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It jibes with my explanation (archive)

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Posted by . on September 28, 1999 at 10:38:08:

In Reply to: MB "Keep the buyer" program explanation posted by Fred Meloan on September 27, 1999 at 10:02:12:

: 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.

Looks like MB's planned uniform pricing strategy is a promotional rather than monopolistic device. They're not setting uniform prices at current MSRP. They're lowering MSRP to "more realistic levels", i.e. the average selling price that they observe under non-unifrom pricing.

If BMW goes to uniform pricing. Rest assured that MSRPs will also go down to realistic levels.

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