Crazy ADM with Gen 3 Raptors... any MSRP dealer in Md/Va/Dc/De?

[Chainsaw]

No biggie. I just think it's hilarious that people get twisted up that a business can sell their product for whatever they can get. You can crank out all the numbers you want, none of it matters. The market matters, that's it.

I'm not twisted up at all.

My overarching point is that the situation is not binary: there are more choices besides "omg communism" and "capitalism or death".

It is also not just simply about sales price, as there are many variables in the relationship between an auto manufacturer and it's dealer network.

I am sure Ford (and other companies) have studied this in very, very close detail over the years, in terms of how ADMs impact their bottom line.

But as someone else pointed out, the fact that Ford came out VERY explicitly against ADM on the Mach-E shows that it does affect them, they do pay attention, and they are willing to take action.

 

[GCATX]

Of course you are. As I think I implied before, I can see both sides of the argument. Ford is free to lock in prices if they want to, and dealers can do what's best for their business. I just don't think either strategy is evil.



When I was buying a house many years back, on lost on a couple deals because other buyer's were willing to pay cash and/or above the asking price. Seller didn't even bother to take a 2nd bidding step (whatever it's called). I guarantee when it comes to selling my house one day, I'd take an offer above asking price if I get one.

In Austin right now, you gotta bid 100k over asking price on any house over 400k. So an additional 25%. It has priced many out of the market, kind of like trying to buy a fancy truck you can't afford.

 

[GCATX]

I'm not twisted up at all.

My overarching point is that the situation is not binary: there are more choices besides "omg communism" and "capitalism or death".

It is also not just simply about sales price, as there are many variables in the relationship between an auto manufacturer and it's dealer network.

I am sure Ford (and other companies) have studied this in very, very close detail over the years, in terms of how ADMs impact their bottom line.

But as someone else pointed out, the fact that Ford came out VERY explicitly against ADM on the Mach-E shows that it does affect them, they do pay attention, and they are willing to take action.

Flip side. What if Mama Ford told the dealers they cannot sell below MSRP. Would you have an issue with that? And why?

 

[melvimbe]

In Austin right now, you gotta bid 100k over asking price on any house over 400k. So an additional 25%. It has priced many out of the market, kind of like trying to buy a fancy truck you can't afford.

Most of those buyer's are from California I bet, so to them, it's still a discount.

 

[melvimbe]

Flip side. What if Mama Ford told the dealers they cannot sell below MSRP. Would you have an issue with that? And why?

If that were to happen, dealers would be motivated to keep less stock on hand. They have to buy these vehicles (I think) so they won't want the risk of having a lot of vehicles that they can't dump for cheap when they need to. That would sort of artificially limit supply, and customers and Ford would be the losers in that game.

The other aspect to this though is that Ford (and other brands) offer manufacturer rebates to help clear out the model year, so you could argue that a dealer could still be able to move vehicles sticking with MSRP, factoring in discounts, if they just let Ford set the price.

 

[RotorHead695]

Anyone seen the Gen 3 pricing yet?

Yes, Cody posted it in the Facebook Gen 3 group.

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[Chainsaw]

Flip side. What if Mama Ford told the dealers they cannot sell below MSRP. Would you have an issue with that? And why?

No. My position is that manufacturers are (and should be) free to set pricing for their products.

The market will then decide if they have made the correct decision, and their business will succeed/suffer accordingly, whether through consumer choice or loss of dealership affiliation.

As an aside - and not sure it would ever fly in the auto industry - but in other sectors, manufacturers have set price floors like in your example in order to maintain the "prestige" of the brand.

 

[RotorHead695]

Personally I'm waiting for the sweet spot of year 3 in the Gen 3 lifecycle. Seems to me that during the Gen 2 lifecycle that is when dealers were sitting on tons of inventory and selling below MSRP. Plus, the mid-generation updates were done. Hoping by then you can get the 37" package without the awful blue color of the Recaros. I've only got 50k on my Gen 2 now, I can thrash on it a few more years before upgrading.

 

[GordoJay]

But as someone else pointed out, the fact that Ford came out VERY explicitly against ADM on the Mach-E shows that it does affect them, they do pay attention, and they are willing to take action.

This is a good point. The bottom line is that Ford's customer is the dealer, not the end user. Keeping your customers happy is fundamental to staying in business. When the customer goes so far as to do something that you think will damage your brand, you step in. Otherwise you stay out. Ford could require dealers to sell at MSRP. They don't want to. Arguably, they don't need to. Supply and demand will sort out pricing in short order. When trucks are in short supply, those who want them so badly that they'll pay extra will get them. If you fixed the price at MSRP, the friends and relatives of the dealer, the staff, or relatives of the staff will buy all of the inventory and flip it at the market price, pocketing the difference. The end user will always end up paying more for a scarce vehicle, the only difference being who makes the profit. If you somehow prevented this from happening, trucks would sell in minutes and there would be no inventory, so getting one would come down to what connections you have, Soviet-style. We all know how well that worked.

 

[K223]

I'm not twisted up at all.

My overarching point is that the situation is not binary: there are more choices besides "omg communism" and "capitalism or death".

It is also not just simply about sales price, as there are many variables in the relationship between an auto manufacturer and it's dealer network.

I am sure Ford (and other companies) have studied this in very, very close detail over the years, in terms of how ADMs impact their bottom line.

But as someone else pointed out, the fact that Ford came out VERY explicitly against ADM on the Mach-E shows that it does affect them, they do pay attention, and they are willing to take action.

True! But Mach-E is another world apart in regards to vehicle program. Raptor is a low volume performance vehicle as we know. Basically they will squeeze all they can price wise out of it.

The Mach-E is part of Fords future period. It’s the start of a what will someday be a high production line and now is looking for some market share and to prove it’s worth and value. They need to keep pricing consistent to what MSRP is advertised and keep along the lines of how it’s major competitor is doing it (Tesla). People can also be assured they can buy this car for MSRP and get the federal rebate and come out cheaper than a comparable Tesla at that. Ford doesn’t want pricing complications at this point. I am sure dealers are not happy with over site by Ford. But Ford makes the dealers product.