Originally published on Gas2.
Citroen’s solution to a lack of young buyers is an innovative pay-per-use plan based on mileage, offering access to new cars rather than outright ownership.
The plan is being rolled out in select European countries, and could offer Millennials all the benefits of car ownership without being tied to the vehicle. The plan is being rolled out on the new Citroen C4 Cactus crossover, which is being offered with two types of pricing plans. The traditional flat rate plan costs 199 euros per month for 36 months, and includes insurance, maintenance, and 45,000 kilometers, or about 30,000 miles of driving. Pretty standard stuff here, right? It’s a pretty good deal, wrapping maintenance and insurance up in the cost, but you’re still looking at about $275 a month.
That’s way more than even the most expensive cellphone plan, the payment many automakers want to emulate. You can usually get a brand new phone and a service contract for around $100 a month. While the Cactus comes in at a featherweight 2,100 pounds (!!) and uses a BlueHDi turbodiesel engine to achieve as much as 91 MPG, you’re still shelling out a lot of money for fairly basic transportation. How can automakers compete?
Citroen’s alternative to the traditional payment is a lower cost lease plan they say will save drivers money by changing them based on miles driven, rather than paying for thousands of miles up front. Basically, you pay a low flat monthly rate, and are given X-amount of miles to drive per month. Drive more than your allocated miles, you get charged more. Drive less, pay less. Don’t drive at all? Your only cost is the monthly “membership” fee. but you aren’t charged for any miles you didn’t drive. In fuel-obsessed Europe, every euro that isn’t fed into transportation is a blessing.
Obviously aimed at city dwellers, this plan gives buyers unfettered access to a brand new Citroen at a much lower cost, tied to their driving habits. It’s the same way mobile phone companies have offered users access to the highest-quality phones for little or no cost, and would help avoid large payments for extra miles at the end of a lease. It’s a hybrid car-sharing plan and standard lease agreement, but minus the sharing and balloon payments, the worst parts of either plan.
For automakers, this plan might just be a way to get us Millennials into all of those new cars they’ve spent billions making and marketing.
Source: Automotive News
Citroen Introduces New Pricing Plans For Millennials was originally published on CleanTechnica.
To read more from CleanTechnica, join over 50,000 other subscribers: Google+ | Email | Facebook | RSS | Twitter.
This was reported by Elon Musk on Tesla’s last financial call, but it seems to have slipped under the radar. Reuters recently ran a short article on the news, which made me think I should as well.
As Tesla moves into the European and Chinese markets more, the company is expecting to see about twice as many sales there as in the United States and Canada by the end of the year.
Tesla sold 22,477 cars in 2013, most of which went to the US market. European sales started in the Fall.
In China, Tesla is going against the tide. It isn’t jacking up its prices there to “rip off” customers and make a bigger profit. The price will be higher due to shipping costs, duties, taxes, etc, but Tesla doesn’t intend to make any more off of it there than in the US. (The same goes for Europe, by the way.) In a market so fond of exclusive, expensive, luxury vehicles, it’s unclear how that will turn out — but one would think it will turn out very well.
It’s all about doing what’s right, Elon said. However, he thinks it also makes good business sense.
While it’s going to take a few months to get vehicles over to China, sales should be big there once they are available. “Towards the end of the year, we expect sales in those regions combined to be almost twice that of North America,” Elon said.
European sales have been decent so far, but not sky high. They’ve been great in Norway, but not so hot in Germany, France, and the Netherlands. However, word on the street this weekend is that Tesla Model S prices in Europe are getting a big cut:
Tesla PR in America hasn’t responded to our request for confirmation, but online sources show the drops are fairly substantial. In Germany, for example, Tesla has dropped almost 7,000 euros ($9,700 US at today’s exchange rate) off the price, down to 65,300 euros ($90,600), while in Holland, the new price is down 4,000 ($5,500) euros to 66,200 ($91,900). No reason was given for these drops, but we can’t help but suspect that demand isn’t too strong at the moment.
Maybe this has been in the plans all along, as logistics got worked out and streamlined. Who knows?
Image Credit: Tesla
Tesla Sales In China & Europe Expected To Be Double North American Sales was originally posted on: PlanetSave. To read more from Planetsave, join thousands of others and subscribe to our free RSS feed, follow us on Facebook (also free), follow us on Twitter, or just visit our homepage.