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Vehicle add-ons rev up auto earnings

Ian Thibodeau
The Detroit News

Carmakers are making the most of every sale by offering more elevated trim levels and special editions than ever.

Increasingly expensive and specialized trim packages offer everything from sporty looks to plush seats, flashy exteriors and more powerful engines. They add anywhere from a few hundred dollars to thousands of dollars to sticker prices.

The add-ons help carmakers reach a broader range of customers, implement newer technology on some models, buoy sales that are beginning to plateau after a record year — and fatten the bottom line, according to industry analysts.

Fiat Chrysler Automobiles last week announced a feature-packed Touring Plus version of its Chrysler Pacifica that bumps the price from $28,995 to $32,260. General Motors Co. introduced its premium Avenir option for Buicks last month at the New York Auto Show. Ford Motor Co., Nissan, Audi and Mercedes-Benz all have introduced cosmetic and performance packages over the last year.

When Mark LaNeve, Ford vice president of U.S. marketing, sales and service, premiered the updated 2018 Explorer ahead of the New York show, he revealed a startling figure: The average sales price of Ford SUVs has grown by about $4,000 in the past few years due to customers buying more expensive trim packages.

Ford offers several trim levels on most of its vehicles, ranging from $1,000 cosmetic tweaks to $10,000-plus performance overhauls. Ford says about 30 percent of customers opt for a higher-trim Explorer, and 56 percent of Super Duty customers soup up their trucks.

In some cases, trim levels let a customer tack on extras that push a mainstream vehicle into a sphere comparable to base models in luxury segments, says Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. “People who want all those features couldn’t (afford) those on a luxury brand,” he said.

Ford has boosted performance models available for the Explorer (a $13,695 up-charge), the F-150 (an $18,070 up-charge), the Focus (an $8,000 or $19,345 up-charge) and the Fusion (an $11,485 up-charge).

“It’s amazing what performance products do to expand your brand,” said Jason Mase, Ford marketing manager. “Performance is definitely attracting new people. ... There’s always going to be a value buyer in every segment, where the growth comes is either in performance or in appearance.”

Brauer says, “I think there’s a segment of the population out there that wants to feel like they’re getting something different from what everyone else has.

“It’s kind of the perfect thing for (auto companies),” he said, because the cost-benefit ratio favors automakers.

In the luxury segment, Audi of America recently announced a slew of Sport models that will launch in the next 24 months. Nissan expanded its Midnight Edition offerings to a handful of vehicles, which get the black-out cosmetic treatment. And GM debuted a new Redline special-edition trim line for nine vehicles equipped with black wheels with red hash-marks, black nameplates outlined in red, blacked-out grilles and black Chevrolet bow-tie logos.

GM this month announced the Avenir sub-brand for Buick. The premium package for the Enclave has a three-dimensional mesh grille with chrome wings and special badging; floor mats and sill plates with Avenir scripts; and 20-inch aluminum wheels in a pearl-nickel finish.

Pricing hasn’t been announced, but Buick says 90 percent of Enclave customers choose the current top two trim lines, which command starting prices some $4,000 to $8,000 higher than the entry SUV.

Some trim levels and special editions have been around for a while. GM launched the top-of-the line Denali trim for the GMC brand in 1999 on the Yukon SUV. The popular sub-brand last month represented 29 percent of GMC sales, and the Denali accounts for more than 60 percent of Yukon sales, said Phil Brook, U.S. vice president for Buick and GMC. Denali represents more than 45 percent of Sierra heavy-duty trucks.

GM has seen its average sales prices after incentives on vehicles increase in part as it has added higher trim levels. The upcoming redesigned 2018 Chevrolet Traverse midsize SUV is adding two trim lines including a top High Country and sporty RS. GM expects the two new trims will help boost sales of more profitable SUVs and increase average sales prices.

All of these are ways for automakers to get attention without adding a new vehicle to the lineup, said Stephanie Brinley, IHS Automotive Analyst.

“Some give you an affordable way to stand out,” she said. “It’s not all about driving up the overall price. ... Sometimes it’s also a matter to reach out to those consumers.”

That’s something Tim Franklin, head of cross car-line marketing with Nissan, said sets the Japanese automaker apart.

“Nearly all of our vehicles can be outfitted to suit customer needs, ranging from the economy-minded customer that wants a more basic S grade to the customer that wants all of the latest technology in our Platinum grade.” Franklin said. “(And) our top performance models offered on Juke, 370Z, GT-R and now Sentra, are all as a result of consumer wants and needs in the marketplace.”

Twitter: @Ian_Thibodeau

Staff Writer Melissa Burden contributed.