Shucks, my closest SVT dealer was 100 miles away and supposedly never took a penny below MSRP for any Mustang Cobra. Not that the dealer wouldn't have turned away a deal above MSRP. That's a large part of the reason I didn't even give the Cobra a second thought when I ordered my Z28.

Now that SVT is down to what...zero products...I'm hoping that Ford pull the plug on their tinker-toy operation. There's no reason why a Mustang Cobra (or whatever they call the top-of-the-line 'Stang) can't be sold at every Ford franchise.

Remember, you could buy a SLP-modified Camaro SS at any Chevy dealer, there was not artificial production limit and no dealer price gouging I can remember hearing about. The SS was the success story of 4th generation Camaro.

The current wave of Mustang gouging will soon end, but Cobra buyers will face far worse gouging unless Ford terminates SVT's limited production and distribution.

 

1. GM cannot "disallow" dealers to gouge.

2. 05 GTO leak was not intentional.

 

Must have never bought a Honda. I was helping a friend buy a Pilot a few months back, and 75% of the dealers I called were selling for more than MSRP..

 

Selling a limited production automobile at MSRP that has no problem selling is a far cry from gouging.

You point out a very big difference between Chevy's "SS" and Ford's SVT. You buy an SVT vehicle, and not only do you get something that is limited in production, has a unique engine you can't get in other vehicles, or has unique handling, but you also get a whole host of other benefits.

1st, you have only the best dealers selling & servicing your car. You also get the best service when you bring your vehicle in. You also have your own hotline to SVT to voice issues, complaints, or praises. You have a hand assembled engine. In the case of the Cobra, Lightning, or Ford GT, if you, you can actually meet the person who made your engine if you are so inclined & feel like a road trip. You also have a vehicle that, unlike the SS badges slapped on our cars, actually hold their value when compared to lesser performance models of the same car.

SVT will be back next month at NAIAS. The reason they dissappeared for a year is that all their vehicles were being replaced, and they also had their role greatly expanded. Not only will they have a Mustang (the next Lightning is on hold till they find a way to drop some F150 weight) a Fusion, maybe a Five Hundred, a crossover, and will for the 1st time expand over to Lincoln Mercury.

 

redzed, you lost me. I don't know where this "policy" of mine came from, or how it applied to raping folks for a common V6 Mustang. I'll hand it to you though, you sure do see things differently than most folks do.

I challenge you to copy or post any link where I have defended a dealer mark-up of any kind.
In fact, I have been on record MANY times stating that I am for a totally reformed cost/sale structutre that is based on a percentage increase over the proven cost-to-produce. I think my rhetoric goes something like, "a 15-20% margin is plenty of profit for ANYBODY. If I'm willing and happy to take 8-10% returns on my own retirement investments, why do the auto companies have to have 80-150% returns on their product? Sell it for a handsome yet reasonable profit, and the marketshare will ebb your way in a hurry - that's how Toyota is taking market share right now... a little less profit per car, but on a LOT MORE cars."

As the pricing relates to dealers... well to each his own I guess. I don't berate any businessman from making a buck - that's what he is in business to do. But in MY OPINION, and if it were my business, I'd rather make the same profit by...
1) Selling 3, 4, or 5 Mustangs for Ford (increasing my ratings with them)
2) Having 3, 4, or 5 HAPPY NEW CUSTOMERS coming back to my dealership for their next car purchase or service work
3) Having 3, 4, or 5 more folks spreading word-of-mouth advertising about how they got THIS car at a GREAT deal at MY dealership
4) Having 3, 4 , or 5 more brand new Mustangs floating around town with MY DEALERSHIP'S LOGO on the trunk lid (cause it WILL be seen)

All that as opposed to making the same $5500 profit on the sale of 1 single marked-up unit, not to mention all the PO'ed potential buyers that not only didn't want to pay your stupid mark-up, but now will never come back to your lot to buy anything else because they have you pegged as a flim-flam, money-grubbing business instead of a legitimate stright-run operation that might actually care about the customer more than the money.

And PS - I think SVT is on-track as far as specialty and niche marketing goes. They charge a premium for specializing a production car into a unique one - no problem by me. Ford oversees the situation, approves the projects, and establishes pricing. I am not aware of any substantial dealer gouging on SVT products, and even if I were, I would not approve. Premium price for an exclusive product - sure... getting raped for a common cookie-cutter car - no way. I think it's bad business.

 

What makes you think there's an 80%-150% profit to the manufacturer on vehicles?

There isn't a 15%-20% margin on new sales for dealers. If you told a dealer he can make 15% on you he will have to sell above MSRP. Dealer profit is not in New sales other than F&I, otherwise it's parts and service at customer pay, and used vehicles.

 

Nissan has the highest margins in the industry (even higher than Porsche at the moment) and they are running at 10.8%

I do have my suspicions about the margins on a vehicle like a $63K Escalade ESV.

 

I live in Hawaii... I think our prices are far worse off than say.. California.
As an example:
November 29th and 30th my wife and I looked at a '04 GTO at a dealership here on Oahu. The MSRP was around 32K or so ( we looked at the 6spd manual and the automatic). There were 2 additional stickers in the window next to the MSRP, one advertising a $1500 "Enviromental Protection Option" that was dealer installed and could be dealer removed, and a $8500 " Added Market Value Adjusment". Total price for a 2004 GTO in Hawaii, at this dealership was a little over 42K.
After 3 hours of haggling, I had managed to get a decent offer for the wife's trade in ( a 2003 Nissan Xterra, V6, 4x4, all the bells and whistles except a supercharger and moon roof) and I had actually managed to talk the dealership down to 41K for the GTO. After receiving an impromptu economics lesson and some other low caliber sales techniques, I promptly informed the salesman and his manager that they didn't want to sell me a car, because there was no way I was willing to pay 10K or more over MSRP ( they refused to even mention invoice price to me, think it was somewhere around 27K??) and began walking towards the door. The salesman made a last ditch effort to make the sale by telling my wife and I that " GTO's are not distressed vehicles, we are selling them at a fair market price". Long story short, this dealership would rather sit on 4 GTO's than come down to a reasonable price, despite the fact the 05's are on the way. Oh.. the guys never once mentioned rebates, even though I repeatedly asked about the $3500 rebate on the 04's and the $500 rebate since I am in the Navy on active duty. Not sure whose pocket it would have ended up in, and I don't mind the dealerships making a little money off me in return for a nice car ( the wife loves the GTO, I drive a 2002 Silver Z-28), but this guy wanted to make enough money off his customer to take a 6 week vacation. There are very few dealerships in here in Hawaii that don't "adjust" prices somewhat, but this dealership was the first one I have been to that actually refused to budge on it.


SilZ28

 

It's been beat to death in this forum earlier this year.

As an example, Ford is capable of producing an Explorer for $13k - total cost-to-produce. They sell for upwards of $40k on a dealers lot or the web.
ALL cars sold in the states are incredible marked-up. Toyota can produce a Camry for $7k, but sells them for $18k. What's not an insane markup in this?!?!

You do the searches, I've already been there-done that.
I'll help start you out though...
http://web.camaross.com/forums/showt...=112181&page=2
go about 1/2 down the page and look for my posts - they have links in them.

Or go here...
http://houston.bizjournals.com/louis...y1.html?page=4
This is a 4-page article. Last line on the last page... "Analysts say pretax profits on the Excursion could reach $20,000 per vehicle. "
YES, THAT'S RIGHT. A $20k PROFIT on a $45k vehicle.
A.K.A. 44% profit margin.

I digress. Don't want to hijack this thread on this topic. The thread I linked to on this subject was like 5 or 6 pages alone.

 

Be clear about the term "margins". I'm not talking operating expenses, total cash flow, total ROI for the company or such.

I'm talking about model-specific margins between cost-to-produce and sale price.

If you factor overhead, engineering, advertisement, R&D, testing, and new technology development all into the equation, you are no longer model specific and you are referring to the company's operating capital (cash margin). That's a little different. That allows the company to exercise tax releif, claim losses in some areas, and get other reductions to profit before reporting. It opens the door to "hide" profits in areas other than how just one model of car sold and at what profit level. You know, "cash-cows can carry the dead rocks under the same roof and we still make money" type of thing.
Applicable in economics for the entire company - SURE - but different from a single model analysis.

 

non issue.

 

You have to include the price of doing business when pricing whatever you sell. You can't determine pricing on a cost to produce alone. The cost of doing business is necessary to factor.

The biz journal you point out was basing their figure on what "analysts" guessed.. I'd have to know the analysts involved to determine if they understand all the costs involved which have to be considered in pricing.

 

Gouging's everywhere,not just in the automotive industry.
For example,Go to Wal-Mart and cigarettes sell for $3 a pack. You find a buy one get one free 2 pack that clearly says taxs,promotion,etc. paid for by the MFG. but Wal-Mart still charges you $6 so there getting $3 free for every 2pack they sell even tho the mfg. never charged them for the extra free pack.

 

Lets please keep on the dealer-gouging issue... you can start another thread concerning manufacturer MSRPs and I'm sure we'll both get ample typing exercise there!

 

No sweat.