dealer markup

[Deanh]

I did pay full sticker for my SVT Contour and my Sport Trac both because they were first year, high demand vehicles. I didnt mind paying full sticker. I minded paying Over Sticker.

once again we go back to the GT500....big difference between that and the vehicles you mentioned...both in desirability AND the biggie...horsepower....HORSEPOWER = $$$$$$ unfortunately regardless of whom makes the car....ps...you should have bought the Sportstrac down here.......once again victim of locality

[falconman13]

Dean, you miss the point.

The vehicle is irrelevant. It doesnt matter if it was gold plated and supercharged. The point is, that because of the "surcharge" I went from a lifelong, loyal customer that would pay sticker. To an alienated bastard of a customer. Is that worth the extra 7 or 8 grand for a one time sale? If you say yes, then your business vision is short sighted.

[Deanh]

Dean, you miss the point.

The vehicle is irrelevant. It doesnt matter if it was gold plated and supercharged. The point is, that because of the "surcharge" I went from a lifelong, loyal customer that would pay sticker. To an alienated bastard of a customer. Is that worth the extra 7 or 8 grand for a one time sale? If you say yes, then your business vision is short sighted.

Falc you are definitely not the norm,.... to some/ a lot a good deal is never GOOD enough, and sad thing is that some spoil it for the others...unfortunately you....but the vehicle is the MOST relevent part of the transaction otherwise there would either be addendums on ALL vehicles or none at all, and truth be said if Ford had more built in profit in the 500 to begin with then perhaps the situation would not be a s bad as it is...i mean 3600 in a 43000 car is ludicrous....now if their was 15k, maybe this conversation would be moot....I do not rightfully know....and good/??????? thing is the said markup is only on a miniscule percentage of vehicles....2 cars for the whole YEAR!

Edited April 13, 2007 by Deanh

[Deanh]

Dean, you miss the point.

The vehicle is irrelevant. It doesnt matter if it was gold plated and supercharged. The point is, that because of the "surcharge" I went from a lifelong, loyal customer that would pay sticker. To an alienated bastard of a customer. Is that worth the extra 7 or 8 grand for a one time sale? If you say yes, then your business vision is short sighted.

I don't even get involved in these types of cars, find it dis-tasteful and have no desire...I get asked but all the time but explain basically my hands are tied. I don"t lose business over it at all to customers that understand...the crack ups are the brokers that whine and complain, tell me how many cars they have bought ( beaten the crap outa me basically ) try to fanagle all they can then say structure a deal and put 10 grand in it for them...ARRRRRG!

[partsisparts]

I can settle this easily. I think everyone should just pay window sticker for the car. whatever the window sticker says is what the car costs. This is the way it should be.

Edited April 13, 2007 by partsisparts

[xr7g428]

I think everyone should just pay window sticker for the car. whatever the window sticker says is what the car costs. This is the way it should be.

 

This is partially right. If Ford had gotten the pricing right, then there would have been no perception of gouging. If the car is advertised for $60K and you pay $60K, you got what you expected. If the car is advertised for $45K, but you are asked to pay $60K, then it feels like bait and switch.

 

The cars get priced to the point where supply and demand meet. At $45K, the demand for Shelby's was probably on the order of 15,000 cars. At $60K the demand drops to perhaps 5,000, at $75K it might be less than 500. By pricing the car too low, Ford set themselves up for a disaster.

 

If the cars were priced correctly, probably around $60K, the dealers would not have the opportunity to cut the buyers head off. there might have been some small bumps in the prices of early cars, but in general, they would have sold the cars and made a lot more money.

 

Car prices are very dynamic. The retail price spread between a base V6 Mustang and a Shelby is more than double. The cost spread is probably about 15% (this is guess). Ford is pretty good at putting money on the hood of the base car, but apparently unable to take the money when it is available.

 

Ford is still under the notion that the dealer is the customer. It will take a little Mulally magic to change that part of the culture. News to Ford: the dealers won't buy any more cars than they can sell. The customer is the customer. Get the customer through the dealer door, and the dealers will find it in their hearts to order cars.

[OAC_Sparky]

I think you missed his point. He says flat out that it was Not a loss for the dealer, which I take as him admitting that the dealer wouldn't have a hard time selling it to someone else.

 

But it will be a loss for Ford as more and more people get alienated with FMC because of dealer price gouging.

Exactly. Look Dean, we know how you feel on the subject, and it's your right to defend your decision.

 

Everyone has different priorities in their lives. I have my house and family and putting 4 kids through University; while I could afford it, dropping $60G on a niche vehicle is not on the list at the moment. But in 10 years, it might be.

 

But I'll tell you something. If I had no ties to Ford and I was driven off the lot by what I perceived as gouging, not only do you lose the Shelby sale, you would lose the second sale as well.

 

Because if I was buying a Shelby it would be in my garage from October to May, and I would need a second vehicle. Maybe a Fusion or an Edge.

 

I know, I know. Big deal, you'll sell it to someone. But Ford does not subsist on selling Shelbys. It's the Fusions and Edges and F150s and Tauruses that pay the bills...

 

Aesop said it best.

[Deanh]

Exactly. Look Dean, we know how you feel on the subject, and it's your right to defend your decision.

 

Everyone has different priorities in their lives. I have my house and family and putting 4 kids through University; while I could afford it, dropping $60G on a niche vehicle is not on the list at the moment. But in 10 years, it might be.

 

But I'll tell you something. If I had no ties to Ford and I was driven off the lot by what I perceived as gouging, not only do you lose the Shelby sale, you would lose the second sale as well.

 

Because if I was buying a Shelby it would be in my garage from October to May, and I would need a second vehicle. Maybe a Fusion or an Edge.

 

I know, I know. Big deal, you'll sell it to someone. But Ford does not subsist on selling Shelbys. It's the Fusions and Edges and F150s and Tauruses that pay the bills...

 

Aesop said it best.

mainstream and limited production vehicles are two totally different beasts...on is TOTALLY driven by desire..a "must have" attitude.....just watch Barret Jackson......don't see any Fusions or Edges there...and here lies a problem...say dealers do sell the Shelbys at window.....guarantee the customer WOULD turn around and make a hefty profit.....and there-in lies thye crux of the problem...it is what the market will bear.....and in reality Shelbys ARE 60k...not the suggested retail..... just like the SLR mercedes, any Ferraris, Lambos, limited Bimmers, small production Porsches, Chrysler 300's when they first came out, Honda 2000's when they first came out, Toyaota FJ's, and Prius.....so don't just blame Ford...it is industry wide...

[Deanh]

I can settle this easily. I think everyone should just pay window sticker for the car. whatever the window sticker says is what the car costs. This is the way it should be.

will never happen......the public will NOT buy a vehicle in large numbers if there are no deals ( barring limited production niche vehicles )....take away rebates and financing as well and the industry will die....sad but true...we are all pre-conditioned now and those teasers provide huge impetus...don't know how many times I have heard..."I'll just wait till the rate drops or rebates get bigger...."

Edited April 13, 2007 by Deanh

[xr7g428]

will never happen......the public will NOT buy a vehicle in large numbers if there are no deals ( barring limited production niche vehicles )....take away rebates and financing as well and the industry will die....sad but true...we are all pre-conditioned now and those teasers provide huge impetus...don't know how many times I have heard..."I'll just wait till the rate drops or rebates get bigger...."

 

Deanh, They won't buy the cars [b]you[/b] have to sell with out the deal, but they do buy large numbers of Honda's and Toyota's. The difference is the pricing. Ford over prices the base cars, and under prices the specialty cars. The dealer is left to find the true market price of the vehicle. The end result is a market where consumers are trained to know that the rebates are just around the corner, and that it is up to them to beat up the dealer for the right price. This has turned the dealer / consumer relationship into a contest.

 

I know Saturn tried to turn the market, and it worked after a fashion. Note that Saturn of all of GM's divisions, is still profitable. It would have worked better if other brands had followed suite, but it can never work until the manufacturer is willing to properly price the car. The closer the transaction price is to reality, the more likely it is that the culture can change.

 

Consumers deplore the lack of product knowledge held by sales people. Sales people know that product knowledge will not bring home the bacon nearly as well as negotiating skills. It should come as no surprise that the guys with great product knowledge and no negotiating skills wash out pretty fast, and the guys that can close deals work forever.

 

What would your day be like if you actually got to sell cars, instead of arguing about the price?

[Deanh]

Deanh, They won't buy the cars [b]you[/b] have to sell with out the deal, but they do buy large numbers of Honda's and Toyota's. The difference is the pricing. Ford over prices the base cars, and under prices the specialty cars. The dealer is left to find the true market price of the vehicle. The end result is a market where consumers are trained to know that the rebates are just around the corner, and that it is up to them to beat up the dealer for the right price. This has turned the dealer / consumer relationship into a contest.

 

I know Saturn tried to turn the market, and it worked after a fashion. Note that Saturn of all of GM's divisions, is still profitable. It would have worked better if other brands had followed suite, but it can never work until the manufacturer is willing to properly price the car. The closer the transaction price is to reality, the more likely it is that the culture can change.

 

Consumers deplore the lack of product knowledge held by sales people. Sales people know that product knowledge will not bring home the bacon nearly as well as negotiating skills. It should come as no surprise that the guys with great product knowledge and no negotiating skills wash out pretty fast, and the guys that can close deals work forever.

 

What would your day be like if you actually got to sell cars, instead of arguing about the price?

actually you are dead wrong on the Camrys and Hondas...check out their financing and Saturns now as well ...and rebates...check out the "fabulous" new Tundra....the imports have reacted to the domestics cutting into their market share I guess. As for pricing...similarly equipped Fords average 1-2000- 3000 cheaper...tack in financing and that figure grows AGAIN.....and thank god I don't have to get into too much backwards and forwards...I work Fleet/ fleetail as such....you may/ may not beat me by a bit but your inconveinience/ agravation will out weigh savings maybe 100 bux....in this business it is NOT what you know ( are you listening internet geeks ) it is WHOM you know....a transaction can take less than 30 minutes or take days for that last few $$$$...depends on how much one values their own time...

Edited April 13, 2007 by Deanh

[akirby]

It's not the pricing that's the problem - it's making too many cars. When you make more cars than the normal buying public wants to buy - you must discount them to get more buyers. That's why you're not seeing 300K/400K sales targets on new vehicles. You can make more profit selling 150K with no rebates than selling 300K with $5K on the hood. Not to mention it helps resale value.

[Deanh]

It's not the pricing that's the problem - it's making too many cars. When you make more cars than the normal buying public wants to buy - you must discount them to get more buyers. That's why you're not seeing 300K/400K sales targets on new vehicles. You can make more profit selling 150K with no rebates than selling 300K with $5K on the hood. Not to mention it helps resale value.

lot of truth in that statement...problem is Ford thought that by building a certain model 520 different ways...adds up to excess inventory because the spoiled public no longer compromises as they want it "just so". I say they streamline just like our arch rivals...if you want Navigation that is in package B, in which case you have no choice but as to get leather, heated seats and a roof.....or...you want a roof? thats in Bas well...as long as you get Navigation leather and heated seats.....kinda parallels the ...sure...any color as long as it's black.....

[xr7g428]

the spoiled public no longer compromises as they want it "just so". I say they streamline just like our arch rivals...if you want Navigation that is in package B, in which case you have no choice but as to get leather, heated seats and a roof.....or...you want a roof? thats in Bas well...as long as you get Navigation leather and heated seats.....kinda parallels the ...sure...any color as long as it's black.....

 

So the idea of giving customers what they want just doesn't play...

 

A friend just ordered a BMW 335i. They call him about 4 times a week with an update on how it's coming. In less than thirty days they had it built and on the boat, it'll be in his hands in less than 60 days from order. During actual production they called him every day to tell him that it took 16 hours for the upholstery to be completed and that the car was painted in his choice of color on a particular day... Probably all BS, but he calls his friends every time he gets an update, and he is so excited about it he is throwing a party for the cars arrival. I'll bet he sells a few cars for BMW. And before you say that it is an expensive car, it is less money than a new Super Duty. And this stuff doesn't cost money.

 

If Ford wants to win the game, they have to change the rules. Pull a page from Fords past and let people have it their way. When the car comes exactly the way you want it, EVERY car is a limited edition.

[Deanh]

So the idea of giving customers what they want just doesn't play...

 

A friend just ordered a BMW 335i. They call him about 4 times a week with an update on how it's coming. In less than thirty days they had it built and on the boat, it'll be in his hands in less than 60 days from order. During actual production they called him every day to tell him that it took 16 hours for the upholstery to be completed and that the car was painted in his choice of color on a particular day... Probably all BS, but he calls his friends every time he gets an update, and he is so excited about it he is throwing a party for the cars arrival. I'll bet he sells a few cars for BMW. And before you say that it is an expensive car, it is less money than a new Super Duty. And this stuff doesn't cost money.

 

If Ford wants to win the game, they have to change the rules. Pull a page from Fords past and let people have it their way. When the car comes exactly the way you want it, EVERY car is a limited edition.

just remember there are HUNDREDS of ways to order Fords...maybe 6 ways to order Bimmers..and a vast majority of potential customers are NOT that patient to wait the 6-8 weeks ordering turnaround......like I said and maybe you mis- construed...Ford needs to streamline and package options together....kind of like BMW and their "Sports package" or their "Winter package" per say....the reason that sometimes there are So many vehicles on lots is exactly like I said....too many ways to say..."Well it's fine except I need this option as well....." And yes the Bimmer is less $ than a superduty...also a lot cheaper to repair when he attempts to tow his fifth wheel....LOL!

Edited April 14, 2007 by Deanh

[Deanh]

So the idea of giving customers what they want just doesn't play...

 

A friend just ordered a BMW 335i. They call him about 4 times a week with an update on how it's coming. In less than thirty days they had it built and on the boat, it'll be in his hands in less than 60 days from order. During actual production they called him every day to tell him that it took 16 hours for the upholstery to be completed and that the car was painted in his choice of color on a particular day... Probably all BS, but he calls his friends every time he gets an update, and he is so excited about it he is throwing a party for the cars arrival. I'll bet he sells a few cars for BMW. And before you say that it is an expensive car, it is less money than a new Super Duty. And this stuff doesn't cost money.

 

If Ford wants to win the game, they have to change the rules. Pull a page from Fords past and let people have it their way. When the car comes exactly the way you want it, EVERY car is a limited edition.

and sorry...can't resist...limited addition 3 series Bimmer...NOW THATS FUNNY!

[xr7g428]

just remember there are HUNDREDS of ways to order Fords...maybe 6 ways to order Bimmers..and a vast majority of potential customers are NOT that patient to wait the 6-8 weeks ordering turnaround......like I said and maybe you mis- construed...Ford needs to streamline and package options together....kind of like BMW and their "Sports package" or their "Winter package" per say....the reason that sometimes there are So many vehicles on lots is exactly like I said....too many ways to say..."Well it's fine except I need this option as well....." And yes the Bimmer is less $ than a superduty...also a lot cheaper to repair when he attempts to tow his fifth wheel....LOL!

 

Deanh, you know how customers are always complaining about how sales people have no product knowledge? Well, I am not going to do that here. I know that BMW is not exactly the competition for you so it would be a stretch for you to know anything about BMW. In fact, it is obvious that you don't. My daily driver is an M5, and I have been driving BMW's since '82 so I have a pretty good idea of the history of the company.

 

There are literally thousands of way to order a BMW. Sure there are some packages, but they are just for starters. Some sales guys will even deny that you can do special orders to try to cut corners and save time, so it is understandable that you would not know about these things. But there are a few things you should know. To you a three series BMW is just a three series. Did you know they offer 10 variants in four different body styles? And this doesn't count the X3 crossover variants at all, or the M3 motorsports version... The top of line versions do have fewer optional choices; they all ready have everything standard. The closest Ford has come to this kind of variety was the Focus.

 

Here is a link to the BMW NA website. http://www.bmwusa.com/vehicles/

 

Did you know that they offer a service called BMW Individual where they will do virtually anything you want? You can send a color chip over, and they will match it. It is not new, they have been doing it since '92. They are rolling out the program broadly in the US right now so you will hear more about it in the future. http://www.autoblog.com/2005/11/28/bmw-soo...as-individuals/ It has always been available with European delivery.

 

I do agree that Ford customers should not have to wait 6 to 8 weeks, I have ordered two Mustangs since they came out in '05. The first one took more than 16 weeks to get and the second never arrived. The dealer ended up giving me a car ordered for stock, since I also bought an F150 S'crew Lariat from him that year as well. I know more about the allocation system than many Ford dealer employees.

 

Wake up and smell the coffee. The future is not going to go to those who do business as usual. Being more like the competition is not going to win the race. Ford has to create differences. The differences must be measured in how much better Ford is than the competition. I would challenge you and every one in the Ford food chain to find the things that you can do different, and better, than the competition.

 

Need help? What do people complain about? Those are your opportunities.

[xr7g428]

and sorry...can't resist...limited addition 3 series Bimmer...NOW THATS FUNNY!

 

Yes that is pretty funny! Addition is a mathematical operation, as in: adding additional dealer mark up.

 

I know you know that one!

[PolarBear]

Sorry if this has been addressed before but...

 

Ford wants to sell cars right?????

STOP the dealers from marking up the "desirable" one's.

 

I'm a current mustang owner, and I'd love to put money down on a shelby or on of the other speciality cars comming down the pipe.

I can aford to pay the sticker price, HOWEVER I can't afford to pay 5-20k over the sticker. Futhermore, I won't, especially when their are equivlent offerings from other manufacturers that do not entail this kind of gouging.

 

The dealers make enough money, they don't need this kind of gift at the cost of ford sales and bottom line.

 

Consider going to a pricing scheme similiar to saturn for these types of cars. You'll sell em by the bushel

 

I think you're forgetting who Ford's actual customer is. The end-user (e.g consumer)? Nope- the car is sold the second it rolls off of the convoy truck... to the dealer. High profit cars like Shelby's often get thrown out as bones for those additional orders being solicited for the stuff everyone's already loaded up with. The allocation game can be a strange one indeed.

Edited April 14, 2007 by PolarBear

[valen]

Very interesting conversation, but tell me, if ford only makes 15% more on a shelby over the base car and the dealer makes the other 85%.... shouldn't ford make more of them ????? if they make a more serious attempt to meet market demand their bottm line goes up thru volume..... workers work more hours...... more consumers get a car they like...... the only losers are dealers..... who STILL will make more money by selling more cars. It's interesting that the executive running the shelby program told motortrend two years ago that the shelby was NOT going to be a limited production car and they would make as many as people wanted. I think it's a culture problem, ford thinks that because 67 shelbys are rare the new ones should be too.

 

If you develop a product everyone wants, why limit it's availability....... if Edison and Bell thought like that your home still wouldn't have electricity or a phone. In fact limiting product selection and charging extra must be the reason retailers like walmart and costco are so sucsessful

[Deanh]

Deanh, you know how customers are always complaining about how sales people have no product knowledge? Well, I am not going to do that here. I know that BMW is not exactly the competition for you so it would be a stretch for you to know anything about BMW. In fact, it is obvious that you don't. My daily driver is an M5, and I have been driving BMW's since '82 so I have a pretty good idea of the history of the company.

 

There are literally thousands of way to order a BMW. Sure there are some packages, but they are just for starters. Some sales guys will even deny that you can do special orders to try to cut corners and save time, so it is understandable that you would not know about these things. But there are a few things you should know. To you a three series BMW is just a three series. Did you know they offer 10 variants in four different body styles? And this doesn't count the X3 crossover variants at all, or the M3 motorsports version... The top of line versions do have fewer optional choices; they all ready have everything standard. The closest Ford has come to this kind of variety was the Focus.

 

Here is a link to the BMW NA website. http://www.bmwusa.com/vehicles/

 

Did you know that they offer a service called BMW Individual where they will do virtually anything you want? You can send a color chip over, and they will match it. It is not new, they have been doing it since '92. They are rolling out the program broadly in the US right now so you will hear more about it in the future. http://www.autoblog.com/2005/11/28/bmw-soo...as-individuals/ It has always been available with European delivery.

 

I do agree that Ford customers should not have to wait 6 to 8 weeks, I have ordered two Mustangs since they came out in '05. The first one took more than 16 weeks to get and the second never arrived. The dealer ended up giving me a car ordered for stock, since I also bought an F150 S'crew Lariat from him that year as well. I know more about the allocation system than many Ford dealer employees.

 

Wake up and smell the coffee. The future is not going to go to those who do business as usual. Being more like the competition is not going to win the race. Ford has to create differences. The differences must be measured in how much better Ford is than the competition. I would challenge you and every one in the Ford food chain to find the things that you can do different, and better, than the competition.

 

Need help? What do people complain about? Those are your opportunities.

M5 nice car but TOTALLY different to your buddies run of the mill 3 series taxi-cab. AND before you jump to conclusions contrary to your beleifs I know Bimmers like the back of my hand...have had 3 and now drive BMW product that I ordered and waited for for 9 months...Cooper s...fun car..and ordering avoided the "markup" that was prevalent on local lots. That said the Shelby is a TOTALLYly different beast....name another car produced in the same numbers ,,,,ANY manufacturer......that WASN"T marked up? 10 varients ...I can only wish...your ENTIRE BMW varients across thye board is riduiculed by JUST the Superduty ordering guide...and I mean Bimmers ENTIRE line....so again fruitless comparison....and the color swatch is a GREAT idea...barring the order falling thru and the dealer getting burdened with a Mauve vehicle with lime green interior....

[Deanh]

Yes that is pretty funny! Addition is a mathematical operation, as in: adding additional dealer mark up.

 

I know you know that one!

M3's WILL fetch a premium when first released............already have a bud on a waiting list whom has bought 4 from the same dealer...even he is not getting a break...just elevated to the near top of the waiting list.........

[Deanh]

Very interesting conversation, but tell me, if ford only makes 15% more on a shelby over the base car and the dealer makes the other 85%.... shouldn't ford make more of them ????? if they make a more serious attempt to meet market demand their bottm line goes up thru volume..... workers work more hours...... more consumers get a car they like...... the only losers are dealers..... who STILL will make more money by selling more cars. It's interesting that the executive running the shelby program told motortrend two years ago that the shelby was NOT going to be a limited production car and they would make as many as people wanted. I think it's a culture problem, ford thinks that because 67 shelbys are rare the new ones should be too.

 

If you develop a product everyone wants, why limit it's availability....... if Edison and Bell thought like that your home still wouldn't have electricity or a phone. In fact limiting product selection and charging extra must be the reason retailers like walmart and costco are so sucsessful

sorry Valen i'm lost...15% and 85%?????we have less than 8 1/2 % in most cars.....INCLUDING the GT500.......and I would have to think availabilty also comes down to issues such as complexity of construction and availability of specific items such as blowers, wheels, engines, specific springs etc etc etc...and if you build more ( which dure to the afformentioned is not possible ) it also cheapens an image, cheapens the product, lowers desirablity and makes a vehicle more "mainstream.."

[Deanh]

Very interesting conversation, but tell me, if ford only makes 15% more on a shelby over the base car and the dealer makes the other 85%.... shouldn't ford make more of them ????? if they make a more serious attempt to meet market demand their bottm line goes up thru volume..... workers work more hours...... more consumers get a car they like...... the only losers are dealers..... who STILL will make more money by selling more cars. It's interesting that the executive running the shelby program told motortrend two years ago that the shelby was NOT going to be a limited production car and they would make as many as people wanted. I think it's a culture problem, ford thinks that because 67 shelbys are rare the new ones should be too.

 

If you develop a product everyone wants, why limit it's availability....... if Edison and Bell thought like that your home still wouldn't have electricity or a phone. In fact limiting product selection and charging extra must be the reason retailers like walmart and costco are so sucsessful

big difference between items that are REQUIRED as to those that are DESIRED....and there is probably more profit made in a day on Toilet paper in Walmart than ALL the shelbys sold in the States on ANY given day...........but hey that TP could be collectable down the road as well....don't know about the used market though.....

Edited April 17, 2007 by Deanh

[valen]

Again it seems to be a cultural thing, old cars are collectable.... so lets resrtict production of the current "cool ones" and they may be collectable as well some day. Who does this practice serve? it's a BAD business practice ( no wonder car manufactures are struggling so much, it seems they are their own worst enemies) If I want buy an investment I'll look at other things rather than cars ( I can do far better with realestate). I just wanted a car thats fun to drive at a FAIR price, ford has one, but they want it to be a collectable rather than a money maker............Really, after readfing this whole post it's glaringly apparent how disfunctional the auto industry has become. And, how ready for a downfall, when it happens it will be the best thing for consumers since the invention of the auto dealership....... nuff said.