Does the dealer have power over your man purse too? I’ve read on several occasions, in various threads here no less, that -and I paraphrase- “we have the power to sway ADM…by not ponying up.” So who really holds the power? Not looking for a p i s s i n g contest, just asking a question. A lot of supply/demand professors here so no lecture needed. I’ve read y’all’s case study already! Take that North TX dealer, Grapevine, for example that has several on the lot each with a sizable ADM (as reported by a member here). Would you cave to their ADM or hold out till they come off that ADM…granted the trucks are not moving. Who would blink first, you or the dealer? Sure as hell won’t be me. They can get some other fill in the blank with your fav adjective!You obviously have no clue how any of this works, so I'm going to inform you.
Step 1: Ford produces a vehicle for x cost (x is a variable because it can change with supply - like our current situation)
Step 2: Ford wants to make y margin, so they create an invoice price of x + x*y and an MSRP price of z (just a reminder that this is a SUGGESTED price)
Step 3: A Ford dealership buys the vehicle at invoice and puts the vehicle on their lot for sticker = z
Step 4: That dealer can sell the vehicle for whatever price they think it will go for and falls within the margin (y) they are looking for to make a profit. z + z*y = price out the door
Currently, price out the door is above MSRP because there is demand and no supply (aka: dealerships have the power). Sure, Ford says they are trying to crack down on dealership ADM, but that's where manpower comes in. A rule/regulation can only be enforced with... guess what? Manpower.