Beware the hype when buying the latest technology off the rank
The new-vehicle industry is no different from many others when it comes to creating a long-term marketing campaign that generates a wave of anticipation, expectation and publicity prior to the launch of any new product.
The latest in mobile phones, electronic software and televisions are good examples of manufacturers teasing consumers prior to launch with the benefits of the all-new compared with the current and soon-to-be-outdated product.
For the diehard fans and must-have-now consumers, it can mean an overnight camp outside a store to ensure they are the first to reach the sales counter on launch day.
In the car industry, it's more about filling up the order books and taking deposits prior to an all-new model launch, especially for low-volume and high-performance vehicles.
In this market segment the heat can dissipate quickly and the initial "sold-out" sign can be a short-lived honeymoon period for the factory, distributors and their respective dealer networks. Sales staff need to strike quickly and take advantage of the pre-launch hype while they can.
Makers of more mainstream vehicles can also produce their fair share of marketing hype about new technology, with claims of soon-to-be-released improvements in safety, economy and performance.
Early adopters may have to pay top dollar for the privilege of being the first off the rank to showcase the latest and greatest.
As the honeymoon period inevitably winds down, however, and instant demand for a particular make or model diminishes, prices can be realigned to re-stimulate consumer interest. This action ultimately creates a big depreciation drop for those first-in-the-door owners.
The all-electric Nissan Leaf which has been on the market in New Zealand for a couple of years now is a perfect example. Originally retailing for a touch under $70,000, prices have recently been slashed and the same vehicle now has an asking price of less than $40,000.
Thankfully for Nissan NZ, there weren't that many vehicles sold at the old price so there won't be too many grumpy customers. The Leaf should now appeal to a much broader range of potential buyers as an affordable and practical alternative to petrol- or diesel-fuelled motor vehicles. It's bound to create huge interest at the realigned price, especially for inner-city commuters and businesses, particularly now that fuel prices are on the rise.
So it may pay to wait until new technology that comes on to the market has settled down in terms of price and long-term reliability.
Being an early adopter of any new technology can also mean becoming a manufacturer's test pilot, with customer feedback and warranty issues often the catalyst for future improvement in reliability and performance.
One good example is the introduction of a continuously variable transmission (CVT) to the market. In the early days, I would tell anyone who was prepared to listen to avoid them like the plague because of their ongoing reliability issues. But sitting in my garage is a vehicle I purchased brand-new, and fitted with a CVT, that I thoroughly enjoy driving. It's a transmission I have no hesitation in recommending to buyers in the new-vehicle market.
I will also admit to being nervous when I first read about Mazda's new Skyactiv engine technology, and make no apologies for telling some potential customers to wait and let the market decide whether it matched the pre-show hype.
Once again, I now sing the praises of the high-compression engine and its ability to perform so well and on cheaper 91-octane fuel.
Waiting and watching the market can also be more beneficial for private buyers who replace their vehicles on an infrequent basis. They can't afford to walk away quickly from a vehicle that has ongoing or initial teething issues, plus any drop in the initial retail price will only mean a lot more pain when it comes time to sell.
So while at times it can pay to sit on your hands and wait for the dust and excitement to settle when any all-new technology is introduced, it is also important to keep an open mind. Things may start badly for a particular manufacturer but that doesn't mean they will stay that way for ever.
It's knowing where those clear points are that is important. That is why when purchasing a used car it is vital that some sort of pre-purchase inspection is carried out.
Try to talk to as many trusted sources within the industry as you can about the make and model you are considering.