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Re: Value Pricing - This may be war!!! (archive)

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Posted by Ray Chen on September 27, 1999 at 01:28:23:

In Reply to: Value Pricing - This may be war!!! posted by MikeW on September 26, 1999 at 23:40:00:

At least in the Bay area, Mercedes dealers have been charging a straight MSRP for all but their least popular models anyway.

And since when is this a matter for the FTC? Oh, mister government, now that nasty evil car company is going to sell their cars for the advertised, published price! How dare they! Bad car company. Naughty car company.

Seriously, though. In this day and age, a buyer can walk into a dealer with exact cost and finance information. Actually making the deal is a negotiation process that probably leaves most people thinking they got a lousy deal when in reality, most people got a reasonable deal, a few people got great deals, and a few people got screwed. True fixed pricing means the car companies and dealers can forecast their exact per-car profit as opposed to guessing and the people buying the car know that nobody else got a better deal than they did. From the automaker's perspective, this all sounds like a good thing. More predictable financials and fewer discontented buyers.

Still, trying to impose nation-wide fixed pricing is an interesting exercise when you think about the different cost structures across the country, especially how salaries and real-estate costs vary from area to area. But Circuit City and Saturn, and others all deal with this so there's no reason why BMW couldn't either.

- Ray

: As I mentioned in a previous post, I test drove a 323Ci Saturday. After the fun part, I talked a little business with the sales type person. Now what follows may just have been a come on to push me into ordering earlier than I want to. But if it isn't...

: He stated that after the beginning of the year that BMW is going to try to impose a Saturn like fixed pricing structure, with no bargining or further discounts. All dealers will essentially have the same price. He also stated (and if anyone can confirm or refute this, please do) that Mercedes is already doing this.

: Now maybe this is just a baldfaced attempt to get me to order, but if it isn't, something has to be done about it. Maybe a letter writing campaign/boycott, with mass complaints to the Federal Trade Commission to follow.

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