STONE_COLD
14/07/2005, 07h45
Désolé pour l'anglais, ce programme éliminte la négociation des prix. Ils disent que c'est pas une bonne chose pour les concessionnaires, la marge de profit étant réduite. Donc c'est vrai ce que disais IanD et Novaly.
DETROIT -- Aside from blowing out a breathtaking number of cars and trucks, the GM Employee Discount for Everyone program has become an impromptu -- and successful -- experiment with no-haggle pricing.
By offering vehicles at 3 to 5 percent below dealer invoice, General Motors has imposed a ceiling on the transaction price. That's a good definition of no-haggle selling. As the ads explain, the price that GM employees pay is the price the public pays.
According to GM's internal research, the elimination of price negotiations is a big reason the public likes the program.
"When we put it together, we thought the main draw would be the employee discount," says Mark LaNeve GM North America's sales and marketing chief. "But … a contributing factor is the simplicity of the one-price aspect."
Does GM's promotion portend a permanent shift to no-haggle pricing? LaNeve says that won't happen.
"We are definitely trying to push MSRPs lower and closer to transaction price," LaNeve says, "but we are not evaluating any kind of program that would encourage one-price selling. This is not a precursor to any broad move in this area."
Smaller margins
Although the employee discount boosted GM sales in June by a stunning 46.9 percent, dealers are ambivalent. Dealers are selling more vehicles, but the promotion sliced profit margins on most models.
Under the program, GM pays dealers 5 percent of a vehicle's sticker price. That includes GM's traditional 3 percent holdback. By contrast, dealers previously were allowed a discount of 8 to 11 percent of a vehicle's sticker, including the holdback allowance. Then they negotiated with the customer to hold onto as much of that spread as possible.
So who wins, and who loses? For modestly priced models with hefty incentives, GM's program guarantees dealers a decent profit.
But for pricier vehicles such as the Cadillac SRX, dealer gross profits drop. One Florida dealer says his gross is $2,124 on a Cadillac SRX, down from an average of $3,078.
And a Hummer dealer in California says his gross profits have declined $1,500 per vehicle. "We are turning metal, but not making a lot of profit," says the Hummer dealer, who asked not to be identified.
Dealers sacrifice?
Chris Ceraso, an analyst with Credit Suisse First Boston in New York, says GM dealers are bearing a substantial share of the cost of the promotion.
Dealers sacrificed "thousands of dollars of potential profit margin to make the program compelling to consumers while keeping the cost to GM at a reasonable level," Ceraso says.
That might explain why the program added only modestly to GM's incentive costs in June. According to Edmunds.com, Edmunds says GM discounts averaged $3,865 per vehicle in June, up only $136 from May.
Dealers say they can live with smaller grosses for a while longer but don't want it to become a regular practice. To compensate, many dealers are emphasizing profitable sidelines such as finance and insurance, and service and parts.
But some dealers can't make the numbers work. Ken Stanford, vice president and general manager of JN Automotive Group in Honolulu, the largest GM dealer in Hawaii, says his dealership opted out of the program.
When Stanford analyzed the discount, he estimated his dealership revenue would drop $500,000 in June. He won't participate this month, either.
"I can't afford to. I would go broke," says Stanford, who typically sells 107 Chevrolets a month but sold only 70 in June. "There is no margin for us. I couldn't sell enough cars to make up the difference in gross profit."
Although GM says the program is voluntary, Stanford says the automaker repeatedly tried to persuade him to change his mind. "But the last time I checked, I come to work to make a profit," he says.
One Chevrolet dealer in Georgia sold 66 new vehicles in June -- 30 more than usual -- but made $600 to $800 less per vehicle under the employee plan. "I made no more selling 66 more cars than I did selling the usual 36 in May," said the dealer, who asked not to be identified.
Guaranteed money
LaNeve says that those objections are overstated and that dealer profit margins will be consistent with historic averages.
"We wouldn't run a program that we thought would seriously hurt dealer profitability," he says. "When this program is over, dealer profitability will be extremely high, if for nothing else than volume."
Indeed, some dealers welcome the program. Lynn Thompson, a GM dealer in Springfield, Mo., says the 5 percent margin on employee discounts guarantees he will make money. In his area, dealers routinely cut margins even on the employee price.
"It's horrendous in my market," says Thompson. "They take $500 to $1,500 off the employee price. It's not good business. You've got to take care of profits so you can take care of customers down the road."
Chevrolet dealer Tommy Brasher, owner of Brasher Motor Co. in Weimar, Texas, nearly tripled his sales in June, but he admits there is a trade-off.
"Margins are down a little bit, there's no doubt," says Brasher, who sold 56 new vehicles in June -- Brasher's best month in five years. "But I was able to clean up a lot of inventory that looked like it was going to sit around forever."
Brasher believes GM's employee discount plan is a "move to more transaction-based pricing, which equates to one-price selling."
GM has said 2006-model sticker prices will be substantially lower, moving them closer to transaction levels. But some dealers fear they will have less freedom to negotiate prices in the showroom.
The real rub, says the Cadillac dealer in Florida: "Dealers are very unhappy when they are told what the profit will be."
DETROIT -- Aside from blowing out a breathtaking number of cars and trucks, the GM Employee Discount for Everyone program has become an impromptu -- and successful -- experiment with no-haggle pricing.
By offering vehicles at 3 to 5 percent below dealer invoice, General Motors has imposed a ceiling on the transaction price. That's a good definition of no-haggle selling. As the ads explain, the price that GM employees pay is the price the public pays.
According to GM's internal research, the elimination of price negotiations is a big reason the public likes the program.
"When we put it together, we thought the main draw would be the employee discount," says Mark LaNeve GM North America's sales and marketing chief. "But … a contributing factor is the simplicity of the one-price aspect."
Does GM's promotion portend a permanent shift to no-haggle pricing? LaNeve says that won't happen.
"We are definitely trying to push MSRPs lower and closer to transaction price," LaNeve says, "but we are not evaluating any kind of program that would encourage one-price selling. This is not a precursor to any broad move in this area."
Smaller margins
Although the employee discount boosted GM sales in June by a stunning 46.9 percent, dealers are ambivalent. Dealers are selling more vehicles, but the promotion sliced profit margins on most models.
Under the program, GM pays dealers 5 percent of a vehicle's sticker price. That includes GM's traditional 3 percent holdback. By contrast, dealers previously were allowed a discount of 8 to 11 percent of a vehicle's sticker, including the holdback allowance. Then they negotiated with the customer to hold onto as much of that spread as possible.
So who wins, and who loses? For modestly priced models with hefty incentives, GM's program guarantees dealers a decent profit.
But for pricier vehicles such as the Cadillac SRX, dealer gross profits drop. One Florida dealer says his gross is $2,124 on a Cadillac SRX, down from an average of $3,078.
And a Hummer dealer in California says his gross profits have declined $1,500 per vehicle. "We are turning metal, but not making a lot of profit," says the Hummer dealer, who asked not to be identified.
Dealers sacrifice?
Chris Ceraso, an analyst with Credit Suisse First Boston in New York, says GM dealers are bearing a substantial share of the cost of the promotion.
Dealers sacrificed "thousands of dollars of potential profit margin to make the program compelling to consumers while keeping the cost to GM at a reasonable level," Ceraso says.
That might explain why the program added only modestly to GM's incentive costs in June. According to Edmunds.com, Edmunds says GM discounts averaged $3,865 per vehicle in June, up only $136 from May.
Dealers say they can live with smaller grosses for a while longer but don't want it to become a regular practice. To compensate, many dealers are emphasizing profitable sidelines such as finance and insurance, and service and parts.
But some dealers can't make the numbers work. Ken Stanford, vice president and general manager of JN Automotive Group in Honolulu, the largest GM dealer in Hawaii, says his dealership opted out of the program.
When Stanford analyzed the discount, he estimated his dealership revenue would drop $500,000 in June. He won't participate this month, either.
"I can't afford to. I would go broke," says Stanford, who typically sells 107 Chevrolets a month but sold only 70 in June. "There is no margin for us. I couldn't sell enough cars to make up the difference in gross profit."
Although GM says the program is voluntary, Stanford says the automaker repeatedly tried to persuade him to change his mind. "But the last time I checked, I come to work to make a profit," he says.
One Chevrolet dealer in Georgia sold 66 new vehicles in June -- 30 more than usual -- but made $600 to $800 less per vehicle under the employee plan. "I made no more selling 66 more cars than I did selling the usual 36 in May," said the dealer, who asked not to be identified.
Guaranteed money
LaNeve says that those objections are overstated and that dealer profit margins will be consistent with historic averages.
"We wouldn't run a program that we thought would seriously hurt dealer profitability," he says. "When this program is over, dealer profitability will be extremely high, if for nothing else than volume."
Indeed, some dealers welcome the program. Lynn Thompson, a GM dealer in Springfield, Mo., says the 5 percent margin on employee discounts guarantees he will make money. In his area, dealers routinely cut margins even on the employee price.
"It's horrendous in my market," says Thompson. "They take $500 to $1,500 off the employee price. It's not good business. You've got to take care of profits so you can take care of customers down the road."
Chevrolet dealer Tommy Brasher, owner of Brasher Motor Co. in Weimar, Texas, nearly tripled his sales in June, but he admits there is a trade-off.
"Margins are down a little bit, there's no doubt," says Brasher, who sold 56 new vehicles in June -- Brasher's best month in five years. "But I was able to clean up a lot of inventory that looked like it was going to sit around forever."
Brasher believes GM's employee discount plan is a "move to more transaction-based pricing, which equates to one-price selling."
GM has said 2006-model sticker prices will be substantially lower, moving them closer to transaction levels. But some dealers fear they will have less freedom to negotiate prices in the showroom.
The real rub, says the Cadillac dealer in Florida: "Dealers are very unhappy when they are told what the profit will be."