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In Reply to: Disagree partially ... posted by CYT on August 04, 2000 at 11:51:01:
I don't think it's very short sighted to do so.
If you are a rich customer who buys and trades in car every year, then sure it's better to kiss up to you and give you deals on purchasing, while making money when you trade them in.
But in general, for people who leases a car every 3 years or buys a new car every 5 years, why would a dealer give up the oppotunity to make $100k on Z8 instead of banking on you come back to them every 3-5 years(while they don't make much anyway when you come back since they don't sell over msrp to you)?
Dealer has a lift span, they only live this long and work this long, so they try to make the maximum while they can, a $100k mark-up on a Z8 is worth selling 30 other cars below msrp to a loyal customer, but really how many customer buys 30 cars from the same dealer?
customer were the only measure of profitability, I would take your point.
Dealerships make most of their profit, not on the sale of new cars, but on service. Dealers grow their business, not only by market acceptance of what the manufacturer has to offer, but also through customer satisfaction and referral. I am personally aware of several long time BMW owners who have sworn never to business with a particular dealer who hosed them on a single car. To loose, not only that person’s future business, but all the people who he will bad mouth the dealer to is, IMHO, bad business.
While I am aware of several dealers who are holding auctions, the vast majority are taking care of their customers. That doesn’t necessarily mean selling at MSRP. Many are striking deals in the middle, between the absolute top of the market and sticker. Fair to both parties? Everyone has an opinion.
At least we all have the freedom to choose.
Bob
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