published Thursday, July 19th, 2012

Base Passat under $20,000, but average price above $26,000


New Passats await shipment at Chattanooga’s Volkswagen plant.
New Passats await shipment at Chattanooga’s Volkswagen plant.
Photo by Dan Henry /Chattanooga Times Free Press.

AUTO INCENTIVES

Average incentive for light vehicles by maker in June:

Chrysler — $3,192, up from $3,106 in May

General Motors — $3,014; down from $3,368 in May

Nissan — $2,645, down from $2,766 in May

Ford — $2,489, down from $2,650 in May

Volkswagen/Audi — $2,485; down from $2,556 in May

Honda — $2,314, down from $2,353 in May

Toyota — $1,699, down from $1,968 in May

Hyundai/Kia — $1,253, up from $1,242 in May

Source: TrueCar.com

Volkswagen may have cut its base price for the Passat sedan to under $20,000, but buyers still are paying thousands of dollars more for the car with options and creature comforts.

Even though the Chattanooga-made Passat starts at $19,995, the average transaction price of the sedan is between $26,000 and $27,000, according to WardsAuto data.

In fact, local buyers appear to have little interest in the base sedan, which has a manual transmission, according to one Chattanooga auto dealer.

"We've had no request for them," said Ron Kwiatkowski, Village Volkswagen's new vehicle sales manager.

However, cutting the base price of the 2012 Passat from the prior model by $6,000 to $7,000 appears to have had the desired effect of wooing more people into VW showrooms.

According to the automaker, June sales of the Passat jumped to a new record monthly level in the U.S. of 10,252.

Total half-year sales of all VW models in the U.S. totaled 208,725, a 35.4 percent increase over the same period a year ago, according to the German automaker.

Jesse Toprak, of TrueCar.com, said that the prior model Passat was overpriced compared to rivals such as the Toyota Camry, Nissan Altima and Chevy Malibu. VW often used heavy incentives to make the Passat attractive to American buyers, he said.

"Today, the sticker price is more realistic," Toprak said, adding the midsize Passat doesn't require the same deep incentives.

Also, he said, another factor helping all automakers is that customers prefer vehicles with more options.

"Customer preference has changed to highly contented vehicles," Toprak said. "That's critical for profitability. Optional equipment or a higher trim level is one sure way to do that."

Kwiatkowski said Village VW sells Passats mostly in the $25,000 to $29,000 price range, so WardsAuto figures are "pretty much on the money."

He said the SEL model of the sedan, with a premium package, sells for $30,000 to $32,000. But, Kwiatkowski said, dealer access to it has been limited because of interior availability.

He said the SE model, the next trim level down in price, is what he sells the most. While it's "fully loaded," it doesn't feature options such as sunroof or navigation, the dealer said. Add in those items and the price is pushed up to about $27,500, he said.

The diesel version of the Passat with the SEL premium features sells at over $33,000, Kwiatkowski said. Its availability has been limited, too, he said. VW officials have said they're trying to bolster diesel engine production at the Poland factory where the power plant is produced.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

Other National Articles

videos »         

photos »         

e-edition »

advertisement
advertisement

Find a Business

400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.