By on June 22, 2017

lynk-and-co-model-02

Geely may be pushing the Lynk & Co brand as the most connected and tech-savvy in existence but its senior vice president Alain Visser believes its sales strategy should remain simple. With cars supposedly rolling out in Europe and North America for 2019, Lynk & Co is only planning to offer an extremely limited number of trim choices that rotate seasonally. It’s a fine strategy for an unknown element breaking into the marketplace but it does omit the ability to rake in the additional dough via optional extras. However, it also permits for lower production costs and a flat rate Lynk & Co claims buyers won’t need to bother negotiating.

How convenient for everyone. 

“In Europe and the U.S. we will have a maximum of 10 variants and no options. It’s brutally simple, but we believe that is what consumers want,” Visser explained to Automotive News Europe. “You can imagine how this reduces complexity, reduces cost — and the cars will always be in stock.”

That brutal, savage, caveman-level of unsophistication appears to include an inability to haggle for a discount. Visser said one of the most perplexing aspects of the automotive industry is that it seems to be the only one where customers negotiate the product’s final price.

Newsflash: It’s because cars (like homes) are a major long-term expenditure of funds and prospective buyers don’t want to overpay. Bargaining over a sack of groceries is a waste of time but the same cannot be said for a shiny new SUV when the stakes are so much higher. It’s also part of our culture. Haggling on an automobile is as American as baseball or selling guns to a third world nation to fight a war you helped start but refuse to finish. We bargained with the horse; we do it with the car.

Interestingly Visser only mentioned the sales plan as it relates to Europe. Is that because he was addressing a European audience or because the United States’ dealer model could make negotiation-free pricing an impossibility?

Lynk & Co has specified in the past that it wants to implement flat fees and direct sales globally, but hasn’t been able to specify if that will be true for the U.S. The concept of a competitive and fairly priced vehicle you don’t need to argue about in a little room for two hours is a lovely dream, though.

Whether or not the United States is ready for it, Visser said the dream will be a reality in Europe.

“Our prices will be the same across a currency, so in Belgium, France, the Netherlands, Germany, Italy and Spain [prices] will be exactly the same,” he explained. “Everybody compares with the competition in the market… for us, competition is also public transportation, Google, and Uber.”

In addition of normal ownership Lynk & Co will also be offering mobility service subscriptions which essentially serve as long term rentals. The brand also wants to provide full-time possessors the ability to rent their vehicles out to drivers in need using an in-car application that allows phone access similar to ZipCar. The Geely sub-brand claims it would be a good way for buyers to mitigate ownership costs or simply be a Good Samaritan to the neighbors.

Europe should have the Lynk & Co 01 crossover a few months prior to North America. It’s still unclear exactly how it will be sold in the U.S. but servicing is almost guaranteed to take place at Volvo dealerships.

lynk-co-01-sideview

[Image: Lynk & Co]

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17 Comments on “Lynk & CO Continues Promising ‘Brutally Simple’ Sales Strategy With No Haggling...”


  • avatar
    Lou_BC

    ‘Brutally Simple’ Sales Strategy With No Haggling

    Kinda like Walmart?

  • avatar
    dwford

    Finally someone admits that the one price from the factory business model will not mean better deals for the customers. One price with factory stores means no price competition and higher profits for the seller.

    • 0 avatar
      hreardon

      Bingo, dwford: everyone who screams “one price shopping” refuses to understand the market or human nature.

      Flat pricing trades competition for convenience.

      1. Yes, it would be good to allow manufacturers to sell direct. More competition is good.
      2. In a fictional direct-sales world the OEM would then own the dealership structure and all of the fixed costs associated with it.
      3. The sale of automobiles is not the same as iPhone sales where you can ship 50,000 units to one warehouse and quickly, inexpensively dispense them; Autos are large, cumbersome and expensive to move – moreso if you have to then re-allocate between regions.
      4. The OEMs would lose one of the greatest benefits of the dealership model: invoicing for the product the moment it is loaded onto the train/truck.

      In short, one of the big reasons the model continues today is that OEMs don’t want to be in the auto retailing business.

      Even if the entire industry went flat, direct sales you would not see prices lowered for the mere fact that the OEMs would have added an extraordinarily large cost structure to their operations.

      The brands who could probably pull off getting people to pay for the convenience factor are the luxury brands for whose customers time may be more valuable than money.

      Social norms are weird: nobody has a problem bragging about how much they pay for their attorney or doctor, but everyone has a story about how they beat up the dealership and scored an amazing deal on their car.

  • avatar
    Gardiner Westbound

    Toyota Canada tried “no haggle” pricing about a dozen years ago. It was discontinued after several consumer groups accused it of price fixing.

    The pricing tended to be on the high side. I doubt it would have succeeded.

    • 0 avatar
      hreardon

      And anyone who tries “one price shopping” at the dealership level usually gets slaughtered because customers take that price, walk down to the competing dealer and they then beat the price by $500, score the volume bonus money and steal all of the one price dealers’ business.

      Rinse, wash, repeat. Sure, you’re going to have buyers who like that kind of convenience, but as I always ask people who bring up this subject: “Why not just pay the sticker price listed on the car and be done with it?”

      Answer: because they always think they can get a better deal.

  • avatar
    Point Given

    Gardiner – correct. A couple of the veterans of auto sales around my dealership worked for toyota during that period. As a seller, it was fantastic (I’m told). Salesman focused more on the product less on the price battle. Customers didn’t have to run around to 3 different Toyota dealers to try and save $200 bucks as the price was the same everywhere. Some competition occurred on trading in values though, but nothing like it is today.

    Naturally, profits were higher and commissions were better so it is fairly fondly remembered by the salesman.

    https://www.theglobeandmail.com/report-on-business/toyota-kills-no-haggle-sales-price-strategy/article1000818/

    • 0 avatar
      hreardon

      Again: technically, the price *is* the same everywhere – it’s the sticker price.

      People conveniently forget about the markups and spiffs provided to retailers of everything from consumer electronics to jewelry and clothing. But when it comes to cars, we demand that spiffs, holdback and monthly bonus cash be part of the deal.

  • avatar
    bikegoesbaa

    All dealerships are potentially “no haggle”.

    If customers don’t want to haggle today there’s nothing preventing them from just paying MSRP+Fees+ADM and driving away happy.

    I prefer to have the option of haggling, and don’t see any advantage to the customer as a result of removing it.

    • 0 avatar
      hreardon

      *exactly*, bikegoesbaa.

      ADM is generally a BS tactic for 99% of cars, but if you’re looking for a unique model that is in high demand, then you’re got to pay to play or wait it out. Apple typically charges a premium for the first generation of any new product – those who have to have the latest and greatest pay the premium to be first.

  • avatar
    Forty2

    Saturn was flogged as “haggle-free” aka no discounts up until GM decided they weren’t special anymore and had them selling re-badged corporate crap. I bought a 1997 SL2 new and still regret that decision.

    Saturn doesn’t exist anymore. So this isn’t really a feature.

  • avatar
    scott25

    Limited options and trims is completely the wrong way to sell cars to young people without traditional dealers. It should be all about special ordering, personalization, making your car unique.

    • 0 avatar
      hreardon

      Scott25,

      I agree, but again, American culture dictates that we have to have it now, now, now. I’m sure there’s a segment of the population that would order and wait 6 weeks, but I suspect that number is fairly small. Sure, Mini does it, but they’re a niche brand.

      To get economies of scale out of a system with such unbelievably high fixed costs you have to control your variables aggressively, otherwise costs creep into the system.

      The other big issue with ordering is the shipping logistics and costs. Custom build a MacBook Pro and Apple can have it to you in 3-5 days thanks to air freight. Custom build a car and the lead time is significantly greater, plus then coordinating the shipping is a nightmare to make it cost effective.

  • avatar
    HahnZahn

    I really hate this company’s name. It’s just like all the cutesy Thimble and Whistle-type names for small-batch, online-only consumer goods that are popping up everywhere nowadays.

  • avatar
    Toad

    Lynk, an unknown brand, is going to have to establish itself in mature markets with many well known and deep pocketed competitors. A “No Haggle” policy is one of the few ways they can quickly, simply, and easily differentiate themselves: that makes it worth trying.

    Most buyers hate haggling over a car and assume they are taken advantage of when they do haggle and KNOW the are taken advantage of if they don’t. Arguably the only reason Saturn was successful selling otherwise unremarkable cars was the friendly and no haggle buying experience. If Lynk can replicate the Saturn purchase experience it may be enough to get potential buyers to walk on the showroom floor.

  • avatar
    PrincipalDan

    That crossover is an interesting mix of Rover and Jeep design cues. Before reading the headline I thought the picture was an ad for Rover.

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