does not offer a single vehicle for less than $20,000 when delivery fees are included. And Ford is not alone. As Detroit automakers increasingly abandon\u00a0affordable sedans for\u00a0higher-priced SUVs, Asian carmakers are only too happy to pick up those entry-level sales and possibly gain loyal customers for life.<\/p>\n<p class=\"p-text\">Since Ford ended production of its entry-level Fiesta and Focus cars last year, the most affordable vehicle in the automaker&#8217;s lineup is the $21,090 Ford Ecosport SUV ($19,995 MSRP plus $1,095 delivery fee).<\/p>\n<p class=\"p-text\">Fiat Chrysler Automobiles\u00a0has\u00a0seven brands in the United States. Since it discontinued U.S. sales of the Fiat 500\u00a0for 2020 and axed the Dodge Dart in 2016 \u2014 both slow-sellers \u2014 not a single\u00a0vehicle in the automaker&#8217;s lineup is priced under $20,000.<\/p>\n<div class=\"partner-placement partner-spike\" data-ad-placement=\"native-article_link\" data-ad-sizes=\"[&quot;fluid&quot;,[3,3], [2,6]]\"><\/div>\n<p class=\"p-text\">Among Detroit brands, only Chevrolet\u00a0\u2014 traditionally the value nameplate at General Motors Co. \u2014 still offers vehicles below that $20,000 price-point:\u00a0the\u00a0subcompact Sonic at $17,595\u00a0and the wee Spark at $14,095, both with delivery fees included.<\/p>\n<p class=\"p-text\">The entry-level\u00a0market is now dominated by Asian makers like Hyundai. The Korean automaker&#8217;s new subcompact Venue SUV \u2014\u00a0loaded with features\u00a0like automatic collision-braking and remote smartphone-app connectivity \u2014 starts at $17,350. That&#8217;s about $3,700 less than Ford\u2019s similarly sized EcoSport.<\/p>\n<div class=\"partner-placement partner-spike\" data-ad-placement=\"native-article_link\" data-ad-sizes=\"[&quot;fluid&quot;,[3,3], [2,6]]\"><\/div>\n<p class=\"p-text\">\u201cOur young customers want SUVs, and we have the most affordable SUV on the market,\u201d Mike O&#8217;Brien, Hyundai&#8217;s vice president of product development, said at the Venue\u2019s media launch in Miami this winter. \u201cWe feel the entry-level market is key to bringing new customers into the brand.\u201d<\/p>\n<p class=\"p-text\">Kia (the $18,610\u00a0Soul) and Nissan ($19,965 Kicks) are the only other manufacturers to offer sub-$20,000 SUVs.<\/p>\n<p class=\"p-text\">If consumers still\u00a0find the SUVs too steep, there are always Asian cars like the $15,655 Nissan Versa, $16,250 Hyundai Accent, $16,605 Toyota Yaris, $16,815 Kia Rio, $17,145 Honda Fit\u00a0and $18,855 Kia Forte.<\/p>\n<div id=\"module-position-SewFpdtGGJA\" class=\"story-asset image-asset\">\n<aside class=\"wide single-photo\"><div align=\"left\"><img decoding=\"async\" src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/14\/PDTN\/e9c6f075-6a4a-44cc-b773-e045332dea60-2017_0110_Dm_Naias_Consumer_Guide0008.jpg?width=540&amp;height=&amp;fit=bounds&amp;auto=webp\" alt=\"The New Hyundai Venue subcompact SUV \u2014\u00a0loaded with features\u00a0like automatic collision-braking and remote smartphone-app connectivity \u2014 starts at $17,350. That's about $3,700 less than Ford\u2019s similarly sized EcoSport.\" width=\"540\" data-mycapture-src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/14\/PDTN\/e9c6f075-6a4a-44cc-b773-e045332dea60-2017_0110_Dm_Naias_Consumer_Guide0008.jpg\" data-mycapture-sm-src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/14\/PDTN\/e9c6f075-6a4a-44cc-b773-e045332dea60-2017_0110_Dm_Naias_Consumer_Guide0008.jpg\" \/><span class=\"mycapture-btn-wrap\"><span class=\"mycapture-non-priority-horizontal-image mycapture-btn-with-text js-mycapture-btn js-mycapture-photo-asset\">Buy Photo<\/span><\/span>The New Hyundai Venue subcompact SUV \u2014\u00a0loaded with features\u00a0like automatic collision-braking and remote smartphone-app connectivity \u2014 starts at $17,350. That&#8217;s about $3,700 less than Ford\u2019s similarly sized EcoSport.\u00a0<span class=\"credit\">(Photo: Daniel Mears, The Detroit News)<\/span><\/p>\n<\/div><\/aside>\n<div class=\"clearfix\"><\/div>\n<\/div>\n<h3 class=\"presto-h3\">A new narrative<\/h3>\n<p class=\"p-text\">While Ford has exited traditional entry-level segments due to slow sales and thin profit-margins, it has made major investments in SUVs like the $26,080 Ford Escape and the upcoming (estimated $28,000) Ford Bronco. It also has made bets in\u00a0more-upscale products like the Tesla-fighting\u00a0$45,000 Mustang Mach-E, and a took a stake in premium EV-maker Rivian, with which it is co-developing an electric\u00a0Lincoln SUV.<\/p>\n<p class=\"p-text\">\u201cWe made a strategic decision to exit the small-sedan segment,\u201d said Mark LeNeve, Ford&#8217;s U.S. vice president for marketing, sales and service. \u201cWe want to be in affordable vehicles. We just won\u2019t be in sedans, but in SUVs where we are stronger.\u201d<\/p>\n<p class=\"p-text\">LeNeve points out that Asian\u00a0automakers\u2019 global footprint includes Japan and Korea, where cheap, small cars are still in demand, thus giving them the production volume necessary to spread costs.<\/p>\n<p class=\"p-text\">\u201cOur global footprint is North America,\u201d he said.<\/p>\n<p class=\"p-text\">Small-sedan sales have shrunk to just 750,000 units annually in the U.S.,\u00a0about 4% of the market. LaNeve said\u00a0that vehicles like the coming Bronco are unique products that Asian carmakers can\u2019t rival.<\/p>\n<p class=\"p-text\">But he admitted: \u201cIf what the customer wants is a (compact or subcompact) segment car, then we don\u2019t have anything for them right now.&#8221;<\/p>\n<p class=\"p-text\">The new narrative is in contrast to the principles that made Henry Ford\u2019s Model T a household name in the early 20th century.<\/p>\n<p class=\"p-text\">&#8220;I will build a motor car for the great multitude,\u201d Henry Ford famously said\u00a0in 1909. \u201c&#8230;It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one&#8230;&#8221;<\/p>\n<p class=\"p-text\">Before this year, car buyers could walk into a Ford showroom and buy a\u00a0$19,000\u00a0Focus or a $15,000 Fiesta. Focus buyers at the end of their lease period now enter dealerships with the choice of a more-expensive Ecosport or bigger SUV.<\/p>\n<p class=\"p-text\">One Michigan Ford dealer that also owns\u00a0foreign-brand dealerships told The Detroit News that buyers enter Ford stores and sometimes can\u2019t find an entry-level vehicle that fits their budget. The dealership\u00a0declined to be identified, for fear of backlash from the automaker. Determined not to lose the customers&#8217; business, they send them\u00a0to their Asian-brand stores.<\/p>\n<p class=\"p-text\">In the absence of Detroit offerings, foreign manufacturers are filling the niche.<\/p>\n<p class=\"p-text\">Ford\u2019s Dearborn backyard, for example, is home to Metro Detroit&#8217;s largest Hyundai dealer, LaFontaine Hyundai. When the Focus exited the market, car buyers who otherwise might have\u00a0shopped\u00a0that car started looking seriously at the Hyundai Elantra, which\u00a0carried an $18,120 price tag last year.<\/p>\n<p class=\"p-text\">&#8220;We&#8217;ve seen a lot of interest in the Elantra since Ford left the compact market,&#8221; Lafontaine sales manager Steve Hunsinger told The Detroit News. Notably,\u00a0the Elantra\u2019s price has jumped to $20,105 for 2020, as Hyundai moves the Venue into the price slot below it.<\/p>\n<div id=\"module-position-SewFpdtfxtA\" class=\"story-asset image-asset\">\n<aside class=\"wide single-photo\"><div align=\"left\"><img decoding=\"async\" src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/11\/PDTN\/a7cd5d5a-c6d2-46a3-bc58-a9ccfdbc76de-Large-40001-2020Venue-Miami.jpg?width=540&amp;height=&amp;fit=bounds&amp;auto=webp\" alt=\"The entry-level\u00a0market is now dominated by Asian makers like Hyundai. The Korean automaker's new subcompact Venue SUV starts at $17,350 including delivery fees. That's about $3,700 less than Ford\u2019s similarly sized EcoSport.\" width=\"540\" data-mycapture-src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/11\/PDTN\/a7cd5d5a-c6d2-46a3-bc58-a9ccfdbc76de-Large-40001-2020Venue-Miami.jpg\" data-mycapture-sm-src=\"https:\/\/www.gannett-cdn.com\/presto\/2020\/02\/11\/PDTN\/a7cd5d5a-c6d2-46a3-bc58-a9ccfdbc76de-Large-40001-2020Venue-Miami.jpg\" \/>The entry-level\u00a0market is now dominated by Asian makers like Hyundai. The Korean automaker&#8217;s new subcompact Venue SUV starts at $17,350 including delivery fees. That&#8217;s about $3,700 less than Ford\u2019s similarly sized EcoSport.\u00a0<span class=\"credit\">(Photo: Hyundai)<\/span><\/p>\n<\/div><\/aside>\n<div class=\"clearfix\"><\/div>\n<\/div>\n<h3 class=\"presto-h3\">New-car affordability<\/h3>\n<p class=\"p-text\">The higher price of entry-level vehicles has sent more buyers into the used\u00a0market, according to Cox Automotive.\u00a0In 2018 and 2019, pre-owned sales were at their highest levels since the Great Recession, despite a healthy economy.<\/p>\n<p class=\"p-text\">Cox analysts say\u00a0new-car affordability is a concern for the industry.<\/p>\n<p class=\"p-text\">It\u2019s a big issue for manufacturers who need to sell new cars to be profitable. New-vehicle sales crested 17 million units in 2019 for a record fifth straight year. But it came at a cost as new car sales were actually down while fleet sales ballooned by 10.5%.<\/p>\n<p class=\"p-text\">\u00a0\u201cWhy aren\u2019t we selling 18 million new vehicles? Why not 20 million when the economy is so strong?\u201d Cox senior economist Charlie Chesbrough asked at a January conference in Detroit. \u201cNew-car leases and new purchases were down substantially in 2019, and we think this is due to vehicle affordability. If and when we have a price recession,\u00a0where is (manufacturer) safety?\u201d<\/p>\n<p class=\"p-text\">Dealers sell used vehicles that can\u00a0be had for well under $20,000, and that market has grown significantly as manufacturers have fled the lower model segments.<\/p>\n<p class=\"p-text\">Ford sales chief LaNeve said\u00a0that, for now, used cars have become a key part of Ford\u2019s entry-level\u00a0strategy.<\/p>\n<p class=\"p-text\">\u201cWe will be putting more emphasis on used cars going forward. Our customers get them off-lease, plus service,\u201d he said. \u201cPlus the business goes through Ford Credit. We sell them maintenance contracts and insurance&#8230; it\u2019s a very profitable business. We make bigger margins than selling a Fiesta or Focus, to be honest.<\/p>\n<p class=\"p-text\">Asian manufacturers see a safety net in selling subcompact\u00a0cars\u00a0under $20,000 should the economy turn\u00a0sour, Chesbrough said. \u201cWhen times get tough,&#8221; he said, &#8220;consumers look for ways to cut their expenses.&#8221;<\/p>\n<p class=\"p-text\">And, he added,\u00a0\u201cAn easy way for consumers to save money is to go back to the car.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Chevrolet Spark, which starts at $14,095 including delivery fees, is one of only two vehicles from Detroit automakers that retails for under $20,000.\u00a0(Photo: AP) Since its development of the Model T in 1908, Ford Motor Co. has been synonymous with building affordable, entry-level vehicles for the working class. By 1924 the price of a [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/24796"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=24796"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/24796\/revisions"}],"predecessor-version":[{"id":24797,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/24796\/revisions\/24797"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=24796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=24796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=24796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}