McLaren receives £300m.......

[Lee Jones Jnr]

A couple of people have said that McLarens are overpriced from new.
Other than over supply, what is giving that impression when they are regularly cited as best performance in class etc?

[Ferruccio]

Lee Jones Jnr said:

A couple of people have said that McLarens are overpriced from new.
Other than over supply, what is giving that impression when they are regularly cited as best performance in class etc?

Economists will tell you that price is a function of supply and demand.
You can’t take supply out of the equation.

If they made less, presumably their business plan wouldn’t have worked.
Koenigsegg have obviously tried it though, and look at the price of their cars.

[garystoybox]

Lee Jones Jnr said:

A couple of people have said that McLarens are overpriced from new.
Other than over supply, what is giving that impression when they are regularly cited as best performance in class etc?

You can’t say forget about supply side, because that’s basic economics. The fact they can’t sell them at full price because they are at a premium to their contemporaries and too many being made (only so many 2 seat mid engined supercar buyers) tells you everything you need to know. Ferrari may make twice as many cars, but they offer multiple car types I.e. they make less 2 seat mid engine cars than Mclaren and they’ve been building the brand for 70 years. Mclaren are now no different to M BMW‘s... everybody ignores the list price of every new model because they know within months of launch there’ll be 20% off deals. The die is cast I’m afraid.

[650spider]

garystoybox said:

You can’t say forget about supply side, because that’s basic economics. The fact they can’t sell them at full price because they are at a premium to their contemporaries and too many being made (only so many 2 seat mid engined supercar buyers) tells you everything you need to know. Ferrari may make twice as many cars, but they offer multiple car types I.e. they make less 2 seat mid engine cars than Mclaren and they’ve been building the brand for 70 years. Mclaren are now no different to M BMW‘s... everybody ignores the list price of every new model because they know within months of launch there’ll be 20% off deals. The die is cast I’m afraid.

The die may be cast, buy it can change.

Wren kitchens up until 18mths ago would haggle, discount and beat any price from any competitor +5%.

They had a large market share but hit or miss quality, however, lots of unhappy clients as they always felt someone got a better deal due to perhaps better negotiation abilities.

Then the billionaire owner changed the policy.

Now, best price is the price you get; no discount, no price match; just the best price they can supply it for; if your not happy go elsewhere.

Since then, happier clients, more kitchens out of the door, better quality and more profit.

Its not tricky to change a companies mantra; McLaren are in the best position to change now as they shall have to restructure and tighten their belts to survive.

[garystoybox]

It might be easy to change a firms mantra but not so easy to convince a consumer., or get them to buy into it. If McLaren state they were stopping all discounts tomorrow nobody would believe it and certainly sales would dry up to virtually nil. It’ll be interesting to see what happens with Aston who appear to be also changing their mantra in line with the model you suggest.

[anonymous-user]

One would think that after several years of sales, McLaren and their Dealerships will now have sufficient sales data to understand the real-world actual selling price.

One of the main criticisms with the perception of high depreciation, is that it is based on MSRP, not the actual selling price. IMO, set a new pricing structure based on the historical data of an average of the actual selling price on a take it or leave it, no haggle basis. Only as the brand matures and gets some road car heritage under its belt, will it be in a position to command that extra ‘luxury brand / household name’ premium its contemporaries are able to charge for. I liken it to Grand Seiko versus Rolex. GS in every way performs better than Rolex, but doesn’t have the luxury brand identity to charge the extra premium, yet.

I think McLaren needs to reset their pricing structure if they want to compete with VAG and Ferrari, or close down making the Sports and Super Series, concentrating on low volume Ultimate Series.

[650spider]

garystoybox said:

It might be easy to change a firms mantra but not so easy to convince a consumer., or get them to buy into it. If McLaren state they were stopping all discounts tomorrow nobody would believe it and certainly sales would dry up to virtually nil. It’ll be interesting to see what happens with Aston who appear to be also changing their mantra in line with the model you suggest.

I have mentioned it somewhere before...the invoice price of my 650sider to the original purchaser was £282k. There is no way that car should of been that price, just like now, with for instance, a Pista.

With easier access to funding, the manufacturers could rip it and put these kind of prices on the windscreen, and chance their mit.

McLaren hit a bumpy patch, had to then heavily discount and never looked back.

I would think most manufacturers shall be struggling to sell cars over £200k for the long term.

With 5 series coming to the end of their production span, and with production seriously cut back on 720s, maybe values shall steady a bit due to lack of supply.

That, and a new pricing direction on future models would all help the McLaren cause.

[IMI A]

MAC 720S said:

One would think that after several years of sales, McLaren and their Dealerships will now have sufficient sales data to understand the real-world actual selling price.

One of the main criticisms with the perception of high depreciation, is that it is based on MSRP, not the actual selling price. IMO, set a new pricing structure based on the historical data of an average of the actual selling price on a take it or leave it, no haggle basis. Only as the brand matures and gets some road car heritage under its belt, will it be in a position to command that extra ‘luxury brand / household name’ premium its contemporaries are able to charge for. I liken it to Grand Seiko versus Rolex. GS in every way performs better than Rolex, but doesn’t have the luxury brand identity to charge the extra premium, yet.

I think McLaren needs to reset their pricing structure if they want to compete with VAG and Ferrari, or close down making the Sports and Super Series, concentrating on low volume Ultimate Series.

Thats not a great analogy as the Mcl is very desirable the GS is not. If the people in charge could ensure making the Mcl like the GS game over for Porsche. Seriously game over on the current super car stakes. I've been with Mcls on track. They're untouchably fast but more fragile than Porsche.

[RSbandit]

The list price on any of these cars whether its McLaren, Aston , Ferrari etc are pretty nuts if you ask me and if it weren't for easy accessibility to finance I doubt list prices would really be so high, in alot of cases you only get the bigger discounts if you take the finance or am I mistaken? I can see the logic in the PCP deals on the 600LT as it takes the issue of trying to sell the car after 2/3yrs out of it...what was the best deal out there on one of those?

[ralphrj]

MAC 720S said:

I think McLaren needs to reset their pricing structure if they want to compete with VAG and Ferrari, or close down making the Sports and Super Series, concentrating on low volume Ultimate Series.

Unfortunately, I don't think that stopping Sports and Super Series production is possible due to the scale of investment in the Automotive factory. It is a big fixed overhead plus there is considerable investment in R&D for those models.

I do agree that the Ultimate Series cars have been much more successful. P1, Senna and Speedtail all sold out, the latter 2 before they were officially announced so probably without too much by way of discounts. In hindsight, I think that McLaren would have been better to start by building those kind of cars inside the existing MTC facility (as they did with the SLR) before expanding later.

[Lee Jones Jnr]

garystoybox said:

You can’t say forget about supply side, because that’s basic economics. The fact they can’t sell them at full price because they are at a premium to their contemporaries and too many being made (only so many 2 seat mid engined supercar buyers) tells you everything you need to know. Ferrari may make twice as many cars, but they offer multiple car types I.e. they make less 2 seat mid engine cars than Mclaren and they’ve been building the brand for 70 years. Mclaren are now no different to M BMW‘s... everybody ignores the list price of every new model because they know within months of launch there’ll be 20% off deals. The die is cast I’m afraid.

Not really understanding what I said or answering what I asked.

[Juno]

650spider said:

garystoybox said:

You can’t say forget about supply side, because that’s basic economics. The fact they can’t sell them at full price because they are at a premium to their contemporaries and too many being made (only so many 2 seat mid engined supercar buyers) tells you everything you need to know. Ferrari may make twice as many cars, but they offer multiple car types I.e. they make less 2 seat mid engine cars than Mclaren and they’ve been building the brand for 70 years. Mclaren are now no different to M BMW‘s... everybody ignores the list price of every new model because they know within months of launch there’ll be 20% off deals. The die is cast I’m afraid.

The die may be cast, buy it can change.

Wren kitchens up until 18mths ago would haggle, discount and beat any price from any competitor +5%.

They had a large market share but hit or miss quality, however, lots of unhappy clients as they always felt someone got a better deal due to perhaps better negotiation abilities.

Then the billionaire owner changed the policy.

Now, best price is the price you get; no discount, no price match; just the best price they can supply it for; if your not happy go elsewhere.

Since then, happier clients, more kitchens out of the door, better quality and more profit.

Its not tricky to change a companies mantra; McLaren are in the best position to change now as they shall have to restructure and tighten their belts to survive.

So to follow your theory its a simple case of pricing the 720s fully specked at say 165-170k no discount and the 600LT's at 135-140k no discount and the jobs done

[Cheib]

They would be much better doing that in the long term...it doesn’t matter whether you are selling bog rolls or supercars once you discount a product the buying public then view that price as the actual retail price and it’s very difficult to sell your product at RRP again. Obviously with the amount of pricing information on forums and social media offering one customer a “special deal” can become known by a lot of other people pretty quickly.

[garystoybox]

Lee Jones Jnr said:

Not really understanding what I said or answering what I asked.

Nope, I’ve reread your point and I’ve definitely and clearly answered your question with reason and using my opinion. If your looking for a different response you need to rephrase or ask a different question.

[Gullwings]

Cheib said:

They would be much better doing that in the long term...it doesn’t matter whether you are selling bog rolls or supercars once you discount a product the buying public then view that price as the actual retail price and it’s very difficult to sell your product at RRP again. Obviously with the amount of pricing information on forums and social media offering one customer a “special deal” can become known by a lot of other people pretty quickly.

Myprotein are a cracking example of this, or DFS

[Cheib]

Gullwings said:

Cheib said:

They would be much better doing that in the long term...it doesn’t matter whether you are selling bog rolls or supercars once you discount a product the buying public then view that price as the actual retail price and it’s very difficult to sell your product at RRP again. Obviously with the amount of pricing information on forums and social media offering one customer a “special deal” can become known by a lot of other people pretty quickly.

Myprotein are a cracking example of this, or DFS

It sounds daft but the reason you go into a store like Boots and see 3 for 2 deals or a BOGOF is that it doesn’t destroy the perceived pricing of the product. Clearly a BOGOF is a 50% discount but people don;t register it in the same way. (Obv it also keep the average spend up which is another major strategy for retailers)

[Lee Jones Jnr]

garystoybox said:

Lee Jones Jnr said:

Not really understanding what I said or answering what I asked.

Nope, I’ve reread your point and I’ve definitely and clearly answered your question with reason and using my opinion. If your looking for a different response you need to rephrase or ask a different question.

Nah.

[LooneyTunes]

TB993tt said:

ralphrj said:

the cars aren't good enough to persuade people to buy them for the price being asked. Supply exceeds demand which leads to 2 things - discounting and early replacement of the model. What you think is the cause of the problem is actually just a symptom of another problem - that the product just isn't good enough.

Think you'll find most pundits think the cars are "good enough", it's simple enough, over supply, there just aren't enough people who can play at these price levels so depreciation kicks in getting prices down to levels where there are plenty of punters.

It’s sadly not just over supply. The buying/dealer experience needs work too. If they revamp this then I’ll take another look, but poor sales experience leads to low confidence of a good ownership experience, irrespective of vehicle price. Dealer network not big enough to adopt the “try a different one” approach.

[Desert Dragon]

Juno said:

650spider said:

garystoybox said:

You can’t say forget about supply side, because that’s basic economics. The fact they can’t sell them at full price because they are at a premium to their contemporaries and too many being made (only so many 2 seat mid engined supercar buyers) tells you everything you need to know. Ferrari may make twice as many cars, but they offer multiple car types I.e. they make less 2 seat mid engine cars than Mclaren and they’ve been building the brand for 70 years. Mclaren are now no different to M BMW‘s... everybody ignores the list price of every new model because they know within months of launch there’ll be 20% off deals. The die is cast I’m afraid.

The die may be cast, buy it can change.

Wren kitchens up until 18mths ago would haggle, discount and beat any price from any competitor +5%.

They had a large market share but hit or miss quality, however, lots of unhappy clients as they always felt someone got a better deal due to perhaps better negotiation abilities.

Then the billionaire owner changed the policy.

Now, best price is the price you get; no discount, no price match; just the best price they can supply it for; if your not happy go elsewhere.

Since then, happier clients, more kitchens out of the door, better quality and more profit.

Its not tricky to change a companies mantra; McLaren are in the best position to change now as they shall have to restructure and tighten their belts to survive.

So to follow your theory its a simple case of pricing the 720s fully specked at say 165-170k no discount and the 600LT's at 135-140k no discount and the jobs done

Too late but if they'd stuck to MRSP and built the car well in the first place the pricing didn't put me off at £300k for a personalised 720s. Can anyone hand on heart say how many unsold unregistered 720s coupes exist today as this may have an influence on future values? I hear they stopped making them ages ago and 765LT due next.

[Desert Dragon]

LooneyTunes said:

TB993tt said:

ralphrj said:

the cars aren't good enough to persuade people to buy them for the price being asked. Supply exceeds demand which leads to 2 things - discounting and early replacement of the model. What you think is the cause of the problem is actually just a symptom of another problem - that the product just isn't good enough.

Think you'll find most pundits think the cars are "good enough", it's simple enough, over supply, there just aren't enough people who can play at these price levels so depreciation kicks in getting prices down to levels where there are plenty of punters.

It’s sadly not just over supply. The buying/dealer experience needs work too. If they revamp this then I’ll take another look, but poor sales experience leads to low confidence of a good ownership experience, irrespective of vehicle price. Dealer network not big enough to adopt the “try a different one” approach.

they need to buy back all their distribution network and control this part of their model religiously - it cost money to do this way but whats the point of having company values and strong brand that non of your franchise dealers support on a consistent basis. some good some bad not good enough at £300k sale level. No way.