Dodge to cut back on greedy dealerships

[4406PAK]

I am not in the car business nor do I have any vested interest in dealerships.

What I do have a vested interest in is a capitalist nation.

Supply vs demand. You can rest assured if dealers sit on Challengers long enough the prices will come down. If you do not like the price you find at one dealer leave and go to another. At the present time there are 25 challengers in the Atlanta area unsold on dealer lots. I know you can find a dealer to sell at MSRP

I myself will order a 09 SRT 8 spring edition when avaiable and will pay below MSRP. This has already been agreed upon.

What should scare everyone of us is the fact that people on this forum wish to see dealers closed because they deem them greedy!!

Well maybe congress can come and bail people or dealers out of bad finacial situations for whatever reason, to be paid for by a added tax on all cars sold. Look at the bill just signed to "save" the housing market because of "greedy" lenders

Never fear if Obama is elected he will save all. Just remember his underscoring thought process.

"From those according to their ability to those according to their needs"

GOD BLESS GREEDY CAPITALIST!!! They are the reason we live so well.

[Hfd79]

I have to agree with SRT Pusher and 4406Pak.
I think the attack on "greedy" dealers is out of frustration by those of us on this forum waiting to get a Challenger. We see many '08s in the market, but either can't or won't pay the $6-20+k mark up. We all wish the dealers would just sell the cars at MSRP or, even better, below MSRP. As long as demand is their, it simply is not going to happen. We just have to have patience, because prices will eventually drop, they always do.
As for Obama, we all better get used to calling each other Comrade and living in a Socialist society.

[SRTpusher]

i reeeeely hope i didn't come off sounding like an ass.

this is what i recommend for those who want a 2008 any lower than what a dealer is asking.

go get a preapproval for a loan.

go to a dealer with a Challenger on the lot that is available. write down the VIN #. find a salesman in either internet sales or fleet sales. not all dealerships have this position. if not, talk to a sales manager. give them all of your contact information and your offer for the Challenger in writing. be cool, don't down on them for asking whatever they are asking. just submit your offer and give them good contact information.

the reason you have the VIN is to check on the unit from time to time to see if they have sold that unit. if it has been around for a while, then approach them again. realize that a vehicle has to be on a lot for 60 to 90 days before it starts to get "old".

your best chances for a dealer to cave in are at month end. there are still some volume incentives out there, but not nearly what there used to be. remind them a day or two before that your offer still stands.

this MIGHT work, i can guarantee you it wouldn't at my dealership - like i said, i guess our market is different in texas. heck we had another DEALER call to offer us $10k over for one of our sold units.

[JS29R0B]

Originally Posted by 4406PAK

At the present time there are 25 challengers in the Atlanta area unsold on dealer lots. I know you can find a dealer to sell at MSRP

...I only shopped 2 dealerships and bought mine, #510, for $500. under MSRP...the deals are out here

[jptxchallenger]

From what I have been told it is not that a dealer sold their one allocated unit at a higher msrp. It was more to do with the ones that loyal customers ordered and then got a run around from the dealer when the car arrived.

Basically Chrysler wanted this car to draw back more loyal MOPAR fans and they wanted those loyalist who ordered them to get them and tell how great the car is.
What they are doing is looking back to see how many people actually got the car that they ordered. If they did not get the car, they are contacting the customer to find out what happened.

That will not be the sole reason why they may drop a dealer, it may be more to what some others said as consolidating to Chrysler, Jeep, & Dodge into one dealer.

Not all dealerships tried to tack on an extra 5 to 15k to cars that were ordered for a customer. There are some good dealers too that did not do this and will earn more loyal customers.

Those loyal customers are not stupid and backed away not just from the dealer but from Dodge and the Challenger. Now only a few loyalist own the Challenger along with some rich guys with one in a garage and not being driven just to say they have one.


Anti-Gouging Plan Ties SRT8 Sales to Base-Model Challenger Allocation

[Hfd79]

Originally Posted by jptxchallenger

From what I have been told it is not that a dealer sold their one allocated unit at a higher msrp. It was more to do with the ones that loyal customers ordered and then got a run around from the dealer when the car arrived.

Basically Chrysler wanted this car to draw back more loyal MOPAR fans and they wanted those loyalist who ordered them to get them and tell how great the car is.
What they are doing is looking back to see how many people actually got the car that they ordered. If they did not get the car, they are contacting the customer to find out what happened.

That will not be the sole reason why they may drop a dealer, it may be more to what some others said as consolidating to Chrysler, Jeep, & Dodge into one dealer.

Not all dealerships tried to tack on an extra 5 to 15k to cars that were ordered for a customer. There are some good dealers too that did not do this and will earn more loyal customers.

Those loyal customers are not stupid and backed away not just from the dealer but from Dodge and the Challenger. Now only a few loyalist own the Challenger along with some rich guys with one in a garage and not being driven just to say they have one.


Anti-Gouging Plan Ties SRT8 Sales to Base-Model Challenger Allocation

We'll have to see if Chrysler's "Anti-Gouging Plan" has any teeth (I tend to doubt it will). What we do know is that approx. 25% of the 6400 '08s did not go to individuals, many '08s are being auctioned on e-Bay and prices are widely running $7-20k over MSRP. Each one of these things are what Chrysler said it was trying to prevent with its "plan."

[WO51]

Thanks for your open and honest advice..... this is how I've purchased all of my new vehicles...

To open some dialogue on how dealerships operate, I like to hear your position regarding manufacturers imposing restrictions on dealers that apply market adjustments -- and the fact it infringes on dealers rights... and being characterized as price fixing and some anti-trust mumbo jumbo.

which brings me to...

If dealers got together formally or informally.... which it appears they have.... and all agreed to apply a market adjustment on the Challenger -- isn't this in effect price fixing as well?

Also, I would like to believe at a time when Toyota has essentially moved in and stole the U.S. automotive market; the U.S. manufacturer dealer network would have a vested interest in assuring Chrysler, Ford and GM make a comeback.

We can label it capitalism or whatever one desires... I'm struggling with how "capitalism" has contributed to our downfall as a nation...

Originally Posted by SRTpusher

i reeeeely hope i didn't come off sounding like an ass.

this is what i recommend for those who want a 2008 any lower than what a dealer is asking.

go get a preapproval for a loan.

go to a dealer with a Challenger on the lot that is available. write down the VIN #. find a salesman in either internet sales or fleet sales.

[snip]

this MIGHT work, i can guarantee you it wouldn't at my dealership - like i said, i guess our market is different in texas. heck we had another DEALER call to offer us $10k over for one of our sold units.

[cdjdmrje]

Originally Posted by jptxchallenger

I heard this from an insider with Chrylser and they said that the 1st of the year 2009 they were going to possibly announce cutting some dealerships and they were looking at how some handled the sales of the Challenger as a way to gauge good and bad.
Has anyone else heard this yet?

False, most states are like Ohio, where state franchise laws supersede the weak manufacturer' franchise agreement, even with Toyota and Honda who are HOT franchises right now. It's not black and white. Some new dealers have signed an agreement for right of first refusal or to give the store back if they don't perform at market conditions or levels. What's wrong with that? Not that I'm disagreeing just wondering if people see a problem with that.

[JonW]

I've been around the car business all my life, so I'll throw in my .02 here.

Let's do some basic math. Let's assume that ABC Dodge has 200 new vehicles in stock at an average price of $25K each (and that might be low). At 8% interest, ABC is paying over $33,000 a month in interest expense. Let's say ABC sells 40 new cars a month at an average profit of $1000 each (doubtful). That's $40,000 a month in gross profit.

The holdback on those 40 cars will barely cover the floorplan expense, so that's pretty much a wash. From the $40,000 gross profit, ABC needs to subract a portion of the phone bill for the new car department, salesmen's commissions, sales manager's commission, a portion of the utility bill, and a portion of the dealer's salary. Also, the expense of a title clerk and lot porters need to be deducted. Not to mention any benefits such as health insurance for the above named employees.

That $40,000 gross profit doesn't go very far, does it? And we're only talking about the new car sales department. Hopefully the used car department, service, parts, and F&I will turn a profit as well. If not, then ABC is even further in the hole.

If ABC is lucky, they might have $10,000 net profit from the sale of 40 vehicles out of a $5 million dollar inventory. Most any financial guru would tell you that a $10,000 return on a $5,000,000 investment is not very good.

Given this scenario, it's easy to understand why a dealer would try to make a little money on a hot product. I'm not saying that I am condoing price gouging, but maybe a little understanding of what goes on will keep some of the whining at bay.

[cdjdmrje]

Originally Posted by JonW

I've been around the car business all my life, so I'll throw in my .02 here.

Let's do some basic math. Let's assume that ABC Dodge has 200 new vehicles in stock at an average price of $25K each (and that might be low). At 8% interest, ABC is paying over $33,000 a month in interest expense. Let's say ABC sells 40 new cars a month at an average profit of $1000 each (doubtful). That's $40,000 a month in gross profit.

The holdback on those 40 cars will barely cover the floorplan expense, so that's pretty much a wash. From the $40,000 gross profit, ABC needs to subract a portion of the phone and light bill for the new car department, salesmen's commissions, sales manager's commission, a portion of the utility bill, and a portion of the dealer's salary. Also, the expense of a title clerk and lot porters need to be deducted. Not to mention any benefits such as health insurance for the above named employees.

That $40,000 gross profit doesn't go very far, does it? And we're only talking about the new car sales department. Hopefully the used car department, service, parts, and F&I will turn a profit as well. If not, then ABC is even further in the hole.

If ABC is lucky, they might have $10,000 net profit from the sale of 40 vehicles out of a $5 million dollar inventory. Most any financial guru would tell you that a $10,000 return on a $5,000,000 investment is not very good.

Given this scenario, it's easy to understand why a dealer would try to make a little money on a hot product. I'm not saying that I am condoing price gouging, but maybe a little understanding of what goes on will keep some of the whining at bay.

Bump. Your correct Total Dealership Net return on Sales is crap, less than 2% by most MFG, less than 1% for CDJ dealers. 0.2% Net return on sales in your case is what a lot of dealers saw last year for 2007. Although there are quite a few CDJ dealers posting profits so far this year. Service and Parts is where the money is at, so imagine what that means sales is at. BTW May was the first time in recorded NADA history that avg net on new cars was negative. Deals are skinny.