Safe Speed Forums

http://news.bbc.co.uk/1/hi/business/7866884.stm

Those American car firms are at it again. Their lots are full of cars nobody's
buying, but they put the price up, instead of down. They'll never shift them at
this rate.

thanks to our resident business expert for that insight

It always seems odd to me that car manufacturers are very reluctant to cut list prices, but are prepared to offer all kinds of discounts to buyers, which are often dependent on individuals' ability and willingness to haggle. Surely it would make sense in marketing terms simply to quote lower headline list prices.

But do people have a subconscious reluctance to buy cars that are perceived as "cheap"?

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"Show me someone who says that they have never exceeded a speed limit, and I'll show you a liar, or a menace." (Austin Williams - Director, Transport Research Group)

Any views expressed in this post are personal opinions and may not represent the views of Safe Speed

Yes. Howard Wheeldon certainly knows his onions.

Only if they are snobs. Even then, they have a strong reluctance to buy cars that are perceived as "dear".

PS: now that Obama has said "Buy American First", should we boycott Ford and Vauxhall?

If times are really bad then price drops don't help always. When jobs are threatened people just aren't going to be buying cars, however cheap. The fundamentals have to change first. Changing the price up if you aren't going to sell any just means if you do shift the odd one then there is more profit as your overheads have to be divided between fewer sales so you'd probably break even. You can't drop the price so low you'd be making a loss as each one would be costing you money to sell. It is a fine balance.

I noticed the "American car firms" reference in the OP.

I'm not sure about Vauxhall & GM.... but Ford Europe is certainly relatively independant financially and design wise, given the decision is stated to be due to the exchange rate issues (quite beleivable) its likely the decision was made at that level.. if not at an even lower level.

Yes, the British have showed time and again that they are prepared to cough up more
for the same stuff everybody else gets. It even was called "Rip Off Britain", wasn't it?

Maybe the Brits are snobs? Whatever the reason, they always hit the British where it hurts -
in the pocket!

If they want to shift units, they have to lower the cost. We can't pay lame duck
car firms a government subsidy to spend on storing unwanted cars!

I think it's a lot more complex than that. If you sell car "X" at price £Y and then you drop the retail price, you kick the 4rse out of the residual values of the ones that you'd been selling up until you dropped the price. This really upsets your previous customers who:
(a) see that they've had their backsides kicked and
(b) now have a car that (most likely) doesn't really belong to them yet and which they're still paying for - even though they could now buy a new one for the same or less that theirs is currently worth!

Despite my somewhat different taste in vehicles, we are actually very similar in that I never like to spend much money on cars and I certainly don't spend money I haven't got! I never buy new (or anywhere near new) cars, I maintain them myself and I rarely ever spend any money with the original vehicle manufacturer. As they tend to get scrapped (usually by me!) when I've done with them, terms like "residual value" means little to me (depending on how much tax there is left on it and how much fuel is in the tank)! Most people, however, spend a lot more oon their car. They tend not to keep it for very long and it's residual value is important to them. Their motoring costs them the purchase price of the car, less what they can sell it for, plus whatever they spent on it in between. It's a perfectly valid model and it works fine for most people. In fact, they might actually (if they get a good, reliable one) spend little more on their motoring than me!

have ford actually taken any money from any government yet ?

The government has no money of its own. It's all ours.

I don't know if they've had their snout in the trough yet.

i hope for your sake you're on pills for your blood pressure

Thanks for your concern!

I remember reading about a dealer (in the States) who tried this a while back. If I recall correctly it was called a "no dicker sticker" and was based on low prices, the price you see is the price you pay and no haggling needed.

His problem was that customers simply quoted his price to competitors and they undercut it knowing that the "nds" cost would not change.

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Nick

There is nothing new about this, MANY years ago I remember an occasion where the manufacturers dealt with an "oversupply" problem by sending large numbers of vehicles over to the channel islands to be "sold" to taxi firms that put 500 miles on the clock so they could then be shipped back to the UK and sold as "second hand"

There are no new scams!

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"The road to a police state is paved with public safety legislation"

I reckon that it's because they are in cahoots with the Inland Revenue. Company car tax is based on the list price, so if the list price is reduced the tax take goes down.

Some people will still walk into a dealer and pay list, or haggle a little for a little discount, get a couple of free options thrown in and feel they'd achieved something.

As the manufacturer, why'd you not want that to continue?

~
I've just heard of one case- a $60k (list) merc, the guys had it from new on lease at $299/month for 12 months, now he's purchasing it off the lease company for $24k.

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Fear is a weapon of mass distraction

Hmmm.
If the gov used all that money they've given to the banks so that their bosses can still have big bonuses to buy everyone a new car, it would cost only 600 billion and it would directly benefit the economy.
Instead of which the bank[er]s are using it to buy depressed shares so that they can make a killing later.
So, back to square one on the financial disaster front.

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The world runs on oil, period. No other substance can compete when it comes to energy density, flexibility, ease of handling, ease of transportation. If oil didn’t exist we would have to invent it.”

56 years after it was decided it was needed, the Bedford Bypass is nearing completion. The last single carriageway length of it.We have the most photogenic mayor though, always being photographed doing nothing