Thursday, July 13, 2006

The new compact...price matters

The new compact is mainstream
Although big and sophisticated the new compact is good value. And the leaders in this segment have realized that it is not worth trying to sell these cars as premium. For that purpose there is the Volvo S40 and C30 (in the Focus family) and the Audi A3 (in the Golf family). And of course the more informed and cash-filled buyers will wisely spend their money in the BMW 1-series and Mercedes sportcoupe that really have a superior RWD architecture. In this particular the Focus II excels since it has very competitive pricing. But the Golf V rapidly lowered the usual VW prices and now fights head to head with the rest of the mainstream players. The “back to mainstream” route will be further accelerated with the next Golf VI.
However, this move to maistream does not mean that manufacturers won't try to be more profitable in this segment. The future trend is to keep basic hatchback versions very competitive in price and use the niche versions (CC, small SUV, sporty coupé) to move up in the price scale.

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