Value pricing helping '06 Chevy Impala

[BMWDave]

Value pricing helping '06 Chevy Impala gain stronger residuals
DAVE GUILFORD | Automotive News
Posted Date: 8/18/05
NASHVILLE, Tenn. -- Value pricing has produced an immediate benefit for Chevrolet: The 2006 Impala is getting a strong uptick in projected residuals.

Automotive Lease Guide of Santa Barbara, Calif., projects residual values for the re-engineered Impala ranging from 41 to 45 percent after a three-year lease. Current three-year residuals range from 31 to 37 percent.

Automotive Lease Guide sets residual values based on the estimated resale value of a vehicle after three years, as a percentage of the original sticker price. GM helped its residuals by cutting the base price of the new Impala by $1,100, to $20,990, including shipping.

Value pricing, in which automakers lower sticker prices to bring them closer to transaction prices, is meant to wean buyers form huge incentives and attract Internet shoppers who focus on price.

Value pricing's effect on residuals -- considered a measure of brand strength -- is another bonus, says Ed Peper, Chevrolet's marketing general manager.

"It is absolutely an intended consequence," Peper said at a press event here.

Adding a V-8

Raj Sundaram, president of Automotive Lease Guide, said the Impala also benefited from being a re-engineered model. Although still built on General Motors' W platform for mid-sized cars, the Impala has been reworked extensively, says vehicle line executive Dave Whittaker.

Key selling points are reduced interior noise and the 5.3-liter V-8 available on the SS performance version, Whittaker says. A 3.5-liter V-6 is the base engine in the LS and LT models. A 3.9-liter V-6 is standard on the upper-level LTZ model and optional on the LT.

GM has added several standard features, including roof-rail side curtain airbags for front and rear passengers; new audio systems featuring an input jack for iPods and MP3 players; and variable valve timing on V-6 engines.

The V-8 comes with cylinder deactivation, which GM markets as Displacement on Demand. Remote starters are standard on all models except the base LS. Fold-flat rear seats are standard on LTZ and SS models.

The car's sheet metal was changed modestly. GM says target buyers don't want flamboyant styling.

Sales formula

GM is following its formula for the Impala by offering a moderately priced vehicle with several premium features. GM rode that strategy to 290,259 U.S. Impala sales last year, up from 174,358 in 2000, the first full year of production for the current model.

GM added a second shift for Impala at its Oshawa, Ontario, car assembly plant in 2002 to meet demand.

But Impala sales still lagged behind segment leaders. Honda sold 386,770 units of the Accord in the United States last year, and Toyota sold 426,990 units of the Camry.

Peper wouldn't give a sales target for the Impala. The goal, he said, is to "sell more."

To do that, he will target buyers from 35 to 54 years old with a household income of $70,000 to $75,000. Buyers are expected to be split evenly between men and women, and about half are expected to be college graduates.

[bobwill]

At the price they're selling those things Chevy should definately have a winner on their hands.

[giant_mtb]

Go Impala!    

[TBR]

The only problem with this car, imho, is that it isn't very space efficent. Other than that it has what it takes to be a winner: it drives well, is conservatively styled, has plenty powerful, and is a great value.

[ifcar]

It's not exactly fair to say that the Impala has "lagged behind" Accord and Camry sales considering that it is one of Chevrolet's TWO midsize sedans.