Build Holdens like they will be doing anyway.

 

I figure an LS3 Camaro might see that much in markup from certain dealers, but I think 5,000 will be the most common. LS8 or whatever supercharged engine we get in a year or two -- that'll get marked up even more.

 

well where I was going with that was the holdens would already be built...


Suppose you were in charge. The first Camaros is ready to roll off the line today. Where would you ship it? You could ship it to a GM lot. Let it sit there until that lot fills up to a substantial amount to flood every dealer in the US while you maintain them. All the while pushing back the date anyone could own one. Or do you start shipping it to dealers lots?

 

No business like to hold onto any more inventory than necessary. It costs a fortune to finance and reduces cash flow. It represents assests that could be put to far better use elsewhere. And it's especially bad when that inventory is an eagerly anticipated product by your customers that could be turned to cash very quickly. Can you imagine the news stories about buyers clamouring to buy these cars while at the same time GM sits on tens of thousands of them and refuses to sell them?

Besides, a product like Camaro or G8 will probably be in relatively short supply throughout their entire first year. Each dealer is only going to get a handful of them, so it would be impossible to stockpile enough to "flood" the market.

For the average Joe that won't pay a markup, does it really make a difference between these two scenarios: 1) the car goes on sale in January and Joe has to wait until June to get one at MSRP, or 2) GM starts building in January but holds onto all of them until June, at which point everyone can buy them at MSRP. Either way, Joe is waiting until June. Might as well turn the cars loose from the beginning and let the first-on-the-block types pay the premium to get theirs.

I don't know how GM handled the launch of the G8, but with a hot production line I would have built a buffer of Holdens before the Pontiacs started, and then go like 80-90% Pontiacs for as long as possible. It would also be good to limit the markets that get them at first, to further reduce supply shortages (which probably explains why Canada isn't getting them until MY2009).

 

I was just answering your question, and honestly at that.

I think the answer is pretty obvious here, but I believe that almost every GM car sits at least a few days outside the factory (I know Corvettes do) and is checked before it ships, how long could/would they wait I don't have a clue, it ain't my line of work afterall.

 

You make a lot of excellent points. I’d just like to add one more benefit of allowing dealer markups. The extra profit on the high demand cars gives the dealers more room to haggle on everything else (including SSs & Z28s once the rush is over) without missing their revenue targets.

I can only think of three practical ways to allocate a limited number of cars to a larger number of would be buyers (markups, lottery, or build up a huge pre-release inventory). Of the three, I think dealer markups are best for all of us except the wife of the guy who pays way over MSRP and the guy who wins the right to buy an early Camaro at MSRP.

On the G8s I suspect that GM had to deal with limited shipping capacity and might have had to bid against the Asian automakers for space on the ships if they tried to bring over a larger number of G8s right away.

 

Well its not my line of work either. I was just questioning the GM holding lot theory. I have no doubt they sit outside a couple days. Im guessing that would pale in comparison both in amt of cars and to how long you would have to wait to "flood the market." At the same time Camaro is going to be a hot product that everyone is after. From a company standpoint I dont see one upside to having a huge staging lot.

I could be wrong, but I just havent seen anyone say anything other than it would prevent dealer markups.

 

We got our first g8 gt today...so beautiful...Our dealer is doing no markups......What you see on the window is what you pay....Im going to stick with my gto for awhile right now...

 

I am sticking with my GTO until the G8 GXP is released. Once it is released, I am going to shop around cars which include the G8 GXP, Challenger, new Camaro, and new Mustang. Kind of an weird selection of cars to cross shop in some ways but I like them all so I have to test drive them all of course.

 

I'll compare the G8 GT, G8 GXP, Camaro and see which I like best. The G8 has a big advantage, 'cause I really don't like the tiny greenhouse style that the new Camaro seems to have (I'll withhold final judgment until I sit in one).

 

Im trying to pay extra on my gto as much as i can, so in a year or so i can get either a new camaro or the g8 gxp and still keep the gto....Hopefully it works out that way....

 

Been wanting to adress this for some time, but haven't had the time to track down all the figures and email.

First, a $1500 markup is reasonable. As I mentioned, the local Ford dealer had a similar markup on a Bullitt. With the G8 GT, I can easily see a $1500 markup. $2000 at most, but only because they aren't quite easy to get just yet. But a $5,000 markup on a $30,000 CAR is like saying sure you can have dinner with Eva Mendez, but first you have to spend the night with Kathy Bates. It's just going to turn you off of the entire idea. In this instance, the idea of visiting your local Pontiac dealer to pick up a G8.

Next up, no one involved with Pontiac or even new GTO enthusiasts mentions anything regarding an "improper exhaust" as a factor in any GTO complaints. The exhaust as you know was dual all the way through. Most people seem to prefer the sound of the 2004 exhaust over the 2005 and 2006, which though louder lost some of it's tone.

The hood scoops were added to help the car look more aggressive, but you're dead wrong regarding sales and the assumption that rebates didn't light GTO's sales on fire. The numbers and results simply don't support you. Here's why.


July 2004, GTO had it's best sales month to date....897 cars.
August, GM began to finally get some of it's dealers under control...967 GTOs sold.

In September 2004, GM had a Red Tag Sale and included GTO in with incentives that knocked prices down to about 28K.

The result:
September GTO sales rocketed from 967 in August to 2,678.

GM continued to include incentives on the 2004 GTO all fall, but they were reduced. Again, the results:
October...1258
November...1130
December.... and keep in mind, this is the start of winter...2,952!

13,569 GTOs were sold in CY2004.

GM took the GTO off of significant incentives in January, and kept them off the remainder of GTO's production. Dealers stopped scalping the cars, and GTO settled into steady yearly sales.
11,590 in 2005.
11,268 in 2006
4200 left over GTOs were sold last year.

I contacted Jim Hopson early on about my own experience when I was looking to get a GTO. In a very diplomatic way, they said they recognized the problems and were working to fix them with the dealers.

Others I was in contact with at the time came right out and blamed 2 things almost in the same language and independently. First was a flawed early distribution system that favored Pontiac dealers that sold the most cars which unfortunately were in the exact areas (Northeast) where the demand for the car wasn't (the south and the west). The other thing was dealer greed.

Jim Wagners has repeatedly said (quoted the latest in the current Automobile magazine) that "Flawed" training of dealers on how to sell the new GTO, and the fact that potential buyers were restricted and/or prevented from actually test driving or even in some instances sitting in the car, which mirrors the experiences many including myself experienced. He (and others at GM, so it's not just me quoting one source) soured plenty of potential buyers which GM tried to rectify by putting GTO on incentives with everything else although they tried to avoid it like the plague.

I respectfully disagree on the idea that GM should have waited till the following year to bring out the GTO.

1. The Holden Monaro was already over 2 years old when we got it. The Commodore it was based on was already pushing 6. Delay would have simply given us a even older design.

2. Scoops and exhaust tips poking out of both sides of the rear as opposed to the same side didn't affect sales one way or the other.

3. The GTO had an expiration date. Revised interior passenger safety standards meant that the GTO could not be imported and sold in the US after September 1st 2006 without major investments in the interior. Something out of the question since it was based on an architecture that was scheduled to be replaced less than a year later.

4. Finally, delaying the car made positively zero financial sense:
a) You'd cut the return on investment by 1/3 (in reality, it was more than that)
b) The whole program would as a result, become 1/3 more expensive (and DOA).
c) The car already was a good package. It was the quickest, fastest, best handling GTO in history. It also was today what GTO was in the 1960s, a stealth looking, slightly pricey very quick car. People that complained and had issues with the new GTO weren't going to be pacified by a couple of hood scoops and pretty tail pipes.

I also have to (again, respectfully) disagree with dumping massive amounts of G8s all at once to keep prices low. What this will cause is:

1. Quality control issues. Pumping out massive numbers of cars means they have to be made quickly. They can't sit on the lots ($$$), so the lots would have to be filled quickly and cars would have to be moved quickly (transportation $$$).

2. Instant low resale value: initial flooding of G8s will cloud resale values long after introductions are over and the excitement dies.

3. Screwed up production: What happens to factory production after the market is saturated? Sales plummet, massive layoffs which GM would still have to pay full salary (more $$$)

4. Last but not least, you screw up the life cycle of the car and possibly damage it's history. What has happened in the past when a new car flooded the market and ranked up massive early sales only to see sales suddenly drop ? Hint: look at the sales history of the AMC Pacer, Pontiac Fiero, & Ford Mustang II for starters.

Unnaturally short life spans.

 

The car is gone now.

Was a Grey Mach 1. Slightly lowered, mint condition. Car was obviously well taken care of. No wear or tear anywhere. Had 87K miles.

In the end, I didn't do it because how many 2002 B4Cs are there.... let alone B4Cs assigned to a single CHP officer it's entire 3 years of service, complete with a bullet hole and a newspaper article about a car chase it was involved in?

Mach 1s are rare, but my B4C is rarer.


I would easily agree that we're going to get a bit more than ravaged when the new Camaro comes out, but GM is doing something ingenious:

Early in the production, most Camaros will be V8s.

The expectation is that the very cars that dealers will tend to attach extremely high markups on will be offset somewhat by high production proportions.

The Phoenix area is a very good place to buy new cars. The very 1st place I came across that wasn't scalping GTOs was in Tolleson. Same area's Dodge dealer was the only Chreysler dealer I ever saw that sold an SRT 8 Charger for less than a couple thousand over sticker (I think it was $1500... very resonable next to the $3K+ in most of Cali). Too bad if you work in California, you have to register & smog your car here.

 

Not allowing test drives is the best way not to sell a car. And it's not just Pontiac dealers. Back in 1998, an non-enthusiast friend was looking for a sporty coupe. He didn't like the Camaro (too low to the ground, too ... well, the usual complaints), so I took him to a Toyota dealer to look at the Supra. No test drives until you sign something (I guess you could back out if you didn't like it at that point, but we never got that far). My friend wasn't interested in the attitude, so we went to the Ford dealer and he bought a Mustang.

I found it ironic that you could go to a BMW dealer and take a $60K 540i for a test drive, but the Toyota dealer wouldn't let you do that in a $30K Supra.

You can bargain around the ADM, but you can't bargain around a no-test-drives policy.

No sitting is even sillier. Why did the dealer order the car?

 

I stopped by the local Pontiac dealer, but they don't have one yet. When I asked when they expected one the "manager" claimed they weren't even built yet. Although he did assure me they wouldn't be marked over MSRP when they did get them.