Residual Projections for Auto Show’s Hot New Launches
All eyes were on new product launches and redesigns as the North American International Auto Show got underway Monday in Detroit, but ALG’s Eric Lyman peeled back the onion a bit to look at what kind of used-car values these rides might hold a few years down the road.
Here’s what the vice president of editorial had to say about the potential residual value impact on some of those models grabbing the limelight this week in the Motor City.
Chevrolet Corvette:
“Despite being a target for attacks by industry enthusiasts, the Corvette continues to perform at the top its segment with regards to residual values. A fresh design combined with Corvette’s value oriented price point (for the segment) will continue to support strong residual values.”
BMW 4 Series Concept:
“A rose is a rose, but BMW is taking a big risk in ditching the 3 Series name on the Coupe and Convertible variants and renaming them under the 4 Series moniker. If consumers don’t make the connection residual values could suffer as a result, putting more pressure on BMW in the increasingly competitive premium midsize segment that has experienced growth in coupe variants.”
BMW Z4:
“Now is a good time for a refresh to compete with the all-new 2013 Porsche Boxster and 2012 Mercedes-Benz SLK. Keeping product fresh in a trend driven segment limits normal residual value degradation over the course of a vehicle’s lifecycle.”
Cadillac ELR:
“The Cadillac ELR may be more important to Chevrolet than it is to Cadillac. By sharing an assembly line, the ELR’s success will take pressure of Volt sales, allowing GM to dial back on incentives that have added risk to the Volt’s residual value forecast.”
Infiniti Q50:
“While there is no direct residual value impact from a name change, Infiniti is rolling the dice with a new naming strategy across their entire lineup. The hope is to give Infiniti customers a clear path to their next purchase in the brand’s lineup, hopefully increasing loyalty which positively impacts demand and residual values. If successful, the name change will help Infiniti regain top residual value positioning among the premium midsize segment.”
Ford F-150 Concept:
“With an introduction this early, even as a concept, Ford risks the F-150 being old hat once it actually comes to market. The current generation may also suffer a dip in residual values as loyal customers await the all new product.”
Lexus IS:
“Lexus seeks to duplicate the success of the 2013 ALG Residual Value Award winning GS with the all new IS by adopting the family’s new spindle grille and a similar interior execution. Despite a competitive segment where almost every significant vehicle is redesigned, Lexus has historically employed strategies that maintain class leading residual values. We expect the IS to follow suit.”
Lincoln MKC Concept:
“Lincoln is aggressively trying to overhaul their image and customer base, from marketing to showroom experience, but nothing moves the needle like competitive product in high volume segments. Lincoln's entry and success in the premium compact utility segment is critical to the brands effort to reinvent the brand, as the MKC will go head to head with the successful Q5, X3 and GLK in this emerging segment.”
Acura MDX Concept:
“Traditionally a top performer in ALG’s residual value forecast for the premium midsize utility segment, the MDX has felt the pressure of an increasingly competitive segment with new entries like the Infiniti JX and redesigned Cadillac SRX. A well-received redesign should catapult the MDX back into contention for ALG’s 2014 Residual Value Awards.”
Acura NSX:
“Although nine years removed from the new-car marketplace, the previous generation NSX maintains an excellent residual value even today. As a halo vehicle for the brand, the aggressive styling and high performance direction of the NSX will help Acura compete more directly with luxury European competitors.”
GMC Sierra/Chevrolet Silverado:
“GM is hoping to improve fuel economy in its full-size pickups by dropping a few pounds and adding a couple transmission gears. With gas prices over the long term expected to rise, fuel economy is a key component to residual value leadership in the segment.”
Honda Small CUV Concept:
“With gas prices expected to rise over the long term and the subcompact utility segment in its infancy, Honda cannot bring their entry into the segment soon enough. With strong brand value and perception of fuel economy, Honda can capitalize on a segment currently populated with polarizing niche products.”
Jeep Grand Cherokee Diesel:
“Diesel powertrains have proven to hold significant value over their gasoline counterparts and the Grand Cherokee diesel offering should fall in line with this trend. The improved fuel economy will help off-road enthusiasts venture further on the trail and help urban trekkers stay on the road and out of the filling station.”
Jeep Liberty:
“The Liberty gets a much needed overhaul and fuel economy improvements, but maybe more importantly, it gets the Pentastar V6. The Pentastar V6 has contributed to higher residuals in every vehicle it has graced and the Liberty will be no exception.”
Maserati Quattroporte:
“The Maserati brand is poised for a surge in the U.S. market over the next year or so, with multiple models that aim to bring the brand into the mainstream luxury car market. While a huge increase in sales, and subsequently used supply, may erode residual values, well-executed product in line with consumer trends (like greater fuel efficiency and AWD) could support a rise brand value and awareness that will push residuals higher.”
Mercedes-Benz CLA:
“While critics claim the brand is going downmarket, Mercedes-Benz is acknowledging the value of bringing in a potential lifelong customer at a younger age and income level. With the Big 3 German luxury brands set to launch all new entries in the premium compact segment for 2014 model-year, the stage is set for a battle of an entire generation of luxury car buyers.”
Mercedes-Benz E-Class:
“A strong mid-cycle refresh goes a long way in preserving strong residual values, and Mercedes-Benz has spared no expense in keeping the E-Class current with the forthcoming S-Class and the highly competitive premium full-size segment. High tech upgrades and an aggressive look is sure to resonate with demanding luxury customers and keep the E-Class competitive for years to come.”
Toyota Furia Concept:
“As Toyota focused on utility vehicles and hybrids over the past decade, the Corolla quickly lost ground in the red hot Compact segment. The Furia hints at what Toyota has in store to rectify the long-in-the-tooth styling that has caused residual values to slip in the face of high efficiency and progressive looking competitors.”