Couple of things to take into account here: manufacturer markup and dealer ownership. Some manufacturers mark there vehicles up considerably more than others. Probably why Ford could advertise $10,000 off and Toyota didn't just a couple of years ago. In regards to dealer ownership, dealerships are often (always?) owned by individuals and not by the actual manufacturer... so where one VW dealership may not give you a deal, the one down the road might. But yeah... for the most part I agree with where you're coming from.

Just saw a report on Yahoo news of a $2,500 car the Japanese are producing... but it doesn't meet the safety standards of the USA so we'll never see it here. I understand the gov't intent by requiring safety standards, but by doing so they're telling people that they have to meet a certain quality of car, or meet a certain quality of house... or you can't have either one.

 

Problem is that bringing supply down to demand will cost tons of jobs and since the auto industry employs so many people governments would rather subsidize the industry by stealing your taxpayer dollars than allowing it to shrink like they should. They just don't understand that trying to play god with the economy will just contiune to make each crisis (aka recession) worse than the previous one. Letting the entire world economy cleanse itself of all the excess crap is what should be done. Might be very painful short term, but it will lead to a healthy recovery down the road. Now they are just prolonging the inevitable by trying to "buy" an immediate recovery.

 

I can think of various reasons for scrapping rather than slashing but they're specuation in my head.
Re-sale value, depreciation, Market value are some that i can think of.

Care to elaborate on why?

Very curious

 

Your making assumptions. Look at the monthly sales volumes of those models.

Those entire "unsold" lots will become "sold" in a matter of days.

Every day, entire lots of those vehicles are hitting the streets.

Every night, rx8 vigilantes gotta deal with them and clean up their act.

 

I can see what you are saying too and actually one thing I did notice was that in researching VW vehicles...I noticed in the vehicles I looked at that the difference between MSRP and invoice is relatively small compared to most every other brand of vehicle I have ever checked into. But still, you would think that the dealer might be willing to take a little less profit considering the state of things now. And even many people that do have money and a job are now just holding out and always looking for a better deal knowing that the buyer is pretty much in control right now. IMO there is no reason to be paying anywhere near sticker on any car ritght now....Not even '09s...new models...stuff like the 370z, etc.

 

They've all been painted ugly colors.

 

the difference between MSRP and invoice is relatively small compared to most every other brand of vehicle

Don't buy the invoice figure as genuine - it has absolutely nothing to do with the amount that the dealer eventually 'pays' VW for that car........it's job is to convince YOU that the poor salesman has only $300 haggle room - it's just bogus.

For the most part, the dealer just gets billed some interest on the wholesale value of his stock, he doesn't 'buy' each car that you see on his lot. Indeed, if he hits his negotiated targets, he can get a swack'o'cash back, reducing his 'cost' on each car, up to a year after it's sold. How can a dealer ever sell for "Less Than Invoice, Come On Down!!!" otherwise?

Fictional stickers are the oldest bait in the car game.....

S

 

I don't know the US Invoice system that well, but RX-8's for example are already $2500-$3000 cheaper (MSRP) than most of it's competition.

One would think a dealer would not have that much room to move in reducing Invoice Price unless incentives are offered by MNAO to shift old MY stocks.

There is a possibility that there may not be a 2010 MY RX-8?, from what I have heard it is not the first time a manufacturer has done this.

Yes, one would think Car Makers have a real problem in shifting ALL this inventory without making substantial losses which only adds to their financial woes.

While we may think it is good for the consumer (Buyer) it is not going to help the industry.

Do we want a variety of cars/brands or a consolidation.

I think no one here wants Marques to disappear altogether.

Subsidizing Manufacturers with tax payer dollars is only putting off the inevitable.
It is a catch twenty two scenario.

 

well I could see some of the more exclusive car companies not wanting to bend too much on their car prices lest they lose the exclusivity that makes the brand desirable.... but for the "common" car companies eg Ford, Chrysler etc. there should be no real issues with big price drops.

 

Yes, and then there is the issue of RESALE Values...

I don't think I would like to buy a new 09 MY of any brand that is 35-40%+ more expensive than a 2010 MY that has been reduced to shift stock.

It's not like we are talking of say less than 300 units we would be talking thousands of a particular Brand/Model.

I would be Pissed!

 

I worked for a dealership as a saleman. This particular make puts approximately $2000 on the sticker more than what it cost to make. The dealer is responsible for this bottom line dollar to the manufacturer. If these prices are not met the dealership, owned by a private party, usually declares bankruptcy. The salesman make approximately 18-25% from the profit. The finance team, sales managers, general manager all get a cut. The only time you will see excessive cuts in the price is when the manufacturer offers rebates. The dealership then is not responsible for that part of the initial cost. Cars are selling. I was a new salesman and sold 15 cars in 30 working days. I didn't make alot of money because the dealership was selling the cars at or just above cost. The dealerships can work with you but can only go so low before they end up in the red. The manufactuter must offer the incentives.

 

Yep, my buddy is looking to buy a new Toyota Highlander Hybrid (cash money) for his wife and we spent the day today looking around online and went haggling to some local dealers and you would think with the market people would be willing to haggle but surprisingly the Highlander Hybrid is in high demand and most of the dealer inventory was limited. They wouldn't really knock the price down much. He found one out of state with on 3k miles and he is saving close to 10k on it.

 

The problem right now is that dealerships still expect to make the same dollar figure at the end of each day/week/month/quarter as always. Same profits. But they are selling less cars. So they think want to hold each sale as high as possible to try to reach their unattainable total profit figures.

I just bought a used xterra. the dealership was asking 8500 and acted like i was a ***** in church when i offered them $7500. The carfax reveled it had been on the market bouncing between dealerships through wholesalers for 10 months. That dealership probably paid ~$5k for that truck. When I pointed this out they sold it to me for my asking price, which I thought was fair both for me and the dealership.

 

Next month, I am sure I will see some sweet *** deal.

very temping.

 

thats crazy!

 

Also contributing is the hope that this situation is temporary and if they can only wait it out for another year, things will back to pre depression levels. Right now, that doesn't look to be reality.

 

mac11, Xterra = great truck.

www.xterraownersclub.com

 

I saw an interesting graph recently (can't find it again atm), but the point was that due to the credit crunch and everyone freaking out, that car sales had suddenly below historical levels for Q4 2008, even compared to other recessions.

It's not like people will stop needing cars anytime for the next few decades. Which means that there is a lot of pent-up demand at the moment. In about a year from now, when we get to the point where it is clear the economy is in recovery, it makes sense that there will be a massive increase in sales figures.