Is this the end of the sticker price?
|Nick Gibbs is UK correspondent at Automotive News Europe.|
The death of the headline sticker price for a new car may be hastened by the popularity of smartphones and the growth of pay-per-use car-sharing operations.
Smartphone sellers often bundle a phone's purchase price into a monthly fee. Automakers can now imagine a similar scenario for cars.
"The days of the headline figure are numbered," said Tony Douglas, head of marketing and sales for BMW's mobility services, which includes the automaker's new 'i' brand for EVs.
"In the beginning people bought their phones and they cost 400, 500 euros. Now my kids think a mobile phone costs 1 euro," Douglas told me
A sticker price gives customers an orientation of a car's price but in reality it has little to do with what people pay from their bank accounts every month. "Very few people pay the headline figure," Douglas says.
A fixed monthly figure sits easier with a younger customer used to buying their smartphone in a similar manner, Linda Jackson, Citroen's UK and Ireland chief.
She said 85 percent of all DS3 subcompact sales in those countries are made on Personal Contract Purchase (PCP) finance, where the monthly figure is reduced by setting aside a chunk of the car's price until the finance period is up.
Younger customers are much more used to buying on that type of agreement," Jackson said. "It's no different paying for a car or a phone."
BMW's Douglas said the pay-per-use model of car sharing could also accelerate the death of the sticker price. Many car companies are starting to see this as the best way to engage with younger consumers. "The next generation may think in terms of cost per minute rather than sticker prices," he said.
You can reach Nick Gibbs at email@example.com.