The car brand known as the “value” offering now boasts the largest markup percentage

The car brand known as the “value” offering now boasts the largest markup percentage

There are some car brands that naturally charge higher prices for stickers in the showroom: think BMW (BMWYY) Mercedes Benz (DDAIF) Volkswagen (VLKAF) Owned by Audi (AUDVF) and its soon-to-be public Porsche brand, etc.

Then there are brands that naturally mention something more in line with “value” – brands like Honda (Hamad Medical Corporation) Hyundai (HYMLF) and Toyota (TM) and Kia (Kimtv) .

It is surprising to many that this last brand – Kia – has already moved into the category of larger brands. In fact, Kia’s brands ranging from seven- and eight-seat Telluride SUVs all the way to entry-level Rio are among those with the highest average profit margins.

On average, Kia cars and SUVs sell for about 6% of their label price, CNN Business reports, citing data from According to CNN Business, Honda, Hyundai, a luxury SUV brand, and Land Rover are ranked roughly second, 4% above the average sticker price.

In dollar terms, Land Rover continues to command the highest profit margins, with customers paying an average of $3,686 over the sticker price, CNN Business reports, citing Edmunds. However, the average purchase price of a Land Rover SUV in the United States is over $94,000, which puts the brand’s percentage lower than that of Kia.

Value for money + technology = demand

Even on a straight dollar basis, Kia still ranks second among all U.S. auto brands, with customers paying an average of $2,183 over the sticker price, according to CNN Business. This is especially important considering the average Kia purchase price of nearly $36,000 – which makes the price much higher in percentage terms.

CNN Business cites value for money among the main reasons Kia’s prices are now rising, which is in turn fueled by both a tight auto market, and improved perceptions that Kia isn’t necessarily a brand to buy because of the lower price tag.

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Conversely, South Korea-based Kia has marketed its range of cars and SUVs as more sporty and technology-enabled than many of its competitorsโ€”helped by the popularity of the company’s electric vehicle offerings.

Even before chip shortages and supply chain problems began affecting car production, some Kia models like the Telluride were already earning a premium on their label price. CNN Business said the Telluride and new Kia Carnival are selling on average about 7% above their label price.

To be sure, Kia’s excellent driving may not last. Several other automakers are either preparing to roll out new electric cars that consumers crave, or have already started delivering them.

Hard-to-obtain electric vehicles also require premiums

general motors (GM) Earlier this month, it launched its second attempt to be a mass market leader in electric vehicles with the launch of the Chevrolet Equinox EV, which is expected to retail at a sticker price of $30,000.

Volkswagen, BMW, Mercedes-Benz, and makers of newer electric vehicles, including the Rivian (countryside), Fisker (FSR), new (NIO), Xpeng (XPEV) and others are also working on battery-powered vehicles – all at very different price points but also models that are expected to be in high demand and command a premium.

stronghold (F) stopped making reservations for the all-electric F-150 Lightning when the number of backorders reached 200,000 at the end of 2021. Deliveries of the electric truck began in May and the company is ramping up production, although as of the end of August only 6,800 vehicles have been delivered. .

GM, meanwhile, has more than 90,000 reservations for its all-electric Hummer โ€” so many that it had to pause adding buyers to its waiting list last week, making the cars even more popular in the resale market of course.

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A white version of the Hummer EV Pickup with 100 miles on the odometer and window sticker price of $114,290 is currently available on the aftermarket site Cars & Bids for $150,000.

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