Ask a car salesman anything...anything at all (Vol. 2).
Discussion
In fairness I think jamoor has a point (maybe I am the only one)
Say a certain BMW in base spec costs 30k. Most people option it up to 40k. Customer goes to dealer, does a deal for the 40k version, dealership gets commission, customer gets a nice car, everybody happy.
Now in the new world, base spec costs 30k. Half the options need to be added at build time (e.g. nice wheels, nice paint) so cost at time of ordering is now 35k. For the rest of the options, BMW does a deal directly with the customer to turn on the features remotely on a subscription basis. Ergo the dealership is cut out of 5k worth of order.
I don't know whether it will work this way, but if so, it would be an interesting half-way house. It would be a slight shift of revenue stream from dealership to manufacturer.
Any BMW sales people that can comment? Are dealerships concerned about this sort of thing, or is it really not relevant to them?
Say a certain BMW in base spec costs 30k. Most people option it up to 40k. Customer goes to dealer, does a deal for the 40k version, dealership gets commission, customer gets a nice car, everybody happy.
Now in the new world, base spec costs 30k. Half the options need to be added at build time (e.g. nice wheels, nice paint) so cost at time of ordering is now 35k. For the rest of the options, BMW does a deal directly with the customer to turn on the features remotely on a subscription basis. Ergo the dealership is cut out of 5k worth of order.
I don't know whether it will work this way, but if so, it would be an interesting half-way house. It would be a slight shift of revenue stream from dealership to manufacturer.
Any BMW sales people that can comment? Are dealerships concerned about this sort of thing, or is it really not relevant to them?
I can see what you are getting at, but most of a dealers income from selling a new car will be from hitting quarterly sales bonuses from the manufacturer, so as long as that car goes towards that target, which it will, I see no negatives really.
The dealer will still make a small margin on the car sale, but that's true of a 8k new car or an 80k new car.
The dealer will still make a small margin on the car sale, but that's true of a 8k new car or an 80k new car.
AmitG said:
In fairness I think jamoor has a point (maybe I am the only one)
Say a certain BMW in base spec costs 30k. Most people option it up to 40k. Customer goes to dealer, does a deal for the 40k version, dealership gets commission, customer gets a nice car, everybody happy.
Now in the new world, base spec costs 30k. Half the options need to be added at build time (e.g. nice wheels, nice paint) so cost at time of ordering is now 35k. For the rest of the options, BMW does a deal directly with the customer to turn on the features remotely on a subscription basis. Ergo the dealership is cut out of 5k worth of order.
I don't know whether it will work this way, but if so, it would be an interesting half-way house. It would be a slight shift of revenue stream from dealership to manufacturer.
Any BMW sales people that can comment? Are dealerships concerned about this sort of thing, or is it really not relevant to them?
It’s the beginning of the encroachment onto dealers by manufacturers. VW took power away from from dealers, they are just paid a fixed price per sale. BMW taking the sales of potential extras away from dealers. This kind of stuff will continue to occur.Say a certain BMW in base spec costs 30k. Most people option it up to 40k. Customer goes to dealer, does a deal for the 40k version, dealership gets commission, customer gets a nice car, everybody happy.
Now in the new world, base spec costs 30k. Half the options need to be added at build time (e.g. nice wheels, nice paint) so cost at time of ordering is now 35k. For the rest of the options, BMW does a deal directly with the customer to turn on the features remotely on a subscription basis. Ergo the dealership is cut out of 5k worth of order.
I don't know whether it will work this way, but if so, it would be an interesting half-way house. It would be a slight shift of revenue stream from dealership to manufacturer.
Any BMW sales people that can comment? Are dealerships concerned about this sort of thing, or is it really not relevant to them?
It certainly will make searching for a used car alot easier in the future when all cars are fitted with the kit and you can just rent it monthly.
spreadsheet monkey said:
I think particularly with prestige brands, the rules on what they can sell as "Approved Used" are quite restrictive. It might be something like maximum 5 years old, 60k miles.
It's quite possible that you could find some good well cared for cars that just happen to be high mileage or whatever.
It depends on the car. If it was a low mileage 2 year old BMW or Merc, I'd probably question why it was being sold outside the main dealer network. But for older cars, I wouldn't worry about buying from a proper established independent dealer.
We sell a fair few cars under 3 years old, and unlike many dealers we can produce a new purchase order / invoice and guarantee no significant repairs. It's quite possible that you could find some good well cared for cars that just happen to be high mileage or whatever.
It depends on the car. If it was a low mileage 2 year old BMW or Merc, I'd probably question why it was being sold outside the main dealer network. But for older cars, I wouldn't worry about buying from a proper established independent dealer.
A couple of weeks ago we had a nice year old Audi, nervous private buyer enquires, we agree to an inspection at Audi so take the car there. In the time he was dithering about the purchase we traded it to the same Audi dealer who put it up for £1500 more than we were selling.
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
It must create a great saving on the the production lines as near on every cars manufactured the same.Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
Yes it's just the I.D and I'm sure the dealers will still be rewarded handsomely for dealing with any orders and tbh will like it this way as there will be no variations in pricing across dealers, no haggling, no bouncing prices around etc. The dealer will still deal with test drives, handovers, finance etc. Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I'm not really getting Jamoors excitement about this.
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I guess they may intend to make profit off the features further down the line so they may be cheaper? I've no idea.Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
The VW ID thing is very unusual. List the manufacturers that operate in this way, I can only think of Dacia, there is a long list of manufacturers selling in the traditional way.
CRA1G said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
It must create a great saving on the the production lines as near on every cars manufactured the same.jamoor said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I guess they may intend to make profit off the features further down the line so they may be cheaper? I've no idea.Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
The VW ID thing is very unusual. List the manufacturers that operate in this way, I can only think of Dacia, there is a long list of manufacturers selling in the traditional way.
HTP99 said:
jamoor said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I guess they may intend to make profit off the features further down the line so they may be cheaper? I've no idea.Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
The VW ID thing is very unusual. List the manufacturers that operate in this way, I can only think of Dacia, there is a long list of manufacturers selling in the traditional way.
The profit the dealer makes depends on their negotiating skills, in the Dacia/ID method they are told by Dacia/VW how much profit they will make on this car meaning the dealer has very little control over whats going on.
AmitG said:
In fairness I think jamoor has a point (maybe I am the only one)
Say a certain BMW in base spec costs 30k. Most people option it up to 40k.
I stopped reading after that. Your average Mr & Mrs Smith treating themselves to a new 3 series do not EVER add 10k of spec to a car. At those levels you're talking new LR products or higher end german stuff X5, Q7, S Class etc.. As someone who has sold new cars, the last thing you want in stock is a middle of the road 30-40k car loaded with expensive bits.Say a certain BMW in base spec costs 30k. Most people option it up to 40k.
jamoor said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I guess they may intend to make profit off the features further down the line so they may be cheaper? I've no idea.Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
The VW ID thing is very unusual. List the manufacturers that operate in this way, I can only think of Dacia, there is a long list of manufacturers selling in the traditional way.
CRA1G said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
It must create a great saving on the the production lines as near on every cars manufactured the same.Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
Fast Bug said:
jamoor said:
Fast Bug said:
But will base models be cheaper, or more expensive because they have to build it with the same equipment as a top of the range vehicle? If extra features are enabled remotely, the kit has to be there in the first place.
Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
I guess they may intend to make profit off the features further down the line so they may be cheaper? I've no idea.Also on the VW thing, isn't that only the I.D that's sold in that way? Other manufacturers have done similar with a handling fee built in rather than a margin, so its not unusual.
The VW ID thing is very unusual. List the manufacturers that operate in this way, I can only think of Dacia, there is a long list of manufacturers selling in the traditional way.
Even if you look at Volvo or even Porsche, how many of their cars are sold by which method? I'm surprised you're even trying to argue this point. There's very few cars that are sold on a fixed price basis and most go through the usual car broker/finance company deal/ car broker/negotiation system.
blank said:
Development cost savings will be significant too.
Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
This reminds me of a (possibly true) story about Ford Granadas back in the seventies or eighties. They all had the same wiring loom fitted regardless of trim level and one option was footwell lights that came on when the door was opened. This cost £x at the time of ordering and was supplied by the dealer. All he did was put a 5p bulb into the existing holder. Anyone know if this is true?Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
blank said:
Development cost savings will be significant too.
Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
I believe the LHD and RHD freelander 1 dashboards are identical Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
rovermorris999 said:
blank said:
Development cost savings will be significant too.
Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
This reminds me of a (possibly true) story about Ford Granadas back in the seventies or eighties. They all had the same wiring loom fitted regardless of trim level and one option was footwell lights that came on when the door was opened. This cost £x at the time of ordering and was supplied by the dealer. All he did was put a 5p bulb into the existing holder. Anyone know if this is true?Development/sign off costs for even an apparently simple part can be eye watering, so if you only develop one version of it instead of 2 or 3 there are massive savings to be had.
Something like headlights, switch everything to LED with the same hardware, then charge more for the fancy adaptive features.
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