By on February 9, 2022

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You’re probably well acquainted with dealer markups by now. Supply shortages created during the pandemic have left the world with fewer automobiles and car dealerships are taking full advantage of the elevated demand. As you might have expected, this trend resulted in plenty of people overpaying or becoming cautious of a market they now see as wildly predatory.

Car manufacturers have begun asking dealerships to take it easy on the price gouging. General Motors made its plea last week and Ford has followed up by reiterating its own concerns during the company’s Q4 2021 earnings report. The Oval is worried that dealer markups are tainting its relationship with customers, with top executives making casual references to the trend back in November. Ford CEO Jim Farley is now telling dealers that they need to cut it out lest they be punished by the manufacturer. 

Ford also has concerns that price spikes will permanently taint the introduction of electric vehicles. It already wants dealers to include a no-sale provision on the upcoming F-150 Lightning similar to what happened with the GT supercar. While this has been challenged by consumer advocates and the right-to-repair movement, the fear that the first batch of all-electric pickups will be purchased with markups only to be flipped by private sellers asking even more remains very real.

Meanwhile, domestic automakers are starting to realize that they can’t operate at limited capacity indefinitely and that their current lineups might not be ideal for the times. I’ve often griped about the inherent dangers of manufacturers becoming fixated on high-margin SUVs and pickups. Once the economy hits a snag or fuel prices start approaching $4 per gallon, some people will start looking down-market and embracing smaller vehicles with better fuel economy.

We now appear to be approaching that scenario. But the industry is also on the cusp of selling mainstream and commercial EVs with larger price tags. Ford’s Lightning is supposed to start at $40,000 while the liquid-fueled F-Series begins at $30,000. Granted, the electric option is supposed to help customers recoup the higher point of entry by having lower operating costs and less maintenance. But it takes years for those savings to add up, leaving customers to weigh lower monthly payments against not having to pay at the pump.

“In the spring, we’re in the middle of launching F-150 Lightning. Few people ask us any more about why we phased out sedans, and many more asking when they could take delivery of the new Bronco or Maverick or Lightning. So we’re doing everything we can in our powers to increase our production and break constraints. We don’t like making our customers wait, and we’re taking action to ensure that they don’t pay unreasonable markups,” Ford CEO Jim Farley explained during the end-of-year report.

“We have very good knowledge of who they are. And their future allocation of product will be directly impacted because of that policy. And we’ve seen really quick action by our team. On the BEV side, this is quite an important topic because the margins that we want to build to in BEV are gonna be heavily dependent on a different go-to-market and customer experience. I won’t go into any more than that, but this is a quite important lesson for us of the franchise system and the way we will manage going forward.”

Mr. Farley did not explain what constituted unreasonable markups or exactly how it planned to tailor its management of the franchise system for electric cars. But he did repeat that the automaker believed only around 10 percent of dealerships were over the line during a recent interview with Fox Business, presumably indicating some willingness for price increases:

Farley’s warning came shortly after Ford head of sales Andrew Frick sent a letter to dealers stating that they could lose F-150 Lightning allocations if they tried to get reservation holders to pay additional fees for the electric truck.

Barclays analyst Brian Johnson has suggested the value of markups being applied by Ford dealers is worth upwards of $3.6 billion.

Farley added that it will be particularly important for the company to address pricing concerns about electric vehicles while rivaling the likes of Tesla and Rivian that operate direct-to-consumer sales models.

While markups can be modest, helping to absorb lost revenue from underwhelming sales, that’s not what’s happening. Many dealerships are simply adding tens of thousands to the sticker or in-demand models and refusing to sell anywhere near MSRP on everything else, resulting in record-breaking profits for larger retailers (backed by data from the North American Dealers Association). Meanwhile, smaller stores serving isolated communities averaging modest paychecks have been struggling.

Though it’s pretty hard to see the factory as the hero. Automakers have also taken advantage of the situation by eliminating incentive spending and rejiggering production schedules to prioritize vehicles with the fattest margins. Component shortages resulted in assembly lines being repeatedly idled while pandemic protocols sent many workers home — helping to reduce overhead.

Manufacturers may also use the dealer pricing to rationalize direct-to-consumer sales. With haggling having been largely abandoned over the last two years, the franchise model is making less sense to consumers with lowered expectations and automakers are becoming aware of this. This has created an opportunity for manufacturers to begin selling the idea of factory direct, negotiation-free sales as an improvement. Though that doesn’t automatically mean it would be, especially if there’s a chance for the market to return to the prior state of normality.

[Image: Ford Motor Co.]

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64 Comments on “Ford CEO Asks Dealers to End Markups, Plans Punishment...”


  • avatar
    ajla

    BUILD MORE VEHICLES!

    The markups are a direct result of you folks closing annual order banks on products in f*cking January.

    • 0 avatar
      FreedMike

      Agreed, and if I were Ford (or any other manufacturer), I’d want to build more vehicles. The problem appears to be that they can’t do that.

      • 0 avatar
        JMII

        Exactly. The only way to right this ship is getting inventory back to the point where you can walk onto a lot and have more then two vehicles to choose from.

        OEMs need to find a happy place where they can sell at MSRP to everyone one who wants to buy. However too much inventory and those factory rebates return to help move the metal. Dealers on the other hand love this new world where buyers are overpaying for the cheapest model before the vehicle even hits their books. They don’t even have to worry about color, trim or options. If it has wheels its automatically worth 5K more.

        I’m surprised OEMs are even bothering to advertise new models, because its not like you can actually buy one. I’d tell the marketing department to take a year off and invest that money someplace else.

    • 0 avatar
      EBFlex

      “BUILD MORE VEHICLES!

      The markups are a direct result of you folks closing annual order banks on products in f*cking January.”

      Ford doesn’t mind. Far less volume and all vehicles selling at MSRP. They are making money hand over fist.

      But in Ford land, only Ford can make money. The dealer can’t. It’s also the dealers fault that people are willing to pay these (ridiculous) markups.

      Ford would be better served to figure out how to get some level of quality into their vehicles rather than worrying what the independent dealers are doing.

  • avatar
    tylanner

    $3.6 billion in markups for doing absolutely nothing in a time of scarcity…these guys are detestable monsters…

    Tesla’s direct to consumer business model can’t come soon enough.

    • 0 avatar
      tomLU86

      A lot to unpack here.

      Now that the genie is out of the bottle (hint: reduced supply allow car makers to make bigger profits, and dealers to make even bigger ones), we are not going back.

      Peter DeLorenzo (who, like Matt Posky here, I don’t always agree with, but who I also find interesting reading) articulated the above nicely.

      To borrow some of his thoughts, if that is allowed here, what’s happened is that if you want to buy off the lot, if you need to see the different colors and test drive the car (good ideas, btw), prepare to pay dearly.

      But if you can wait a few weeks or months, you can order the car at pre-determined agreed price (hint: close to MSRP).

      Dealers don’t incur the costs of carrying cars in inventory and having to sell them. The MSRP gives them fairly decent, hassle-free margins, with less risk.

      Knowing that you will be paying close to MSRP, car buying will become more “transparent”, because, good luck getting a deal in the era of scarcity (unless the guy who ordered the bright yellow Blazer with the purple interior didn’t follow thru, lost their deposit, and the dealer has a car no one else wants it–those are the future “bargains”).

      My prediction: The automakers that have “better” cars and can build them will grow market share. The AMCs of the world (aka Nissan) will lose, and will have to improve their game–or have to improve their game AND ramp up production to put cars on lots–in other words, go back to life as it existed before the lock-downs of 2020.

      And that might work and force the other automakers to follow suit.

      But as it stands, there is a lot of incentive to keep supplies tight, while professing “we are doing all we can to increase supply and to deter dealers from taking advantage”.

      The supply of used car will not expand enough to offer a credible alternative to the new order.

      Now, as to Matt Posky’s point that abandoning inexpensive cars may not be prudent, I agree. Like all most CEO pronouncements McFarley’s “few people ask why we phased out sedan” blathering is self-serving BS.

      It is possible that demand for the more expensive offerings will go…down.

      Hyundai/Kia don’t need to flood the lots with their low end cars to pick up sales–they just need to be able to produce the cars ordered.

      And with the Telluride, they have proven that they can play with the big boys of Ford, GM, Toyota, and Honda in the large CUV segment, while surviving with lower-priced cars The US firms cannot make it with low-priced cars.

      I believe the Koreans will get those low-price sales. I believe Toyota will. I believe the Ford Maverick will ultimately become a $29,995 base truck, because Ford won’t be able to meet demand, so they may as well up-content it and dampen demand. They still sell every one.

      People have to understand that this is not 1965, when Ford (or any domestic automaker) could stumble into a winner (Mustang) and “turn the knob” and more than double production. Those days have been gone for decades. Today’s plants and processes are less labor intensive and more capital intensive. To be able to build the vehicle for the lowest price possible, you have to estimate how many the market wants (100k, 150k, 200k) and size your plant, and supplier plants appropriately. You don’t pay for “extra automation capacity” just in case. And you just can turn the knob on your robots to go faster. You are “capacity” constrained to X units an hour, and have 24 hours in a day, 7 days a week, before taking breaks for maintenance.

      Ford only planned for X Mavericks for two reasons: the official one is “caution” because planning for 200k units for a 100k demand car would result in a lot of capital costs that cannot be recovered. The unofficial one is that if 100k suburban cowboys and cowgirls might decide to forgo that big F-150, with it’s nice big profit margins, for Mavericks, there is a big hit.

      The Americans, sadly (and I’m an American) really can’t compete with smaller cars. In my adult lifetime, the only credible domestics were medium cars–the original Ford Taurus (which Ford wrecked with the overpriced replacment) and GM’s 2008-12 Malibu (which in fairness was the Nth iteration of the car, which GM wrecked by cheapening and shrinking the replacement). And I give the original Chevy Cruze a thumbs up (the replacement felt cheaper to me).

      Sergio tried with the Dodge Dart, and it turned out to be a Dodge F-rt. He then, logically, concluded, “let’s make crossovers and make money” and was the first to abandon smaller cars. They tried and the Dart just didn’t work.

      But, no need for alarm. The wise US government will move to save the planet with electric cars built by unionized workers—that sounds like the Detroit three. So they will have a lifeline.

      But who will give a lifeline to the Federal government and society in general, when it pulls us all under?

      • 0 avatar
        ajla

        “we are not going back.”

        So your prediction is that used vehicle depreciation is largely a thing of the past?

        • 0 avatar
          tomLU86

          We are not going back to the days of high prices adjusted down with big incentives, and end of month specials to move the metal. The incentives are gone. The high prices will stay–and then some

          Depreciation, I think the 1970s are a good metaphor, in that rising prices in the late 70s buoyed up prices of better used cars, especially imports from the early 1970s.

          We will have depreciation.

          One difference with the 1970s: 10 year old cars were pretty worn, and 15 year old cars were really beat. Today’s 10 to 20 year old cars seem much better to me, and there are many cars with 150-200k miles on them. So, innately, today’s 10 year old car has more useable life than a 1968 model. BUT, like a 1968 model, for some (fossils like me) a 10-year old car has less annoyance today (fewer touch screens), just like that 1968 Olds ran better and stronger than a mid 1970s Olds.

          • 0 avatar
            ajla

            “We will have depreciation.”

            It will have to be a lot less than it historically has been in the scenario you described.
            It is extremely unlikely to have a high-price, intentionally restricted supply new car market without a high-price, low supply used market to go with it.

          • 0 avatar
            deanst

            We’re never going to have automakers chasing market share? Dealers stuck with unpopular cars that they need to move off the lot? Manufacturers trying to get bragging rights for best selling vehicle, most popular luxury brand? I guess if you don’t believe capitalism is here to stay, that scenario may be possible. Otherwise, it’s just a matter of time before the supply chain corrects, and competition continues.

        • 0 avatar
          zerofoo

          Well…maybe to an extent.

          The current insanity in the car market is doing two things to our household.

          1. We have two middle-aged cars that we would have considered replacing if the market were more normal. We now plan to drive them until the wheels fall off.

          2. We are looking for a car for a new driver. I never thought a new car would be a good idea for a new driver, yet with used car prices as they are a new car makes sense – if we can find the one we want. This leads to another car that will probably be kept until the wheels fall off.

          It seems that when new cars are scarce or overpriced people hold on to what they know – which is their current car.

      • 0 avatar
        raph

        IMO always worth ordering exactly what you want. I haven’t really bought something off the lot in years. Whenever I’m interested in a new car I get with my dealer and spec it out then order. The only time I’ve ever had a problem was with my last car. Ordered a performance blue 2020 GT350 and the order somehow got lost and it was the end of production on the GT350 so the dealer offered a similarly equipped car in black at a nice discount. Loved that performance blue but the GT350 is just a satisfying car to drive I don’t really miss it and when it’s all dolled up the black car is a looker.

    • 0 avatar
      MitchConner

      @tylanner. Man up and learn how to negotiate. Direct to consumer is a terrible idea. I can swing great deals on cars and don’t want to give it up because a bunch of morons let themselves get stuffed.

      • 0 avatar
        deanst

        There will always be discounts, regardless of selling model. You can walk into most stores and get a discount on almost anything by using the right app, right credit card, etc. Direct to consumer will be no different.

  • avatar
    eggsalad

    The ultimate irony here is that if/when you have a problem with a Ford dealer and email corporate, they always respond with “We’re sorry. Dealers are independently-operated businesses and we can’t tell them what to do.”

    • 0 avatar
      sgeffe

      Trying to tell a dealer not to gouge as many people as possible is like telling a vampire to give up blood! Or a vegetarian to eat a steak dinner!

      • 0 avatar
        EBFlex

        Nobody is forcing people to buy the vehicles. So this whole notion of the dealer gouging people is complete BS.

        • 0 avatar
          raph

          Agreed EB, people are just impatient and willing to shell out the money. It just blows there are more people with deep pockets than there is inventory.

        • 0 avatar
          ponchoman49

          And there you have it folks. The American way of life has always been negotiation. People dumb enough to pay thousands over retail are going to have a real problem 2-3 years or more down the road when Covid becomes far more manageable and the market and economy recover. They will be so upside down on how much they still owe on a 5-10 year old rolling electronic nightmare of a clunker.
          Things can’t possibly stay like this. It’s not sustainable. Judging by other articles I have read many consumers including myself are hanging on to there rides far longer because the average price for a new vehicle has artificially soared up 10 grand in 2 short years.

          • 0 avatar
            deanst

            Exactly. I can replace my 10 year old Mazda with a 5 year old one which costs more than mine did when I bought it new. And I would bet that cars built 10 years ago are more reliable than the turbo charged, 12 speed, multi screen vehicles rolling off the lot today.

  • avatar
    Tirpitz

    Dealer that I ordered my Maverick from has promised me straight MSRP on the order and will take X Plan on it. But stock vehicles of all kinds on their lot all have $5,000 in markups on them. They have been careful to burry the MSRP information on the bottom of the listings. This is Southern California BTW.

    This is not just a Ford problem. We looked at a RAV-4 plug-in last summer and the Toyota dealer was demanding $7,500 over sticker for it. Walked out on them.

    • 0 avatar
      theflyersfan

      @Tirpitz – I posted something similar on an older thread. When I was MX-5 shopping, I visited the two Mazda dealers in town. One was selling all vehicles, from a $26,000 Mazda3 to a $50,000 CX-9 with a $5,000 markup. Sticker + $5,000 + fees/title/etc. Thanks but no thanks. The other dealer, which shares a building and lot with the VW dealer I purchased from, wasn’t playing markup games. The sales manager told me that when inventory started getting tight, they had an all hands meeting and they voted not to mark things up. It’s sticker + fees. In my case, being a repeat customer, they did nudge things downward a bit on price, so I signed the papers after the test drive with their demo. I kind of look at it as a somewhat win because I wasn’t fleeced, I needed to order a new car, and MX-5 RFs aren’t heavily discounted even in the best of times.

      • 0 avatar
        jkross22

        Huh, we had a similar experience with Mazda dealers a few months ago when we leased a CX-9. Nearly every dealer was playing games, adding bs fees, inflating the lease cost, etc. Until we got the deal that seemed reasonable without the profit padding.

        Dealerships seem to assume customers are fooking idiots and don’t shop deals. There’s this thing called the internet…. I guess it works for them but for how much longer?

  • avatar
    bullnuke

    The Ford CEO knows he has a secret weapon to force dealerships into line with his wishes…there are lots strategically located near Ford assembly plants nationwide loaded with 150,000 new but unsold loaded Ford Escorts equipped with PowerShift transmissions. Five of these Escorts will be forcibly allotted per marked-up vehicle that a dealer sells. The auto transport arrives at the offending dealership with a brand new F-150 Lightning along with five of these PowerShift Escorts. “We are The Ford”, chortles the CEO, “You will comply!”.

  • avatar
    thegamper

    I would say vote with your wallet but if you need a car, what are you going to do? You are going to have to go to a dealership. I guess the only protest you can really lodge is to buy a Tesla or other startup that isnt entrenched in the dealership model (Rivian, Lucid?).

    I will definitely google to see if any of my local dealership were fleecing customers next time I am looking, maybe go elsewhere……but when it comes down to it, most of us are going to buy where it makes the most financial sense in the end.

    I think the real hero is the independent mechanics out there that are working their butts off to keep older cars on the road longer because not enough new cars to go around. I am sure there is some fleecing going on there too unfortunately.

  • avatar
    CKNSLS Sierra SLT

    I just can’t imagine with what the EVs cost-that the traditional dealer model will work. The average household income for those purchasing EVs is going to be very high and those customers will not want to be treated the way traditionally dealers interact with people.

    One of the first things I had a dealer sales person ask me is what my current payment is and what my credit is like. I told him my current payment has no bearing on what I think his vehicle is worth-and then showed him (on my phone) my 824 FICO score, then I promptly left.

    • 0 avatar
      deanst

      Where were these people buying vehicles if the traditional dealer model doesn’t work for them? Buying used from Carvana?

    • 0 avatar
      thegamper

      Haha, I feel like something similar to that is almost the first thing that dealership sales staff will ask. “What do you do for a living?” “How much were you looking to pay?”

      I usually lie about my occupation when negotiating because telling people I am a lawyer somehow equates to a perception that I want to, or am willing to pay more. And when they ask how much I am looking to pay, I tell them I operate strictly from a “how much are you willing to sell it to me for” starting point. I never tell them what I am paying currently, always say this is one of many options I am looking at, always get up to walk out to see if they can give you the, “well, let me talk to my manager first”. Stupid games.

  • avatar
    RHD

    Buy a good used Lexus – you’ll get a lot more car for your money, and it will last much longer than most new cars, with fewer breakdowns.
    Meanwhile, with the lack of economically priced sedans in the market, it’s the perfect time for Suzuki to make a comeback!

  • avatar
    Jeff S

    It will be a perfect time for the Chinese to enter the market and I am not talking about Chinese made vehicles from GM and Volvo. The price of gas will go up, interest rates will go up, and the price of trucks and suvs will climb to the point where many will not be able to afford them and/or will not qualify for the loan. How much can the length of loans be extended? As for dealers they can still add to prices by requiring you take dealer add ons but then you can refuse and walk out. I do believe the longer this goes on the more people will demand to go to direct sales and this could eventually lead to the end of dealer franchise laws.

    • 0 avatar
      CKNSLS Sierra SLT

      Jeff S-

      You know I predicted the Chinese would enter the market some time ago. However-I did not take in to account China getting cozy with Russia, China acting aggressively (at least verbally) towards Taiwan, and lastly them building artificial islands to try to control or intimidate one of the worlds most important shipping lanes.

      In short, as much as the Chinese Auto Companies see the U.S. as a “big prize” the Chinese Government seems to have more important priorities.

    • 0 avatar
      sgeffe

      In that case, the people who can’t afford anything but bargain-basement new vehicles would probably be just as well-off taking their chances with whatever used inventory is cheapest, since I’m sure that any Chinese brand car will make the first years of Hyundais look like Lexus vehicles in comparison!

      • 0 avatar
        CKNSLS Sierra SLT

        sgeffe-

        Not true with some of the Chinese companies. They are already successfully selling in other parts of the world. GAC makes some very nice vehicles-
        https://www.gac-motor.com/en/models

        Of course-power trains and safety would have to be adapted for our market.

        You are doing the same thing others have done to Hyundai/Kia in years past, underestimating them.

        • 0 avatar
          Jeff S

          @CKNSLS Sierra SLT–Agree Japanese vehicles were once considered junk and so were South Korean cars and look how much their quality and image have improved. When I was growing up Japanese were known for cheap toys and cheap transistor radios. In the 60s and even in the early 70s Japanese cars were considered cheap and not up to the standards of American cars but after the Arab Oil Embargo of 1973 their image changed. The Chinese are doing the same thing and the quality of their vehicles have been improving.

        • 0 avatar
          sgeffe

          Duly noted. But from what I’ve been able to gather, the gulf between the Chinese manufacturers and the other manufacturers is greater than even the initial efforts by the Japanese and Koreans, especially if you factor safety and crashworthiness into the equation.

          Some of the crash-test videos I’ve seen of some of the Chinese vehicles in the Euro-NCAPs make some of the failures like the offset performance of the second-generation GM minivans look like the safest Volvos, Benzes and other makes with high marks for safety by comparison. To say that some of the vehicles folded like cheap Chinese lawn chairs is more than just an attempt at irony.

          • 0 avatar
            Jeff S

            True about the crash tests but that will change as they get better. The Buick Endeavor is made in China and it complies with safety and crashworthiness so I think the Chinese are capable. Here is a link to Ed’s Auto Reviews which is a tongue in cheek review of a Chinese EV and is humurous but informative. https://www.youtube.com/watch?v=q8siHtfoL5g&ab_channel=Ed%27sAutoReviews

      • 0 avatar
        Jeff S

        If decent used vehicles are available at an affordable price and those that are more affordable are not already used up There are between 12 and 15 million vehicles scrapped a year in the US and with a little over 12 million new vehicles available in the US last year that means there will be less used cars available in the next few years. Today’s new vehicles will eventually become tomorrow’s used vehicles. Cannot just turn a tap on and all the sudden have affordable used vehicles become available especially when the average age of vehicles has been increasing. Even before Covid there were shortages of good used vehicles with many dealers not getting enough trade ins. Many pass their vehicles onto children as their first vehicles or in some cases other family members. I myself have passed 2 trucks in excellent shape but older onto family members who needed them.

        • 0 avatar
          jkross22

          When new cars become more plentiful, the family trucksters will be traded in and the used car availability will turn around.

          • 0 avatar
            Jeff S

            It will take years for there to be an abundance of used vehicles and as expensive as some of the new vehicles especially pickups and suvs you will see more people keeping them longer even with high mileage. A coworker of mine details used vehicles for one of the big auto malls in Cincinnati and she said the number of trade ins has drastically reduced in the past 5 years and that was even before Covid-19. Her husband went back to school to learn computer programing because he is barely making a living. Before that his employer had more employees and he could barely keep up with the trade ins. Car loans have been extended up to 96 months to reduce the monthly payment and even the monthly payment on leases has gone up. Many people I work with are keeping their vehicles longer and many when buying a new vehicle are not trading them in but giving them to their teenager or young adult drivers. The used vehicle market will open up some in the next few years but it will never be like the good old days.

      • 0 avatar
        zerofoo

        The Chinese have spent the last 30 years stealing everyone’s intellectual property. They are now capable of building pretty much anything at any required quality level.

        I have seen enormous pieces of garbage come out of China, and I’ve also seen high quality and high precision technology come from there as well.

        I have no doubt the Chinese can build a car that will meet expectations in the west. The question is – does the west need yet another batch of car companies?

        That’s less clear.

  • avatar
    Jeff S

    Can’t disagree with you there but where there is a void someone will eventually fill it. It is not in our best interest in being more dependent on China especially with Taiwan and with their coziness with Russia. Putin wants free reign to put the old Soviet Union back together again and will not stop at Ukraine. There is also Vietnam, India, and more from South Korea who are eager to expand their market in the US. There will be a vehicle shortage for at least a few more years to catch up production and with used vehicles being in short supply. A total of 12 to 15 million vehicles in the US are scrapped each year and with somewhere around 12 million new vehicles produced for the US market due to chip shortages and other constraints. This is global issue as well. I can’t see domestic manufacturers deliberately restricting supplies in the long run because people will buy elsewhere and that will create a void in the market that some else will fill.

  • avatar
    FreedMike

    By the way, has anyone at TTAC reached out to good old Bark M? He’d have some fascinating insights here.

  • avatar
    monkeydelmagico

    Kabuki Theatre

    A couple dealers who are flaunting insane markups will get a strongly worded letter. The rest who are running a tighter ship will continue to fleece as hard and as fast as they can.

    It will take an up-and-coming player like Hyundai/Kia to blow the lid off of production in an effort to grab market share. Then everyone else will have to follow.

    • 0 avatar
      Art Vandelay

      Hyundai and Kia dealers are playing the same game.

      • 0 avatar
        Jeff S

        Hyundai says they will be making more of their own chips so they could very well increase production in the near future along with Kia to grab market share which they very well could gain market share at the expense of Ford and GM. GM is a shrinking company and is likely to get below 10 percent market share. I also think Ram will eventually increase production when more chips are available and eventually overtake GM to become No 2 in market share for trucks.

        • 0 avatar
          ponchoman49

          GM has been on a downward spiral for years and has literally shrunk to less than half of what it once was. If it wasn’t for the pickup trucks and SUVs they would not be relevant at all.

      • 0 avatar
        Daniel J

        I’ve been looking to see if either local Hyundai dealership has a Santa Cruz Limited to test drive. I have yet to see one on the lot that was already sold.

      • 0 avatar

        Yep but if they have more inventory it’s a harder game to play. The local Nissan dealers seem to be getting the most new inventory, and most don’t seem to be marking up much which means I’m seeing a lot of new Nissan’s on the road. I expect as H and K production ramps they will see the same.

    • 0 avatar
      jkross22

      Yeah, that’s my guess as well. H/K is well positioned for gains with desirable SUVs priced at least somewhat competitively. Their dealership model still sucks though.

  • avatar
    monkeydelmagico

    Kabuki Theatre

    A couple dealers who are flaunting insane markups will get a strongly worded letter. The rest who are running a tighter ship will continue to fleece as hard and as fast as they can.

    It will take an up-and-coming player like Hyundai/Kia to blow the lid off of production in an effort to grab market share. Then everyone else will have to follow.

  • avatar

    I remember everybody on this site was laughing at TSLA that they are not able to build more cars. Now they build over million a year and are planning to acquire Daimler Benz.

  • avatar
    jack4x

    A lot of people here who think problems with markups would be solved by going to a direct sales model should look at the number and magnitude of Tesla’s price increases the last 12 months. Is it really better to be gouged by the manufacturer rather than the dealer?

    I’m no huge fan of dealers, but it’s not as if they invented the laws of supply and demand.

    • 0 avatar
      ajla

      “Is it really better to be gouged by the manufacturer rather than the dealer?”

      I haven’t been playing close attention to Tesla prices, but here’s a dealer that marked a Versa up to $31K.
      twitter.com/jcreech3/status/1491471461671862277

      YMMV, but put me down for “better to be gouged by the manufacturer”. They are at least big and visible enough companies to have some degree of public oversight. The dealers are like spending time with carnies at the local fair.

      • 0 avatar
        jack4x

        The difference to me is that some dealer somewhere will always sell at MSRP (or better), it’s a matter of finding them. A $31k Versa is obscene, but hopefully unique.

        Whereas if Tesla raises prices (the Model 3 went up by $7000 in 2021) you’re just SOL.

        • 0 avatar
          ajla

          If you’re buying at MSRP then I don’t see an advantage from buying at a dealer vs (hypothetical) direct order.

          On under MSRP transactions how much of that discount is not from factory-backed incentives (whether public or volume-based)? I don’t have that answer, maybe it is more than I expect.

          I don’t think factory ordering should be compulsory or will lead to world peace, but I do think it should at least be *legal* for customers and manufacturers that want to go that route.

  • avatar
    ponchoman49

    My friend just bought and ordered a brand new Bronco Sport and paid 500 under sticker and got several thousand more for his 2015 trade in than the other guys were going to give. Not all dealers are crooks marking things up. You have to be patient and seek out the good ones. It can be done but people today are beyond lazy and ignorant.

    • 0 avatar
      FreedMike

      Agreed, not all dealers are doing this – the one I bought from last June gave me a decent deal – but there are certainly enough bad actors out there to make it a problem.

      And, yes, you can get a better deal by shopping around, but often times that involves traveling a long way to consummate your car purchase, and who likes that?

      Dealers have long had an awful rep, and the good ones suffer from the bad ones’ shenanigans. In recent years, this had changed somewhat. I think that was progress, but the clowns out there are walking that back.

  • avatar
    ToolGuy

    Ford Hates Kittens!!

  • avatar
    Hello

    I visited the Elkins, WV Ford dealership today, 5/22/2022. Ford Rangers and Ford Broncos had the Ford company price and information sticker in one window on the passenger side of the car and a sticker on the other passenger window. The small sticker was for the Marked Value of the vehicle. A $38K truck was now 41K. Looks like the CEO needs to get busy. This is not inflation. This is greed.

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