By Jamie Barrie T he European carmakers showed off their newest stuff in Geneva in a line up of big ticket items including a Mercedes truck that will cost $500,000, the most powerful Ferrari and a tangerine McLaren that’ll do more than 212 miles per hour. However, the biggest surprise was the return of the long-lost station wagon at the show. Porsche was first at bat with their new hatchback, the Panamera Sport Turismo and you will see it on their dealer’s lots this fall. Volvo has a long legacy of big selling wagons and rolled out a sleek looking V90 that was as popular as any other two-seater at the show. Mercedes was not outdone offering up an AMG E63 S wagon that was met with much enthusiasm from those that attended the show. So, what is the motivating factor to revive the station wagon? SUV fatigue. According to an HIS Market study 55% of the vehicles sold in the US last year were SUV’s or pickups. US car makers have been dropping wagons from their lineups. While the trend has been long term, the last five years have been the hardest on the wagon with only 16% of sales or 75,000 cars last year. IHS Automotive Senior Analyst, Stephanie Brinley said, “There’s a fundamental demand level that doesn’t fluctuate much,” adding “It’s enough for the players who are left to see some healthy take.” Additionally, wagon customers are among the best in the business. Their top traits are educated, affluent and most importantly loyal. Dana Headrick, product manager at Mercedes-Benz USA said they love it commenting “I almost liken them to the millionaire-next- door type of person.” So, who is buying the units? According to Volkswagen their new model appears popular with cyclists and kayakers. Two main reasons are; their generous use of roof racks which are much easier to access than most SUV’s. The other is there is plenty of space in the back for equipment. Volkswagen is finding the soccer mom isn’t their prime customer anymore. The biggest group appear to be weekend sporting enthusiasts. The new V90 is prompting many Volvo drivers to hand in their keys from their current lease and wait for the new model to show up. However, they’ll be shocked to learn that the company will not carry an inven- tory in the US dealerships. Customers looking to buy a V90 will place their order and the car will ship from Torslanda, Sweden. The car makers are confident that price isn’t even a big concern. The Mercedes E-class wagon base model is going to have a window sticker that is 20% higher than the basic E-class sedan which starts at $62,000. The difference is explained by the standard equipment that comes on the wagon such as 4-wheel drive and a few other wagon specific standard features. A station wagon is a dream product for manufacturers. From an engineering perspective, they are the same as a sedan from the B-pillar forward. The economics work well also as there is virtually no added cost but a significant increased price which is very welcomed. Todays wagons are far superior to the ones that once ruled the highway. The Mercedes E400 has two-tur- bos and nine transmission speeds making it a nimble and capable ride to get you through the most demanding traffic. Volkswagen’s Golf Alltrack has a sportier feel. The smaller engine is mated with a turbo that is whiny but capable. It’s half the price of the E400 but with features like AWD it still performs well. Right now, the station-wagon market segment belongs to Europe. They are the one making the best wagons out there and the new models will only drive sales higher and demand on this side of the pond making it only a matter of time before US car makers follow in North America with more product offerings. To put that in perspective Ford sells that many pickups every month. The data on the wagon is demand related but also tied to production choices by car makers. In North America car makers stopped parking wagons on their lots choosing to save the space for faster selling models.
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APRIL 2017 • SPOTLIGHT ON BUSINESS MAGAZINE
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