Wednesday, September 21, 2005

Kudos To FoMoCo

That's right, it's not a typo. I am giving kudos to FoMoCo. ME. DCS. No, you are not hallucinating. But why??

Well, according to the Sept. 19th edition of Automotive News, Ford, NOT GM, is adhering to value pricing, another idea cooked up by GM. Value pricing, blogged about here by yours truly, will eliminate big rebates and price the MSRP closer to transaction prices of 2005 model year cars. The average price decrease for Ford per vehicle was $506 compared to GM at $300. Although not much, Ford is making progress in this department to stabilize a volatile market.

It will be a long road to recovery, but at least we are seeing some progress now.

4 Comments:

At 3:23 PM, Blogger M.Z. Forrest said...

Everyone whores cars when you get to the proper part of the month. Having worked at a former Senate candiate's dealership north of Milwaukee, I know what you are getting at with the Zigler thing. I think you are digging your own deathbed if you try to make money as a salesman on margin.

 
At 4:26 PM, Blogger Disgruntled Car Salesman said...

Not the point I was trying to get across...

Margin is the only way to make money as a salesman. I am paid on gross profit on a deal. If I don't hold profit, I don't eat (such a dirty word to consumers, profit, yeah I said it....)

The point I am trying to make is for the big 3 to move away from incentive based selling, and value pricing is the first in a long line of steps.

 
At 7:41 AM, Blogger M.Z. Forrest said...

Under most incentive structures I would agree. The problem I had was that so much of the gross wasn't counted. Most don't get the holdback included in gross. Although I don't know this definitively, a lot of the dealers make their money on volume bonuses which aren't included. There is no way Wilde Toyota could make money if they weren't doing this. (I know they try to make money on the financing, but still...) Don't get me started on the pack. You also have the famous GM penciling up the trade in. Some dealers won't even include rebates in the gross. Let's face it. In half our deals, we are (my case were) glorified order takers. The $75 mini ain't gonna put food on your table, but you'll increasingly see more of your deals go that way. Just wait until we are competing against Chinese cars. Leather and all the bells and whistles for under $20K. Try selling a loaded Camry against that. The dealers aren't hurting; the salesmen are a different issue.

 
At 7:53 AM, Blogger Disgruntled Car Salesman said...

Well, I am not hurting... I can sell the value of my product, price and service.

 

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