I agree with Beau that 2024 will be the year of affordability, but it’s all relative and we’re not currently seeing prices continue to drop as quickly as they once did. How much of this is seasonal and how much of this is structural is an open question, that we’ll explore in this chapter of The Morning Dump.
You know what will end up being affordable? The Nissan Rogue. At least the 2023 Nissan Rogue will be, as Nissan is offering dealers extra money to get rid of the old models. You know who might be able to afford a Nissan Rogue? Japanese autoworkers, who just got record wages in their labor negotiations, though I assume they’ll be buying X-Trails.
And, off-topic, there have been some big executive moves at GM worth noting.
Nissan Offering Dealers $1,000 For Each 2023 Nissan Rogue They Move
A lot of people buy Nissan Rogues. A lot of people rent Nissan Rogues. It is a car that succeeds, not so much because it’s great at anything, but because they are good enough at enough things and they are always available and pretty much always available at a reasonable price. The downside of this approach by Nissan is sometimes they make way too many of them.
That’s what happened in 2023 and now the market for Rogues is all messed up, with too many 2023s on dealer lots. In fact, Cars.com shows almost 15,000 for sale right now. Compare that to about 8,700 of the 2024 model year, some of which probably aren’t even there yet.
This is bad. Dealers are already mad at Nissan for a number of reasons and this isn’t going to help. What’s Nissan to do about it? According to a memo seen by Automotive News, the plan is to give dealers $1,000 per Rogue if they can move a certain number of them.
This means that not only are Nissan dealers incentivized to move them, but if you can find one at the end of the month who hasn’t moved enough to get the bonus then they’ll be extra incentivized to do so.
What do I mean? Let me create a hypothetical. The way this works is that a dealer, let’s say Oxford Nissan (a name I just made up) has 16 remaining 2023 Nissan Rogues. If Oxford Nissan sells 10, the dealership gets nothing. If Oxford Nissan sells 11, it gets an $11,000 bonus (11 x $1000). I haven’t seen the memo so it’s possible that the dealership can buy the 11th vehicle as a loaner or something else, which is one ploy dealers can sometimes do when the math makes sense.
So, yeah, it’s a great time to get a good deal on a… fine car. It’s fine.
It continues to be a terrible time to be a Nissan dealer.
February Average Transaction Prices Lower, A Little
As we’ve discussed, car prices have finally crossed back below the historic highs this year as more and more inventory comes onto the market. This hasn’t been quite matched by affordability as higher interest rates have kept prices up, and automakers have continually discontinued lower-price, lower-margin cars.
The Average Transaction Prices for new cars (aka ATP) were only down 0.1% from the revised January number at $47,244, which itself is only down about 2.2% from last year and 5.4% from the peak in 2022.
That’s better, but it still sucks.
Here’s the analysis from KBB/Cox Automotive:
“While everyone may applaud that prices are coming down, even marginally for the moment, affordability is still challenging the market,” said Erin Keating, executive analyst for Cox Automotive. “Most shoppers have not seen their incomes increase as quickly as vehicle prices, so affording a new vehicle remains difficult. We should also note that despite rising inventory, which is good for consumers, the levels are muted, not alarming.”
Even worse:
In February, of the roughly 275 different models available in the U.S. market, only nine had transaction prices below $25,000 and only two transacted for less than $20,000. The Kia Rio and Mitsubishi Mirage were the two most affordable vehicles in the U.S. last month, and both are being dropped from the market.
This also sucks. I suspect that we’ll see the average age of the automobile on the road to remain stubbornly high as the lack of affordable new vehicles remains. A rate change later this year, if it happens, might help relieve some pressure.
Toyota Hands Japanese Autoworkers A Huge Contract
Union Summer is now just… the Union Present, I guess? We’ve gone from Union Summer to Union Fall and are now about to wrap around to Union Summer again. While the historic contracts were big news here, the agreement by Toyota to pay big wages to Japanese autoworkers has an even bigger impact on Japan’s whole economy.
Prime Minister Fumio Kishida has made putting an end to the years of meagre wage growth a top priority to jumpstart feeble consumer spending. Japan’s wage increases have kept well behind the average for the OECD grouping of rich countries.
The Bank of Japan is also closely watching the results as a key data point in deciding when to end negative rates, in place since 2016.The bank, which has stuck with massive stimulus and ultra-low rates for years longer than other developed countries in an attempt to revive a moribund economy, is set to hold its next policy setting meeting on March 18-19.“The outcome of this year’s annual wage negotiation is critical” in deciding the timing of an exit from massive stimulus, governor Kazuo Ueda told parliament on Wednesday.
GM Loses VP Of Manufacturing And Software Head
Executives come and go, but GM has just taken a hit with one big retirement and a big health-induced step back from a key part of the company’s future.
Again, from Automotive News:
Gerald Johnson, 61, executive vice president of global manufacturing and sustainability, is retiring, GM said Tuesday. Jens Peter Clausen, 52, who has experience at Tesla, Lego and Google, will take over the role April 2, with Johnson staying at the company until the end of the year.
Separately, Mike Abbott, 51, who joined GM in May as executive vice president of software and services, is stepping down for health reasons, the automaker said. Baris Cetinok, the company’s vice president of product for software and services, will lead the division on an interim basis while the company searches for a permanent replacement.
Here’s the LinkedIn post from Abbott announcing the move:
it’s with great disappointment to share that i’m stepping down from my role at GM. since late last year, i’ve been facing some serious health issues involving my heart that have not improved. as a father and husband, i need to prioritize my recovery and be with my family with the hope that my health will improve over time.
Heart stuff is no joke, trust us, so we’re wishing Abbott a healthy and quick recovery. The timing of this sucks for GM given the importance of getting software right, but the company has stated it feels comfortable in its bench.
What I’m Listening To As I Write This
I’m in a cafe in Oxford and they’re playing Taylor Swift. There’s nothing wrong with a well-crafted pop song and these are about as well-crafted as they get.
The Big Question
This is always a fun game. At what price is a 2023 Rogue a good deal? The 2023 Rogue SV entry-level MSRP is $27,360.
Just came to say that Cruel Summer, is, indeed a flawless pop song. Excellent taste.
Looks like a dealer in my area has a Rogues advertised for almost $6k off. There is another $2k available for financing with Nissan. So that brings the model they have a ton of down to $24k or so.
It is hard to complain about a $24k new car these days. 90% of people just need a commuting appliance, I’m sure the Rogue is fine for that. It is the new Dodge Journey I guess.
That CVT though. Isn’t this still the “famous” Nissan CVT? Famous for being a piece of trash and grenading under 100k miles despite owner’s best efforts?
Spend $1k more and you can likely get a Toyota Corolla Cross. Might be a tad smaller than the Rogue, but no CVT to blow up at 70k miles.
Thanks for the shout-out to my day job at Cars.com, heh. We’ve been fiddling around a lot with data on vehicle availability and affordability lately, so there will be blogs on affordable models with bunches of inventory. Inventory, as mentioned, typically translates into wiggle room to haggle. It’s looking increasingly obvious that there’s a lot more of that on the new car side than the used car side lately, so unless you’re looking for a more luxurious depreciation king, why not spring for a car that someone else hasn’t farted in yet?
I’d say the Rogue is a decent deal, TBH. I don’t want one because it’s not my kind of car, but a friend who just picked one up is pretty happy with hers.
Is a Nissan rogue crummier and less reliable then a ford escape or whatever gm equivalent suv it would be?
I honestly don’t know. Never owned a Nissan cause I don’t trust em but maximas used to be cool.
A lot of people get Nissans that don’t particularly care for them very well it appears…
But some of them altimas just don’t die even though they belong in a junk yard years ago
the roque is a good car, everyone I know who ever had one, was happy with it. It isn’t a special car, it isn’t a sexy car etc…. But it is a great car for a reliable commuter type, or to get your kid in their first ride and feel comfortable about their safety at a decent price.
Most all people don’t need a “new” car, they want it…it goes back to the old phrase “it depreciates (add%) as soon as you drive it off the lot.”
I guess being an enthusiast I just don’t understand all this hype of oh, I have to have a new car; also as we all know the boring greyscale colors, crossoverpocalypse, etc. Most people would be fine w/ certified pre-owned or similar= 1-3+ years old and normal mileage; cars older than that which just need maintenance/small repairs; now even more people are fixing major problems on older cars to keep them going; also all the awesome classic cars! I’m biased because a junkyard=heaven and if I could have hundreds or thousands of old junkers I would be happy!
You can tell a lot about a person when you see what they drive. To me, owning a Nissan says: “I don’t care about the details. This looks and feels good enough, and the price is decent. I don’t care enough to search for a better deal. What a great vehicle!” A Nissan owner simply doesn’t know or care (or both) that there are better options for the same money.
A Nissan will never be a good deal, and I would have to be in a pretty bad position to decide that it was the best option. A Mazda CX5 starts at $29,300. In no world would I choose to save $2K and get the Rogue instead.
If you handed me a Rogue and a cheeseburger I would happily walk off the calories on the way home.
That graph of the average transaction price is nuts. I am way late to this conclusion, but I always assumed there would have been a sizeable dip somewhere in early 2020 when everyone stopped driving for a few months, but before the supply chain issues emerged. Whelp, I guess I didn’t miss out on any deals that year after all…
Surprised the Versa didn’t make it on the short list of cars that averaged under $20k sale prices. You can find them for well under $20k around here all day long, starting at $17,500.
It’s possible the Versa has gotten so bad it no longer meets the definiton of “car”. 😉
Fair point! Although I’d absolutely have a Versa over the Mirage.
I test drove the first gen Versa and had visions of what it might have been like to buy a car in 1985 East Germany.
They can definitely be optioned up nowadays into not-bad little car territory. One of my coworkers just had a loaded-up press version and was pretty surprised by it. While I’m no fan of Nissan from my sour experience with Ye Olde Failtima, I gotta say they’re at least trying to make a better-looking car nowadays, even down to the Versa.
It’s really depressing to see the subcompact car go the way of the dodo in the U.S., though. IIRC, the Versa and the Mirage are the only two affordable ones left and they’re not sticking around much longer. There’s the Mini that’s a definite step up in price and the 500 if you want to go EV and pay a little more, but I miss having the Mazda2, Yaris and Fiesta as options. Those were my go-tos whenever I got stuck in a rental, man. Easy to park, light, tossable. Just good little cars.
I saw Honda Fits everywhere . . . was a little surprised they pulled the plug on that.
Not for any price, unless it was the last car left on Earth. Even then I’d probably still rather walk…
I really tried to foresee a situation where I’d get a Rogue, but I just can’t get there. I’m a bit of a “normal car” enthusiast so the effort was there. Maybe it’d be easier once they sort out the issues they’re having with that new engine.
My parents have had a Rogue for 9 years now that has been fine. Believe it or not, at the time it was a legitimately nice option against class rivals, because it seemed like Nissan was trying. The Rogue was more comfortable, offered some nice convenience features, and generally offered more content dollar for dollar.
The problem beyond durability is they left their product to wither and just firesaled it, while other brands stepped up their game, with deeper and/or more frequent updates. The current Rogue seems like a good improvement and I have no reason to doubt the newer one isn’t a nice place to sit in and spend time, but I do have more than enough reason to doubt the reliability considering the VC turbo is under NHTSA investigation. Makes the most sense as a good vehicle to lease and hand it back to Nissan to deal with in 3 years. Especially in base models, where a RAV4 or CR-V aren’t doing anything that much better or different over a same lease period, and none of them are going to be particularly interesting or exciting vehicles anyway – which is fine!
Nissan has a habit of sprinting to catch up with the competition, only to fall over wheezing by the side of the road and taking a decade to catch their breath.
That’s a good way to put it. Nissan and Ford had really similar trajectories in the 2010s – in the first half they rode a wave of success and new product, only for it to come crashing down later in the second half.
I had a 2010 Rogue, and I agree with you. It was better than much of the competition, and came in at a reasonable price. People in here are being ridiculously hyperbolic about Nissan. It’s funny though — while I think the Rogue is actually competitive in its class, it’s the VC engine that would stop me from considering it. They really need a naturally aspirated hybrid (like a lot of automakers).
To me, Toyota is the brand that “stopped trying”. They coasted on their reputation of perceived reliability for decades, and pumped out dull cars that didn’t do anything better than the competition (Prius excluded, I think that was a marvel of engineering, and ironically that’s the car that everyone thinks is the dullest).
I only drove a Rogue from the gen you had toward the end of its run and was pleasantly surprised by it, as I had thought the early positive reviews of that gen were maybe hyperbolic. But late 2000s Nissans often still had a sportier feel than many competitors even with the CVTs, and good amount of kit for the price – almost techy even. You could get keyless access on a Versa years before Honda offered it on any Accord.
They do really need some hybridization as Toyota/Honda push them more and more in their core models. I get that Nissan didn’t have great success with them in the past – they had one in the prior Rogue even! – but it wasn’t really until the last 5 years or so that they really took off in mainstream Toyotas either. And even then it almost feels like Toyota playing catch-up because of the EV push, maybe a pivot after they ended the Prius sub-brand experiment.
I do think Toyota is trying more in recent years, but they still do some silly things; the Sequoia’s cargo floor comes to mind. Certainly though, they rested on their laurels in core products as you say, so they only had up to go.