ADM and destroyed dealer relationships?

[melvimbe]

Not really. Capitalism doesn’t require the dealer allocation model. Capitalism would be me being able to place an order from any Ford dealer of my choosing, and get my truck in roughly the order that it was placed.

Allocations aren't capitalism. Agreed there, and that is part of the problem sort of artificially can create scarcity of supply. However, 'first come first serve' is not a tenant of capitalism. If it were, then auctions wouldn't be capitalism. You'd be selling the house to the first person that makes an offer. No, capitalism essentially means that the price is set when both buyer and seller agree to the price with a binding agreement. There certainly can be done with a first come first serve model, but not a requirement.

This allocation model is closer to crony capitalism, although that implies government collusion which isn’t the case here.

Allocation is more of utility of maximizing availability to the consumer when buyers are more restricted to local markets. It doesn't do anyone any good to send 200 Raptors to BFE because BFE dealer ask for the first. However, now that the market is more open and consumers are more willing to order a vehicle, rather than buy off the lot, the model gets in the way more than it helps.

True capitalism wouldn’t require me to purchase my vehicle from a dealer either. I should be able to buy directly from the manufacturer. That is changing, but the dealer model is a holdover from legitimate crony capitalism.

Don't think the ability to buy direct is a requirement to capitalism either. Perfectly legit to sell to distributers and out source all the customer service and costs with that, if you don't want that to be a part of your business.

All that said, you’re right about MSRP being a made up number.

In the end, the Raptor is a toy. It’s not a necessity for any of us. My money will be going elsewhere if I don’t get one at sticker. I’m not paying ADM for my raptor, or my GT3. Or anything else for that matter. I simply refuse to play that game. If that means I wait, so be it. If that means I find an alternative vehicle…then that’s how it goes.

So if a dealer is offering you $10k over MSRP right now, you'll reject. In 2023, if the same dealer will offer you MSRP ...that happens to be $10k more than 2022...you'll accept? Ignoring inflation, interest rates, or the cost of competing products? Would you buy at $5k over MSRP if resale value was trending to be very high over the next 5 years? That's the point. While I get why MSRP matters, it's really just a reference point and plenty of other factors are what really matter.

I bet a lot of people who are balking at ADM would pay it if there was no MSRP reference point. Then again, if there was no MSRP, there would be some other reference, like a market value index, that consumers would look at for a starting value for negotiations. Again, pretty much what happens with used vehicles.

 

[chris51080]

So if a dealer is offering you $10k over MSRP right now, you'll reject. In 2023, if the same dealer will offer you MSRP ...that happens to be $10k more than 2022...you'll accept? Ignoring inflation, interest rates, or the cost of competing products? Would you buy at $5k over MSRP if resale value was trending to be very high over the next 5 years? That's the point. While I get why MSRP matters, it's really just a reference point and plenty of other factors are what really matter.

I bet a lot of people who are balking at ADM would pay it if there was no MSRP reference point. Then again, if there was no MSRP, there would be some other reference, like a market value index, that consumers would look at for a starting value for negotiations. Again, pretty much what happens with used vehicles.

I have no issue with dealers charging ADM. I take issue with Fords allocation model which requires me to choose between ADM or not getting a truck. I never said ADM should end, but I do believe that it ruins customer perception of the dealer, and eventually of the brand as a whole. It’s very clearly soured my view of numerous individual dealers.

I’m not looking to sell my vehicle right now, but if someone wants to pay an outrageous sum, of course I’ll take it. But as you said, the used market doesn’t have an MSRP for reference.

There’s no point to having an MSRP if you can’t actually purchase a new vehicle at that price. Why bother at that point?

Regarding paying a “small” markup, no. I won’t pay any ADM out of principle. I couldn’t care less about resale value since I’m not planning on selling the truck. I’ll be buying it and keeping it. Resale is irrelevant.

 

[heybear]

I’ve heard many local community colleges offer Econ 101 courses.

 

[melvimbe]

I always related it to cheeseburgers or tacos when I was a teenager.

I’m trying to teach my kids the same concept though; a small Lego set takes them doing dishes for two weeks. It’s a good way to look at things in my opinion.

I don't know that I did a good job teaching my kids about money overall, but one thing I did do was just give them cash, $30 or whatever, when we went on vacation. The rule was, don't ask Dad if you can buy this or that thing, it's your decision. Sure, you can buy that candy, but you won't be able to buy that other thing you may want when your money runs out.

I can't say I did it to teach my kids the value of money, I did it so they would stop pestering me to buy this or that. Worked like a charm.

But anyway, they seem to have developed some sort of pride in ownership. They like the things they earned and bought themselves over the things that were just given to them.

 

[chris51080]

But anyway, they seem to have developed some sort of pride in ownership. They like the things they earned and bought themselves over the things that were just given to them.

It sounds like you did teach them well. I hope to get my girls there one day.

 

[DFS]

Does capitalism apply to Ford being subsidized between $800MM and $1.2B for EV manufacturing? I missed that day of free markets 101 and government interference. Same for GM over the years, unless we turn a blind eye to those facts and only look at it at the consumer end.

Yes I know, at the end of the day if I don't like ADM's don't pay it. And I won't because "capitalism" if that's really how you think the US markets operate.

 

[chris51080]

Does capitalism apply to Ford being subsidized between $800MM and $1.2B for EV manufacturing? I missed that day of free markets 101 and government interference. Same for GM over the years, unless we turn a blind eye to those facts and only look at it at the consumer end.

Yes I know, at the end of the day if I don't like ADM's don't pay it. And I won't because "capitalism" if that's really how you think the US markets operate.

Don’t even get me started in Government subsidies. Of any type.

 

[traxem]

Nah, I know they don't give a shit. I just know who will not be getting my business.
If they want to treat customers like that, Im just going elsewhere.

I also don't want to get in line ahead of other people. I thought I was quite clear when I stated that I wanted to be in line in the order I placed my order. Pretty straightforward.

As an F shareholder, I do care that Ford gets this figured out. I couldn't care less if I get my Raptor or not. I'll get it at sticker or less, or else I'll just get a different toy.

I’m a little confused. What do you mean “treat customers like that”? So far, it seems like your gripe is on price. You’re not unique. Everyone wants to get the best deal. A dealer who sells your dream truck at the lowest possible price treats you good whereas one who sells you one for the highest is abusing you. I am pretty sure these dealers don’t want your business just as much as you don’t want theirs.

 

[GordoJay]

... I do believe that it ruins customer perception of the dealer ...

All it's doing is showing you the true nature of your relationship. That can save you tens of thousands in the long run because you no longer think of any dealer as a good guy or any salesman as being on your side. There are standard psychological games that dealers play. Read a few books on the subject and then go car shopping. It's eye opening. And freeing. No dealer and no salesman, unless they're family, ever deserves the slightest break. Whoever has the upper hand gets to call the shots. That's the game, and those are the rules. So when there's a recession and the dealer is carrying too much inventory, go hard. It all evens out in the long run. Good luck.

 

[chris51080]

I’m a little confused. What do you mean “treat customers like that”? So far, it seems like your gripe is on price. You’re not unique. Everyone wants to get the best deal. A dealer who sells your dream truck at the lowest possible price treats you good whereas one who sells you one for the highest is abusing you. I am pretty sure these dealers don’t want your business just as much as you don’t want theirs.

They are going beyond the normal transactional relationship that one would have with a dealer, and instead getting greedy.

If they want a windfall instead of a customer, they will get neither from me.