Dealers are the a$$holes for "markups" but what about the OEM??

[DrewAment]

The XL's 100A package is gone, with the 101A equipment package now serving as the base for this lowest trim level, commanding a $1815 premium. Admittedly, the standard 100A package was remarkably stripped-out, as 101A includes basic features such as power windows, power door locks, keyless entry, cruise control, and a reverse sensing system.

Ummmm ... they did it for the price increase, understand, to look like they are giving more. However, don't all those additional 101A "included" now options require CHIPS?

Are they keeping the supply chain thin, or does Ford now think the chip shortage is over?

 

[Alex Snyder]

Are they keeping the supply chain thin, or does Ford now think the chip shortage is over?

The only industry still talking about chip supply issues is ours. PS5s, phones, TVs, Xboxs, and video cards are falling out of the sky now.

 

[DrewAment]

The only industry still talking about chip supply issues is ours. PS5s, phones, TVs, Xboxs, and video cards are falling out of the sky now.

Something to do with OEMs being stuck in the stone age. I remembered and found this article.

Chip makers to carmakers: time to get out of the semiconductor Stone Age

Intel, Qualcomm try to wean auto companies from dependence on obsolete technology

fortune.com

 

[ChrisR]

The only industry still talking about chip supply issues is ours. PS5s, phones, TVs, Xboxs, and video cards are falling out of the sky now.

Where are you finding this glut of PS5s? I've been seeing Xbox's around, and video card scalpers trying to return after they can't gouge.

Aren't the chips used by auto an older gen than those being used by modern electronics, which does have a little influence on the availability, I would think.

 

[Alex Snyder]

Where are you finding this glut of PS5s?

Search for one on Amazon and get on the waitlist. My brother, wife, and I did it to all receive the buy invite within a week. My brother got 2 at 2 different GameStops the same day. This was all in the same week.

We were just trying to get 1 for my oldest boy’s birthday and could have gotten 5.

I think the words for a while are “artificially low supply.” Manufacturers have realized they can pull the wool over peoples’ eyes for a bit. Snag a premium while they can.

 

[ChrisR]

Search for one on Amazon and get on the waitlist. My brother, wife, and I did it to all receive the buy invite within a week. My brother got 2 at 2 different GameStops the same day. This was all in the same week.

We were just trying to get 1 for my oldest boy’s birthday and could have gotten 5.

I think the words for a while are “artificially low supply.” Manufacturers have realized they can pull the wool over peoples’ eyes for a bit. Snag a premium while they can.

Didn't try Amazon, am on multiple waitlists, haven't received one, and it has been months.

 

[ryan.leslie]

(I'm going to say some things that I may not actually think just to see where the discussion goes. My kids LOVE it when I do this. )

How is a dealer markup any different than an opportunistic private party that bought graphic cards to resell for a profit? For many, knowing that the seller bought something from a retailer just to resell it for insane profit is a nonstarter. It takes them out of market until they find it from a retailer. It makes a need a want. People know that dealers buy cars to sell them, but the idea of an ADM is different than a manufacturer cost increase.

@ChrisR, you used the word "gouge" to describe the profiteering by individuals. Consumers are seeing ADM's that they've never seen on "regular cars" and I think they feel gouged too. If Sony raises the price of PS5's consumers may not like it, but they will understand it. The cost of goods increase over time. As the manufacturer, they raise the price until the price eclipses the demand. People are used to that, but that is very different in their minds then purchasing from a reseller that they perceive to be gouging.

Imagine walking the grocery aisle and seeing the equivalent to ADM on a package of bacon. If there is limited supply, the grocer won't discount or offer a coupon and the consumer "pays full price." How would you feel seeing an addendum sticker with a line item for "Additional Piggly Wiggly Markup?" Would you drive a few minutes to Kroger?

Just two years ago the industry had trained consumers to "ask for the invoice." Many of our trainers drummed "Full price (MSRP) is a FAIR price" ad nauseum to protect profits. If MSRP is "full price," anything over MSRP is overpaying. Nobody wants to overpay, and nobody likes being overcharged.

Current markups will create lasting animosity, and we are throwing away the line "I don't want to sell you ONE car, I want to sell you your next car, and your next car, and your next car." Better hope you made all of that sweet, sweet, lifetime customer value on your markup, because they probably aren't coming back and may not be able to buy even if they do.

Last thought, gas stations run the risk of fines for "price gouging" during high demand caused by extenuating circumstances. Is this different? Does ADM open us up to Federal pricing oversight?

 

[ryan.leslie]

 

[Jeff Kershner]

Yet consumers are willing to pay the price.