Dealer asking for $2000 more....

[kdryden99]

The dealer bulletin announcing the unique e-Invoice for the Mach-E (MSRP = dealer invoice) was very specific about 2 points.

1. The dealers may not ADVERTISE the Mach-E for less than MSRP

"Dealers may not advertise or promote the Mustang Mach-E at a price, payment, or offer that is derived from a starting price that is below MSRP, less available public incentives."

2. The dealers can SELL the Mach-E for what ever price they want.

"Despite the restriction on advertising, dealers can transact with the customer at any price they choose (at, above, or below MSRP)"

Thank you for clarifying.

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[kdryden99]

OP let us know what happens with the dealer. I too wouldnt trust a dealer asking for 2k$ more non refundable either.

 

[methorian]

The dealer bulletin announcing the unique e-Invoice for the Mach-E (MSRP = dealer invoice) was very specific about 2 points.

1. The dealers may not ADVERTISE the Mach-E for less than MSRP

"Dealers may not advertise or promote the Mustang Mach-E at a price, payment, or offer that is derived from a starting price that is below MSRP, less available public incentives."

2. The dealers can SELL the Mach-E for what ever price they want.

"Despite the restriction on advertising, dealers can transact with the customer at any price they choose (at, above, or below MSRP)"

This was how I understood it from the beginning, it's just like "MAP" (minimum advertised price) pricing used by most manufacturers. Just like when you see a "sale" on website that requires you to add the item to your cart to see final pricing. That item generally has MAP pricing, so they can't flat out advertise the lower cost on the items page, you must add to cart with intent to purchase to see what they're willing to sell it for.

I'd be very surprised to hear of any sales below MSRP for the Mach-E in the coming months, but you never know, it's certainly possible.

 

[agoldman]

Why is this country hanging on so tightly to dealer based models? Does anyone like the dealer car buying experience? I've never heard anyone say that. Time to move into the future folks.

 

[malba2366]

Doesn't look like sale over MSRP. Looks like they wan't a bigger advance. If there was a schedule of advances that needed to be paid, it should be stated up front. I don't think I've ever paid more than 500$-750$ as deposit for a car from a major maker. That inlcudes luxury brands like Lexus and Volvo.

They probably just want a bigger deposit so the buyer won’t walk. Maybe they are worried about having a hard time reselling based on color ordered or EV demand in their local area.

 

[malba2366]

Why is this country hanging on so tightly to dealer based models? Does anyone like the dealer car buying experience? I've never heard anyone say that. Time to move into the future folks.

The existing automakers are tied into if due
to their franchise agreements. State governments will protect these dealerships in most states over an automaker who is in most case out of state. If Tesla gets big then the system will have to change because the legacy automakers will have a huge handicap due to the added costs of a private dealership network.

 

[Razorbak86]

Why is this country hanging on so tightly to dealer based models? Does anyone like the dealer car buying experience? I've never heard anyone say that. Time to move into the future folks.

1) Dealer footprint
2) Right to repair

Ford has over 3,000 dealers in the United States in close proximity to its customers, with an ability to provide local access to parts, maintenance, service, modifications, and accessories.

The nearest Ford dealer is 2.6 miles away from my house (6 minutes drive), and if I don't like their service experience, there are four other Ford dealers within 30 minutes drive. For comparison, Tesla has 130 stores in the United States, but none in the entire state of Arkansas. The nearest Tesla store is in Tulsa, Oklahoma, which is 111 miles away (~2 hours drive).

As @JayTee suggests, one of the reasons Walmart is so successful is because of its ubiquitous footprint. 90% of Americans live within 10 miles of a Walmart store.

 

[malba2366]

The dealership has to be given a certain margin in the sale price to account for salaries, buildings, owner profits etc. It adds more cost to the end product vs. a manufacturer owned showroom. This is Tesla's biggest long term advantage, and it will be very hard for others to compete on a price standpoint with an independent dealer network.

A manufacturer owned dealership would maintain the same inventory etc as a private dealership. This is globally more efficient because the manufacturer has access to lower interest rates to fund inventory, and they do not need to generate as much profit from retail/servide operations as an independent dealer does. Ford owns all of its dealers in the UK, and you can look to that as an example.

 

[SebastienMachE]

Ford.ca

I pre-ordered a FE last year, and the deposit I had to put was 3,000$ but fully refundable even the day I go to pick up the car. Never had any additional, but I know the salesman keeps trying to hassle me to buy extra packages and did try to markup the price. I've talked to him a few times now because the prices doesn't add up and he tries to wave them away as "Oh yeah, you added 2k extras on it.".... which I never did. I just ordered a normal FE. There's going to be some negotiations to be done on my side when I go and officially buy it. As in Canada, the FE is at 59k + 9k for the package, which means it starts at 68k. But on my current "pre-order" the price was set at 73k+taxes.

On Ford.ca, the price is 73k$.

 

[shutterbug]

The dealership has to be given a certain margin in the sale price to account for salaries, buildings, owner profits etc. It adds more cost to the end product vs. a manufacturer owned showroom. This is Tesla's biggest long term advantage, and it will be very hard for others to compete on a price standpoint with an independent dealer network.

Ford has almost 20 models. Tesla has 4 (plus 2 Powerpoint decks for Cybertruck and Roadster). Not even counting commercial and fleet sales. Ford dealerships have large inventory, so someone could go and buy a vehicle that day. Tesla wants you to order a car and wait for weeks or even months. Ford dealership inventory is owned by the dealer and doesn't cost Ford anything. These dealerships are worth millions of dollars. Even if Ford eliminated half of existing 3,000+ dealerships, they simply don't have the money to set all of them up as Ford owned. In fact, Ford tried to set up a bunch of Ford owned "stores" a few years ago. That failed.

A manufacturer owned dealership would maintain the same inventory etc as a private dealership. This is globally more efficient because the manufacturer has access to lower interest rates to fund inventory, and they do not need to generate as much profit from retail/servide operations as an independent dealer does. Ford owns all of its dealers in the UK, and you can look to that as an example.

It's not true. Some companies that own dealerships are actually much bigger than any car manufacturer and even own banks and financing companies so they have access to the best possible inventory financing. here is what it comes down to:

• Manufacturers win by not having to tie up billions or even trillions in maintaining inventory. They can also have many more sales and service outlets for their products than they could possibly afford
• Dealers win by staying in business (obviously)
• Buyers win by having some price competition between dealers and by having nearby places to have vehicles serviced. We haven't discussed fleet sales, but there just no way for Tesla to support that.

Back before Standard Oil got broken up, Rockefeller tried to make it fully integrated, down to manufacturing the barrels that the oil was shipped in and railroads that moved them. Do you know of any other industry, that still tries to reach that level of integration?

 

[malba2366]

Ford has almost 20 models. Tesla has 4 (plus 2 Powerpoint decks for Cybertruck and Roadster). Not even counting commercial and fleet sales. Ford dealerships have large inventory, so someone could go and buy a vehicle that day. Tesla wants you to order a car and wait for weeks or even months. Ford dealership inventory is owned by the dealer and doesn't cost Ford anything. These dealerships are worth millions of dollars. Even if Ford eliminated half of existing 3,000+ dealerships, they simply don't have the money to set all of them up as Ford owned. In fact, Ford tried to set up a bunch of Ford owned "stores" a few years ago. That failed.


It's not true. Some companies that own dealerships are actually much bigger than any car manufacturer and even own banks and financing companies so they have access to the best possible inventory financing. here is what it comes down to:

• Manufacturers win by not having to tie up billions or even trillions in maintaining inventory. They can also have many more sales and service outlets for their products than they could possibly afford
• Dealers win by staying in business (obviously)
• Buyers win by having some price competition between dealers and by having nearby places to have vehicles serviced. We haven't discussed fleet sales, but there just no way for Tesla to support that.

Back before Standard Oil got broken up, Rockefeller tried to make it fully integrated, down to manufacturing the barrels that the oil was shipped in and railroads that moved them. Do you know of any other industry, that still tries to reach that level of integration?

Most of this is not accurate.

1. Autonation is the largest dealer group in the USA, and it is much smaller than Ford in both revenue and Market capitalization.

2. Manufacturers are subsidizing the interest the dealers are paying on their inventory through floor plan support.

3. There is a facade of buyers winning and getting a "deal", but the truth of the matter is that the added costs of the franchise dealer model is being added to the end cost of the vehicle. There is no free lunch and the costs of the dealership model is added into the sale price of the car. The dealers also profit significantly from the warranty repairs so this is also added into the end price of the cars.

4. Automaker will not be able to simply raise prices if they get rid of dealers, as it is still an intensively competitive industry.

5. The Tesla model of ordering cars is the most efficient (cost effective) method, and is in fact how auto sales work in most of the world. However, There is no reason a manufacturer can not maintain that inventory in their own stores. In fact if a manufacturer owned all the dealerships, they could allocate inventory much more efficiently rather than dealing with dealership allocations and inventories.

6. Automakers owning the dealerships is hardly a vertically integrated monopoly. The manufacturer is still utilizing all of their existing suppliers.

 

[shutterbug]

So Let's unpack some of this:

1. Autonation is the largest dealer group in the USA, and it is much smaller than Ford in both revenue and Market capitalization.

Ford is about $148B. Berkshire Hathaway (owner of many dealerships) is $492B.

2. Manufacturers are subsidizing the interest the dealers are paying on their inventory through floor plan support.

So??? They still aren't taking all of the expense, complexity, and risk of setting up and managing all those thousands of dealerships.

3. There is a facade of buyers winning and getting a "deal", but the truth of the matter is that the added costs of the franchise dealer model is being added to the end cost of the vehicle. There is no free lunch and the costs of the dealership model is added into the sale price of the car. The dealers also profit significantly from the warranty repairs so this is also added into the end price of the cars.

Some buyers get a deal, some don't in the current model. If Ford owned all of the dealerships, most, if not all of the costs would still be there. Dealers profit from warranty repairs, they also profit from post warranty repairs. Sure Ford could probably adopt Tesla model and reduce warranty repair cost by eliminating most of the dealerships and making it difficult to get warranty repair work. I just don't see how that would help me.

4. Automaker will not be able to simply raise prices if they get rid of dealers, as it is still an intensively competitive industry.

There isn't as much competition as you think. Chrysler is still in business after decades of craptacular vehicles.

5. The Tesla model of ordering cars is the most efficient (cost effective) method, and is in fact how auto sales work in most of the world. However, There is no reason a manufacturer can not maintain that inventory in their own stores. In fact if a manufacturer owned all the dealerships, they could allocate inventory much more efficiently rather than dealing with dealership allocations and inventories.

Tesla's model is not most efficient, just because you say so. If Tesla didn't make you wait for 2 months to get a car, and actually had a reasonable inventory, their costs would skyrocket. If Tesla had a reasonable number of service locations, their warranty costs would skyrocket. If company owned stores were such an obviously great idea, why did Ford abandon their experiment? Oh wait, they were losing tons of money on it.

6. Automakers owning the dealerships is hardly a vertically integrated monopoly. The manufacturer is still utilizing all of their existing suppliers.

It's the next logical step in your argument. Suppliers supposedly are making a profit that's baked into the cost of the vehicle, and all of those parts have to be transported to Ford, so that they can assemble them into vehicles. And don't let's get started on the various ways that Ford needs to get the vehicles to their destinations. That also adds costs that we have to pay.

Ford and other automakers employ lots of reasonably intelligent people who are paid to think of these things, and still seems to need 3,000+ dealerships in US.

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