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December 10, 2005

Car Dealers Bank on Pre-launch Bookings

Gone are the days when hordes of buyers would book popular models without actually viewing the cars first, but how can booking early still benefit you?

By Nick Syn

SELLING CARS IS a difficult business at the best of times, but it seems like things have been getting much harder of late. It used to be that dealers could shift bread-and-butter models with practically zero effort, kicking back and cooling their heels while people flocked to put their money down sight unseen.

A vast number of factors influenced this – the state of the economy for one, and the fact that cars did at one point constitute proper assets that could actually appreciate.

Of course, there will always be stalwart groups of early adopters, but that doesn’t change the fact that things are considerably different now, with customers in general being far more wary and determined to wring the most out from their investment. In today’s buyer’s market, therefore, do dealers get much chance at beating people off with a big stick?

If you look at the way most car companies currently handle new product launches, then you’d think probably not.

When the current Mercedes-Benz S-Class was introduced back in 1998, large numbers of willing buyers meant that there was no real need for a big and glitzy local launch. Today, Mercedes throws vast and presumably vastly expensive shindigs even for the launches of relatively niche models like the CLS coupe.

It’s a similar story for arch-rival BMW. The launch of the latest E90 model 3 Series was the biggest BMW event in recent memory, with the company going to the extent of building a three-storey custom showroom on the Padang.

According to Belinda Bay, senior manager for public and customer relations at BMW dealer Performance Motors, the point of the exercise was simply an affirmation of market leadership. “Launches tend to be so dated now, and we wanted to do something different,” she told CarBuyer.

Still, the fact that car launches are becoming increasingly glitzy affairs does point to more effort and investment from dealers to cultivate customers. And another telling example is the evolution of the pre-launch. The pre-launch or pre-sales tactic basically involves opening up the order books for new models far in advance of when the cars actually arrive in local showrooms.

Of late, it seems like the pre-launch has become less a case of simply constituting one way of accommodating large numbers of enthusiastic buyers hungry and eager for new product, to more of a strategy for establishing early footholds in what has become an extremely competitive cutthroat market.

The basic thrust is the fact that starting to take orders for new models early helps to lock customers in, and keeps them from straying off towards other marques.

“It’s a strategy that everybody adopts,” said a product manager for the distributor of a major Japanese marque.

“With a current model on the way out, you have to tell people that the new one is coming. In the past it wasn’t so transparent, now the Internet has changed everything, and easily available information on next generation models tends to stop people from buying the current version,” he adds.

Opening up the order books early is one thing, getting customers to actually bite is another. Stalwart early birds aside, how do you get your average customer to commit to buying a product he or she won’t actually see for at least several months?

In other words, what advantages does the pre-launch hold for you, the average car buyer?

Well for the most part, bargains. Take a look above at these four popular models that have recently been pre-launched to see how they stack up.

EARLY BIRD BENEFITS FOR THE HOTTEST NEW MODELS

Mercedes-Benz S-Class
How much?
There will be two models available initially. The S 350 lists for $328,888 and the S 500 for $408,888. Prices include COE.

When is it coming?
The car will be launched next January and it is hoped that deliveries will start before Chinese New Year.

What are the early bird advantages?
You’ll be amongst the first to own what is supposedly the mother of all technological tours-de-force. You basically get all of Mercedes-Benz’s engineering know-how contained in one car, and that means enough gadgets to make owners of rival marques green with envy.

Honda Civic
How much?
There are two models available, the 1.8-litre costs $72,000 and the 2.0-litre $79,000. Prices include COE.

When is it coming?
The car will be officially launched on January 6 and deliveries are expected to start soon after.

What are the early bird advantages?
The first 200 buyers are guaranteed delivery of their new cars before Chinese New Year, and these early adopters also enjoy special prices which are lower than what the Civic models currently list for. This batch of cars was snapped up within a week of the pre-launch.

Toyota Yaris
How much?
A fully-refundable deposit for $1,050 will secure your place in the Yaris queue.

When is it coming?
The car will be officially launched sometime in the first quarter of next year and deliveries are expected to start soon after.

What are the early bird advantages?
Early bird bookings for this much-lauded compact hatchback come with petrol vouchers worth $500. You also make sure that you’re first to get hold of one of the cutest new compact hatches around.

Lexus IS250
How much?
The price hasn’t been set but you can book the car now with a fully-refundable $10,000 deposit.

When is it coming?
The car will be officially launched in the first quarter of 2006 with deliveries expected to commence roughly at the same time, subject to stock availability.

What are the early bird advantages?
Getting first dibs at what is supposedly Lexus’ most committedly driver-focused BMW 3 Series rival yet.


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