Is this about Tesla? I thought it was about negotiating price? What if Ford said all dealers must sell cars, trucks and SUV's at MSRP less rebates and incentives. How much more would the industry gain? Dealers would have to step up their game to win the customer. Apple sells the same price to all suppliers and they are industry leaders. Only difference is the service of the carriers. Wow what a novel idea. Sales people make money selling cars.
Tesla - The Good, The Bad and The Ugly
- Thread starter JessicaRuth
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- Dec 30, 2009
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Actually this happens in Mexico already.
Dealers MUST sell cars at MSRP, they get audited every month and if they don't they can lose their franchise. I believe they make 3% margin on sales. The dealers feel like a credit union/bank/etc, people have salaries with incentives based on a certain volume but... pretty much salary employees. Very different atmosphere than a US dealer. One big difference is that dealers have huge areas for sales with no competition, so the big game is to position the brand instead of the same brand stress fighting against each other.
Different ways, no better no worst.
Dealers MUST sell cars at MSRP, they get audited every month and if they don't they can lose their franchise. I believe they make 3% margin on sales. The dealers feel like a credit union/bank/etc, people have salaries with incentives based on a certain volume but... pretty much salary employees. Very different atmosphere than a US dealer. One big difference is that dealers have huge areas for sales with no competition, so the big game is to position the brand instead of the same brand stress fighting against each other.
Different ways, no better no worst.
- Apr 29, 2011
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I think what bothers people the most are the tactics associated with pricing. After a while it becomes gimmicky and customers eventually catch on (luckily people don't buy cars that often). The educated customers can walk away with incredible deals but those unprepared can just get worked over. From a dealers point of view I think fatter margins on the vehicles themselves (through a minimum advertised pricing program) would be a good thing but from an OEM point of view - I'm sure they'd rather you deliver as many cars as you can. Ultimately customers should be pointing their fingers at OEMs as they create the incentives in the first place.
- Apr 7, 2009
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Look what's happening to margins:
http://manheimconsulting.typepad.co...st-higher-used-sales-on-narrower-margins.html
What does this have to do with Tesla?
IMO, negative trending margins is evidence that our business is changing. IMO, we're watching an evolution (mostly created by Dale Pollak) where multi-roof dealerships find more profits from operations (i.e. volume) than hand to hand combat from opportunistic commissioned sales reps. This evolution reminds me of the death of the family farm. The small farmer can't compete with the mega farmer, so the small farmer sells to the mega farmer (think Warren Buffet funding Asbury). These new mega dealerships will be 100% focused on getting rid of any position that can't delivering a positive and predictable shopper/owner experience.
Net result: Shopper wins.
The tide is slowly shifting... there's a new day coming for us all.
http://manheimconsulting.typepad.co...st-higher-used-sales-on-narrower-margins.html
What does this have to do with Tesla?
IMO, negative trending margins is evidence that our business is changing. IMO, we're watching an evolution (mostly created by Dale Pollak) where multi-roof dealerships find more profits from operations (i.e. volume) than hand to hand combat from opportunistic commissioned sales reps. This evolution reminds me of the death of the family farm. The small farmer can't compete with the mega farmer, so the small farmer sells to the mega farmer (think Warren Buffet funding Asbury). These new mega dealerships will be 100% focused on getting rid of any position that can't delivering a positive and predictable shopper/owner experience.
Net result: Shopper wins.
The tide is slowly shifting... there's a new day coming for us all.
Crediting (or blaming) Dale Pollak for this is probably incorrect. Dale came up with a great strategy for dealing with the effects of the Internet but he didn't he create it.
For that we should look to Al Gore...
Al Gore didn't create the internet, he just helped capitalize on it with legislation and non-technical direction.
I do agree though that much of this is tied back to the effects of the internet and the information age.
- Apr 7, 2009
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Did I blame John Deere for killing small farms? Hell no
Dale created a tool and a new business model to follow. Did Velocity kill small stores? Hell no. In fact, I can think of several small stores he saved when their leaders went all in. What I am saying is that Velocity looks to operations to create profits AND this operations based model is exactly where our market is going (this is not good news for old lot sharks).
Did I blame John Deere for killing small farms? Hell no
What I am saying is that Velocity looks to operations to create profits AND this operations based model is exactly where our market is going (this is not good news for old lot sharks).
I agree with Joe. Dale absolutely changed the industry. He started this long before the internet ever came about. He started it in Chicago with his Program Cadillac models that he would load up on and under cut all of the other dealers with.
To me, this is truly the death of the salesman.
- Apr 7, 2009
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This week, Tesla upgraded all it’s cars to self-driving over wi-fi for free.
#ThinkAboutHowThatHappened
#ThinkAboutHowThatHappened