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The Lockup: The General Motors C-1 Is Overpriced

Joshua Is a self-proclaimed Driving God with an almighty Forza Game Rank.

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Over two million people have bought a GM C-1, but few if any of them know that is what they are driving. General Motors has become the master of the brand rebadging technique, and while such a thing is supposed to save costs, it currently doesn't.

Let's backtrack and jump in our time machine to a time where the C-1 was called a Lambda. All four options of Lambda were cheaply available in the 24K to 29K mark, around the price those cars should be. But when a remodel happened, we changed the platform from Lambda to C-1 and we got an overpriced product. So today, I explain why the 2018 Chevrolet Traverse, Buick Enclave, and GMC Acadia, the General Motors C-1’s, are all overpriced. And as the owner of a 2008 GMC Acadia and as a car salesman, I know what I am talking about. But let me prove it.

The Rundown

Land does not play a role in the cost of vehicles. These costs are paid outright by the company and are repaid through vehicle sales. The land the factory is on, business management buildings, warehouses, and test sites on the land do not count towards vehicle price.

Labor, however, accounts for 10% of the cost of the car. According to a statement posted on Quora,

This report consistently shows that the average car can be built in about 25 hours. If you use the labor cost figures thrown around over the years ($65-95 an hour, depending on how you account for retirees), then labor costs on your average car are $1600-$2400. The average car costs about $25k (sales-weighted average transaction price), so you're at 10% or less.

CBS News backs this up, stating:

Even the roar from Congressional critics about assembly line largesse seemed to miss the fact that (according to the UAW) labor costs account for about 10 percent of the cost of producing a vehicle; the remaining 90 percent includes research and development, parts, advertising, marketing, and management overhead.

Of course, this labor ranks from semi-skilled to skilled, such as the engineers involved in the assembly line process. The rest of the capital is the rest of the 90% which deals with production, machinery, materials, overhead checks and balances, marketing, etc. Intellectual, physical, and financial capital are all covered in the 90%. How much they all individually take is unknown, but if we knew I believe they would show that the base raw price of a GM C-1 is about 25K.

Supply shifters, on the other hand, are easier to break down into raw numbers. Nature and conflict don't really play a major role in the price of a C-1 as the Traverse and Enclave are made in the Lansing Delta Township plant in Michigan and the Acadia at the Spring Hill Plant in Tennessee. The cost of resources and technology are virtually considered the same thing nowadays and account for about 20-30% of the sale price of the car. Taxes on resources are accounted for in that base price and the finished product is also taxed. However, for a basic Chevrolet Traverse, the price still only tops out at 26K, so the 30K price tag isn't justified. Even with the cost to pay off the suppliers of things like airbags and audio systems which are rounded into the cost of materials anyway.

So at the end of it all, a Chevrolet Traverse costs $30,925, the GMC Acadia $29,995, and the Buick Enclave at $40,990, all including the infamous + sign that means “The Manufacturer’s Suggested Retail Price excludes destination freight charge, tax, title, license, dealer fees and optional equipment.” The Traverse stock shouldn't cost more than the GMC stock as GM has a hierarchy and Chevy is at the bottom. Not only that but at $29,995, the Dodge Durango is a better option on all levels when dealing with the Acadia (Denali being the exception, it's absurd for other reasons) and Traverse. Not only that, the Durango offers a HEMI V8 as an option.

Ignoring the Competition, the Traverse is an economy 7 passenger SUV but fully loaded, it runs about 60K. Not worth it when an Audi Q7 or Volvo XC90, actual premium luxury SUVs, start for cheaper at 50 and 47K respectively. This is the same issue an Acadia Denali runs into as well as the Buick Enclave. Especially the Enclave. The Enclave fully loaded runs past 60K and pushes itself into Land Rover Sport and Mercedes-Benz GLS territory. And also on the Enclave's cheaper side of life, a base Acura MDX is also the better SUV. In fact, I only mention the Acura MDX, Audi Q7, and Volvo XC90 because these are the cars Car & Driver cites as being worth the money more than an Acadia Denali and by extension, Buick Enclave. To make matters worse, all three of these cars just got remodeled so a price bump for the upcoming mid-model refresh is impending anyway in one to two years.

Consumer income plays a role too, as when fully loaded cars cost that much, you flock towards the cars with greater value. These cars simply don't possess such value. Most people in this pay bracket make a median amount of $99,364. That number can grow or shrink but the prices of these cars lend more towards growing. $183K more and even that number is still a median income. Plus the market is very large as the SUVapocalyopse rages on, killing car sales and boosting SUV/CUV sales drastically.

Conclusion

General Motors is greedy. That's the sole reason why the C-1 sells for so much. There is no reasonable excuse for the prices to jump so much in a remodel when for the value, they are more expensive than they are worth. Ironically, the price would validated if they made a C-1 in Cadillac form.

We as consumers can change the price by simply not buying and being conscious of our options before we sign on the dotted line. Sadly, when it comes to cars, I have seen many an unconscious buyer. But sadly, the government has no control over how much GM wants to sell their C-1s for. Price drops would have to rely on conscious buyers, a thing America simply does not have enough of.

© 2018 Joshua Nightshade

Comments

christopher on November 27, 2018:

...'not buying'...exactly

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