In Reply to: Value Pricing - This may be war!!! posted by MikeW on September 26, 1999 at 23:40:00:
The Sep 13 issue of Automotive News had a great story on Mike Jackson and the changes he had instituted as the President of MB USA. Basically, MB has lowered the dealer mark-up on 2000 MY MB's to 7% from 13% on the 1999 cars. The dealer hold-back has also dropped from 3% on the '99's to 2% on the '00 models. Dealer's can also earn an additional .25% on '00 models based on Customer Satisfaction scores. Basically the dealer markup has decreased from a total of 16% to 9.25%. My opinion is that MB hopes that it's dealers will now sell the car at MSRP due to the lower mark-up. Only time will tell how this approach works. Remember that dealers have the legal right to sell their cars at any price they want--yes both above and below MSRP.
There are also some additional services that MB dealers are now offering as a part of the new program. One of these is FREE roadside assistance for any MB, regardless of age. This service is restricted to gas, a jump start, or fixing a flat. (I assume that MB USA re-imburses dealers for these services.)
There is much more to story. Too much to repeat here but I think you get the idea.
Interestingly enough, Michael J. Jackson resigned as the president of MB USA this past week to become the CEO of AutoNation. Go figure !!