It is interesting how two intelligent people can look at the same data and arrive at different conclusions.
A current case in point: Several car companies have recently taken to touting the fact that the transaction prices for many of their models has been rising. (Largely as a result of the options mix.)
The spin is that this is the result of successful brand marketing and customers are stepping up.
Don't be shocked, but I have a slightly different view.
In times of financial pressure, consumers look to be pragmatic. But, they also don't want to settle. This can play itself out in several ways.
One possibility is that consumers, instead of buying a new vehicle, buy a slightly used one instead. Same vehicle, same features, less money. We have seen this play out now for some time in strong demand for recent clean used vehicles.
Another possibility is that consumers might substitute a near luxury brand for a luxury brand. The important point here is they want the same features, so they "option up" the vehicle.
This would certainly explain Buick's recent sales success--and Ford's with the Taurus and most markedly Hyundai's with the Genesis.
So looking at things from a vehicle-centric view, we get the automakers' thesis--that consumers are stepping up. From a consumer-centric view, we get the one I just proposed--that consumers are stepping down.
We can easily test my thesis by looking at the vehicles being traded in.
Which we did. Turns out, this is exactly what is happening.
You can read more in Karl's piece on AutoObserver.