Telluride with a $10,000 Premium in the US

Dealers Raise Prices as Semiconductor Shortage Drives Supply Shortfall

[Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Recently, Mr. A, an expatriate working in New Jersey, USA, was surprised while looking into Kia's new Telluride as a company vehicle. The dealer demanded an additional $10,000 on top of the Manufacturer's Suggested Retail Price (MSRP) for the top-tier model.

Lower-grade vehicles had premiums several thousand dollars lower. Due to the semiconductor shortage, fully equipped top-grade vehicles have become scarce, resulting in higher premiums on more expensive cars.

Mr. A said, "Prices were sky-high due to the lack of vehicles," expressing astonishment at the recent rise in vehicle sale prices. Eventually, he lowered the vehicle grade and paid a premium less than $10,000 to receive the car.

US media also reported on the premium attached to the Telluride. The Wall Street Journal introduced a story on the 29th (local time) about a consumer who gave up purchasing due to a $10,000 premium on the Telluride.

Mr. Ken Baird, a resident of Florida, offered the dealer $3,000 above the MSRP of $45,000 to buy a Telluride but was rejected.

Baird said, "I was shocked when the dealer said they would sell to someone willing to pay $10,000 more than the vehicle price."

Eventually, Baird purchased the Telluride’s competitor, the Highlander, at the regular price without a premium at a nearby Toyota dealership.

According to Baird’s experience, the top-tier Telluride has become more expensive than the Highlander, and even the cheaper models are selling at least at a similar level to the Highlander.

Besides the supply shortage, the Telluride’s superior product quality compared to competing vehicles is also cited as a reason for the premium. The Telluride proved its product power by winning the world’s most prestigious '2020 World Car Awards.' Compared to competitors like the Honda Pilot, it offers a spacious interior, various convenience features, and is popular for its muscular body.

Expatriate Mr. B said, "When looking into corporate vehicle purchases, prices had risen, and there was no choice except the cheapest 'base' model or the top-tier model."

According to research firm JD Power, as of mid-June, about 75% of all vehicles sold in the US are sold above the MSRP. This is significantly higher than the 36% before the COVID-19 pandemic.

The WSJ reported that a Kia spokesperson explained that dealers are independent operators and not affiliated with the company, responding according to market conditions. Vehicle sale prices in the US are controlled by dealers, not manufacturers.

This content was produced with the assistance of AI translation services.