I want to hold gross, BUT let's GUT the Pricing?

[derrickwoolfson]

I understand each month's objectives change. But what I do not understand is the complaining of not holding gross when all of the units are gutted? Where they think "not everyone shops online price?" (scratches head) - despite their having inquired online...

Do you gut all the pricing? I offered that we should have a price leader. Oldest aged new unit per core vehicle. And that having a gutted price leader would build traffic. Allowing us to upsell. As it is much easier to upgrade than downgrade!

How do you handle pricing?

 

[Rob]

I understand each month's objectives change. But what I do not understand is the complaining of not holding gross when all of the units are gutted? Where they think "not everyone shops online price?" (scratches head) - despite their having inquired online...

Do you gut all the pricing? I offered that we should have a price leader. Oldest aged new unit per core vehicle. And that having a gutted price leader would build traffic. Allowing us to upsell. As it is much easier to upgrade than downgrade!

How do you handle pricing?

I assume you're talking new car pricing only here. At one of our domestic stores, we price by model (X below invoice across the board), no price leaders. It's simple and it seems to work well.

At one of our import stores, the competition is wild. We are well below invoice on every new car, and borderline insane on a few price leaders per model. Gross is elusive. We wouldn't price so aggressively if not for the extreme competition. We've tried pulling back, and traffic of every type just dies.

 

[Alex Snyder]

Buy your cars cheaper

 

[derrickwoolfson]

I assume you're talking new car pricing only here. At one of our domestic stores, we price by model (X below invoice across the board), no price leaders. It's simple and it seems to work well.

At one of our import stores, the competition is wild. We are well below invoice on every new car, and borderline insane on a few price leaders per model. Gross is elusive. We wouldn't price so aggressively if not for the extreme competition. We've tried pulling back, and traffic of every type just dies.

Correct, this is new only. And yes, Nissan is really having a tough time right now! Pricing rebates less invoice is not doing much. And it does not make sense, either, to price them at a $3k loss when you're only getting up to $600 back for hitting the OEM objective.

 

[Rob]

Correct, this is new only. And yes, Nissan is really having a tough time right now! Pricing rebates less invoice is not doing much. And it does not make sense, either, to price them at a $3k loss when you're only getting up to $600 back for hitting the OEM objective.

But you're in the fun situation where if you *don't* do multiple thousand below invoice, lead / calls / walk-ins stop. This is a strange, strange business.

 

[joe.pistell]

But you're in the fun situation where if you *don't* do multiple thousand below invoice, lead / calls / walk-ins stop. This is a strange, strange business.

"Oh those evil car dealers!"

BIG ASS ENTERPRIZE SAAS VENDORS TAKE NOTE! Get out of your comfort spot and spend some quality time inside stores. It's a war out there and Dealers bleed a lot.

p.s. SAAR has just begun to begin its downward cycle. Plus, have you seen used car prices in a free fall? The Dealer bleeding will grow into a river of blood and Dealers will make cuts (many of them will be irrational), taking many weaker vendors with them.

 

[mikesayre]

SAAR has just begun to begin its downward cycle. Plus, have you seen used car prices in a free fall? The Dealer bleeding will grow into a river of blood and Dealers will make cuts (many of them will be irrational), taking many weaker vendors with them.

The continued insanity with new inventory pricing is more of an OEM problem I think, it's an all out brand war. Some OEM's have too many dealers, an inferior product that can't compete (sedans vs. SUVs), and/or an overly aggressive vehicle production schedule. They aren't adjusting strategies, aren't concerned that the majority of their dealers aren't profitable, but are hoping something changes against the laws of reality. That's bad business, and eventually this whole problem will be corrected by Mother capitalism unless some OEM's change their strategies, take charge of their pricing standards, and start caring about their dealer network.

 

[Alex Snyder]

p.s. SAAR has just begun to begin its downward cycle. Plus, have you seen used car prices in a free fall? The Dealer bleeding will grow into a river of blood and Dealers will make cuts (many of them will be irrational), taking many weaker vendors with them.

Predicting the next recession?