Nissan’s unbelievable $9998 Micra to start an entry-level price war!

Sticker prices are too high in Canada, and that has led to endless discounting that over-complicates the purchase of a new vehicle, argues Nissan Canada president Christian Meunier.

Meunier believes that responsible manufacturers should post MSRPs (manufacturers’ suggested retail prices) that are fair and transparent. This is better for both shoppers and dealers because it builds trust, he adds.

And thus in keeping with Meunier’s view of what legitimate pricing should look like, Nissan is poised to launch next month a sub-$10,000 subcompact car. Nissan says the Micra S with manual transmission at $9,998 has the “lowest starting MSRP in Canada” and offers “unbeatable value. What the press release doesn’t say is that Nissan Canada has now fired the first shot in what is shaping up to be a price war for entry-level car buyers.

The Micra, a subcompact hatchback with thrifty four-cylinder engine, arrives just as other auto makers are also pushing out new versions of their subcompacts. The latest Ford Fiesta has been updated and Honda has an all-new Fit coming in the summer.

The Fit is a particularly interesting comparison case. Like the Micra, it’s being made in low-wage Mexico, but where Nissan is pushing hard to offer a startling starting price and loudly touting it for all to hear, Honda is not positioning the 2015 Fit as a bargain-basement runabout for first-time buyers.

While Honda Canada has not yet announced pricing, in the United States the new Fit starts at $16,135. The base price of the made-in-Canada Honda Civic compact sedan is $15,690 in Canada, so the Fit will most certainly come in below that – probably at a sub-$14,000 base.

Dave Gardner, Honda Canada vice-president of sales and marketing, says Honda is carefully studying pricing for the new Fit, well aware of what Nissan is doing. Honda, though, is positioning the Fit as anything but a cheap box with wheels.

This Fit has “best-in-class passenger and cargo space, increased power, improved fuel economy and more refined, yet sporty dynamics,” says Honda. Where Nissan has a very basic Micra for less than $10,000, the Fit’s standard features will include LED taillights, Bluetooth connectivity and a rearview camera that Honda says will be an exclusive in the segment. What Honda won’t do is match the Micra’s starting price.

Beyond the sticker, Nissan is going after new customers and buyers with what Deals will call an “interesting” credit history – or none at all. With the launch of the Micra, Nissan is putting in place a sweeping range of finance and lease programs supported by Nissan Finance. There will be a Fist Time Buyer Program, a Grad Program, and a New Canadian Program to serve Canada’s multicultural communities.

But most intriguing of all, the Micra Opportunity Program “makes it easy for buyers to make payments on time, while establishing or improving credit. No previous automotive finance or lease credit history is required and all applicants will be considered regardless of credit bureau history.” So even if you have the credit history of a juvenile delinquent, Nissan will give you a look and bend over backwards to put you into a new Micra.

Just remember that if you want a Micra S with automatic transmission, air conditioning and cruise, you’re jumping up to $13,298 from the sub-$10,000 MSRP. And buyers who want many of the usual items that make commuting less onerous – power windows, heated and powered side mirrors, a cargo cover and power door locks – will be moving north of $14,000 with an automatic gearbox.

At least some of Nissan and Honda’s rivals clearly see what is evolving here. Take Chevrolet. The entry-level, made-in-Korea Spark hatchback starts at $11,945, but the right buyer might be able to string together up to $2,500 in discounts, plus a GM gas card promotion rated at $.40/litre for 800 litres. With GM Canada’s deals, then, a Spark buyer could drive away in a new ride for less than $9,500, pocketing a gas card and cheering a 0.49 per cent financing for up to 48 months.

At Hyundai, the buyer looking at a new Accent sedan starting at $13,449, could combine a $779 factory discount with zero per cent financing for up to 96 months. Even mighty Toyota has a $1,000 factory rebate on its cheapest Yaris subcompact, the $14,255 three-door hatchback with manual gearbox. Indeed, almost every car maker has quite a decent offer on its least expensive models.

Nissan may be pushing for lower sticker prices and minimized discounting, but until the competition believes this is the way of the future, savvy shoppers will need to be rigorous in researching pricing – as has always been the case.

 

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