Price Gouging

[Yukon21Denali]

I do not have a supplier code. What happened was...

Let me give you a friendly warning, your deal on the agreed pricing based on supplier code will falter unless you provide them a supplier code at the paperwork time. That's the rule, no gaming around it. Your sales person may have agreed to the supplier price, but he/she is assuming you 'qualify' for supplier price and will provide a code when time comes.

Check this portal for more details on supplier program, https://www.gmsupplierdiscount.com/

And one needs to submit a proof of supplier (not just an auth code), usually your paystub showing you're employed by a company who is a supplier in GM's book or your employer's badge with your picture and company logo etc. There is no bending of these rules for supplier, at least in my experience of having used it couple of times now.

https://www.gmsupplierdiscount.com/content/pdf/sup/GM-Rules-Supplier-Discount.pdf

 

[BourbonNcigars]

So how did we get here

People accepting things and buying anyway. Feeds the machine that works against the consumer.

 

[Gmo79]

Pretty sure the dealers are getting all the benefits here.

Except for the fact their inventories are low- so while they are making more per unit, they are selling less. Once the shortage is over, prices will come down.

 

[BourbonNcigars]

Except for the fact their inventories are low- so while they are making more per unit, they are selling less. Once the shortage is over, prices will come down.

Deflation is certainly a possibility, but the world is also changed now. I think the best way to look at things these days is that there's a new pricing model in effect for a long time to come. Opinion only, of course.

Edit: I mean for everything. Not just cars.

 

[Stbentoak]

Deflation is certainly a possibility, but the world is also changed now. I think the best way to look at things these days is that there's a new pricing model in effect for a long time to come. Opinion only, of course.

Edit: I mean for everything. Not just cars.

Agreed, I said this earlier…. People didn’t like it, and fo fooed it…

But I do believe the paradigm has shifted. There will be less vehicles built for inventory and you won’t have tons of choices sitting on the lot waiting to be Dickered over. Unless it’s a Chevy Cruz or a stripped model that they mass produce, there won’t be any dickering or five or 10% off the sticker anymore…. If it’s a hot ticket, or something that’s highly in demand it’s going to be sticker price or above, ordering it or taking it off a lot.…

 

[Quark]

Agreed, I said this earlier…. People didn’t like it, and fo fooed it…

But I do believe the paradigm has shifted. There will be less vehicles built for inventory and you won’t have tons of choices sitting on the lot waiting to be Dickered over. Unless it’s a Chevy Cruz or a stripped model that they mass produce, there won’t be any dickering or five or 10% off the sticker anymore…. If it’s a hot ticket, or something that’s highly in demand it’s going to be sticker price or above, ordering it or taking it off a lot.…

I don't know but trends change when it seems the current trend will continue unabated. I thought trucks were in shortage but I'm seeing a $3,000 customer cash offering. Wait till gasoline reaches $3.79 a gallon which is less than the 52% increase for this past year. When everyone sees the cost of living sky rocket they may not want lay down $70,000 for a new vehicle then it will be a buyers market.

 

[BourbonNcigars]

I'm curious just how much gas prices affect SUV and truck demand. I'm sure the graphs are out there, though. If wifey X wants a new SUV at $70k, is a tank of gas going to be that much difference at $2.69 vs $4.00? Especially when gas is one of those things that can and does increase and decrease, rather than staying at one place for too long. And large vehicles are steadily getting more fuel efficient (but you'd better buy an extended warranty if you plan to keep them).

At a large capacity tank a week that's around $200 a month difference from $2.69 to $4. Hardly much money if you can buy a $60-$70k SUV. Add in the supreme influence of social media and the ability to post about your expensive new car I'd speculate gas prices won't matter much for sales unless the price per gallon reaches Mad Max levels.

 

[Stbentoak]

The number one thing that drove gas prices down about a year ago was a lack of demand worldwide. That was a pandemic aberration that won’t happen again. (?)Three bucks a gallon is going to be normal going forward and possibly higher, certainly not out of the question.
Life is coming back, demand is coming back, And most people that have worked at home for a year and/or have invested wisely in the stock market are sitting on huge piles of cash. They bought this vehicle because they needed it for a specific reason. 4.00+ gas won’t phase them.
I certainly agree that things are cyclical and things may rise and fall again, but auto makers are getting smarter, they are not over producing to glut the market anymore. They will tailor it to create slight shortages, keep demand up and thus prices up.
I didn’t buy a Dmax because I couldn’t afford 4.00 gas… I wanted it….

 

[mikew2069]

Agreed, I said this earlier…. People didn’t like it, and fo fooed it…

But I do believe the paradigm has shifted. There will be less vehicles built for inventory and you won’t have tons of choices sitting on the lot waiting to be Dickered over. Unless it’s a Chevy Cruz or a stripped model that they mass produce, there won’t be any dickering or five or 10% off the sticker anymore…. If it’s a hot ticket, or something that’s highly in demand it’s going to be sticker price or above, ordering it or taking it off a lot.…

I respectfully completely disagree. This isn't about a paradigm shift. As soon as parts, plants and manufacturing lines return to normal, we will ABSOLUTELY see overflowing lots and $5k+ manufacture rebates and $10k off MSRP "Truck Months" again. It might take a year or so but this is a relatively short term supply chain issue.

 

[Chloe_21]

Let me give you a friendly warning, your deal on the agreed pricing based on supplier code will falter unless you provide them a supplier code at the paperwork time. That's the rule, no gaming around it. Your sales person may have agreed to the supplier price, but he/she is assuming you 'qualify' for supplier price and will provide a code when time comes.

Check this portal for more details on supplier program, https://www.gmsupplierdiscount.com/

And one needs to submit a proof of supplier (not just an auth code), usually your paystub showing you're employed by a company who is a supplier in GM's book or your employer's badge with your picture and company logo etc. There is no bending of these rules for supplier, at least in my experience of having used it couple of times now.

https://www.gmsupplierdiscount.com/content/pdf/sup/GM-Rules-Supplier-Discount.pdf

Oh I have one.

I have someone in the family that can provide me with one. I just wanted to try and do it on my own and not use them for it. But looks like that’s not an option.

However there actually are no technology packages available, so I am holding off until available. One of the main reasons why I wanted that car - the technology package. May be a 22.

at least since my previous comment the sales guy and I got it all figured out.

 

[George And]

I respectfully completely disagree. This isn't about a paradigm shift. As soon as parts, plants and manufacturing lines return to normal, we will ABSOLUTELY see overflowing lots and $5k+ manufacture rebates and $10k off MSRP "Truck Months" again. It might take a year or so but this is a relatively short term supply chain issue.

Not if the factories continue to constrain supply.

Let’s say an automaker can sell 10 SUV’s at full boat sticker (never mind the dealers adding on extra costs) or 15 at a average 10% discount. Never mind bigger incentives for some of these models in the past. Of the 15, they are only getting paid for 13.5 of them. At 70k a pop that’s 157k in discounts. It’s costing them. The question is which would you chose.

700,000 in revenue for 10 at full price with 2/3 the material and labor costs?

Or 945,000 in revenue for 15 discounted ones? With full material and labor costs?

I think the automakers are by far realizing the first scenario is more profitable and will adjust production accordingly.

Just my .02 of a dollar.

There used to be a theory that dealers give away new cars at invoice and make their money on the trades and service. I think that they have figured out they can actually make money on the cars themselves.


Sent from my iPhone using Tapatalk

 

[Stbentoak]

^^^^ This guy here…. He gets it…..^^^^

 

[Rdr854]

Not if the factories continue to constrain supply.

Let’s say an automaker can sell 10 SUV’s at full boat sticker (never mind the dealers adding on extra costs) or 15 at a average 10% discount. Never mind bigger incentives for some of these models in the past. Of the 15, they are only getting paid for 13.5 of them. At 70k a pop that’s 157k in discounts. It’s costing them. The question is which would you chose.

700,000 in revenue for 10 at full price with 2/3 the material and labor costs?

Or 945,000 in revenue for 15 discounted ones? With full material and labor costs?

I think the automakers are by far realizing the first scenario is more profitable and will adjust production accordingly.

Just my .02 of a dollar.

There used to be a theory that dealers give away new cars at invoice and make their money on the trades and service. I think that they have figured out they can actually make money on the cars themselves.


Sent from my iPhone using Tapatalk

While profit wise, it makes sense, we have to remember the intangible aspect and that is bragging rights for the most popular vehicle. In the case of Ford, the sales record for the Ford F-150 is coveted and Ford will produce and sell enough trucks so that GM cannot take the crown - no matter the cost. I believe that GM will produce enough trucks and incentivize them in order to have a fighting chance to take that crown.

 

[Quark]

One thing is for sure those plants and guaranteed employee packages don't pay for themselves it takes a lot of sales and those SUVs are big profit. First year demand won't last forever when they are all over town. Sooner than later it will be business as usual. What we have here are buyers trying to justify buying at the height of the market.

 

[mikew2069]

Not if the factories continue to constrain supply.

Let’s say an automaker can sell 10 SUV’s at full boat sticker (never mind the dealers adding on extra costs) or 15 at a average 10% discount. Never mind bigger incentives for some of these models in the past. Of the 15, they are only getting paid for 13.5 of them. At 70k a pop that’s 157k in discounts. It’s costing them. The question is which would you chose.

700,000 in revenue for 10 at full price with 2/3 the material and labor costs?

Or 945,000 in revenue for 15 discounted ones? With full material and labor costs?

I think the automakers are by far realizing the first scenario is more profitable and will adjust production accordingly.

Just my .02 of a dollar.

There used to be a theory that dealers give away new cars at invoice and make their money on the trades and service. I think that they have figured out they can actually make money on the cars themselves.


Sent from my iPhone using Tapatalk

There are other factors at play than just sheer profits. Total revenue, volume and market share all play huge parts. GM has to hit volume targets from their suppliers to keep costs down.

Also keep in mind, GM doesn't care (for the most part) about the dealer's profit. They are going to sell their vehicles to the dealerships at the same cost no matter what.

Sure they might start to offer manufacture rebates once the supply chain returns to normal which will cut into profits but lets say they offer a $5k rebate. They can sell 10 cars at a $10k profit without a rebate or they can sell 50 cars at a $5k profit with the rebate if they have plenty of supply.

So we can use the numbers however we want to make our points. The cool thing is that one of us is definitely right. Only time will tell.

Just my 2 satoshis!

 

[Mxguy741]

Let’s also not leave out that parts business over the life of the vehicle. Parts are sold at very high margin. They will still all thrive to get as many vehicles out the door

 

[Banks22]

So how did we get here, indiscriminate buying? It looks like GM will use any component they can get on these high profit vehicles and people continue clamoring for them. For GM there is no downside.

***** getting into office and China wanting to push the EV market. Therefor high gas prices and china(my opinion

Not if the factories continue to constrain supply.

Let’s say an automaker can sell 10 SUV’s at full boat sticker (never mind the dealers adding on extra costs) or 15 at a average 10% discount. Never mind bigger incentives for some of these models in the past. Of the 15, they are only getting paid for 13.5 of them. At 70k a pop that’s 157k in discounts. It’s costing them. The question is which would you chose.

700,000 in revenue for 10 at full price with 2/3 the material and labor costs?

Or 945,000 in revenue for 15 discounted ones? With full material and labor costs?

I think the automakers are by far realizing the first scenario is more profitable and will adjust production accordingly.

Just my .02 of a dollar.

There used to be a theory that dealers give away new cars at invoice and make their money on the trades and service. I think that they have figured out they can actually make money on the cars themselves.


Sent from my iPhone using Tapatalk

Except the factories aren’t holding back, Flint, MI who makes the gmc and Chevy HD diesels for the whole country have thousands of them lined up waiting for chips, I’ve heard from someone actually at the plant in Texas that Tahoe’s and Yukon’s are all built waiting for chips.

What I believe is really going on is politicians are stopping gas pipe lines, raising gas prices, China/Taiwan are holding millions of chips to restrict output and raise prices on gas vehicles so they can push their EV agenda. If gas vehicles get too expensive along with fossil fuels they go for EV. China controls the world market for batteries and precious earth metals. China would control the world EV market, thus our corrupt politicians are doing what China wants for money in their pockets.
So until my “conspiracy theories” come true and ***** gets arrested for cheating the election and Trump is back in, this will continue.

 

[Kpwweb]

This has been interesting. It seems some people here are confusing General Motors and the dealerships. The dealers are independent, only affiliated with GM through a franchise agreement. Dealers, like other franchised businesses, buy a vehicle from GM at a certain fixed price. They can then charge whatever they choose for a sale price.

We, the consumer can then vote with our dollars. But GM has no control over the sale price of vehicles except for a MAP price. And GM makes no extra money on higher “market pricing”. They would actually have to raise the price to the dealer.

 

[Stbentoak]

We, the consumer can then vote with our dollars. But GM has no control over the sale price of vehicles except for a MAP price. And GM makes no extra money on higher “market pricing”. They would actually have to raise the price to the dealer.

You are correct, except they can control supply... I believe GM "Carries" these vehicles on a dealers lots just for so many days then the dealer has to "buy" it. If they keep supply tighter (But everything they make is sold...), it creates lasting higher prices for dealers. GM is happy and dealers are happy, ( no cash outlay for them...) but the consumer isn't....

 

[Dez78n]

I ordered a Denali with the premium package and diesel on Saturday. I suddenly don’t feel so bad with my 79,200 price. Now let’s just hope It actually gets built.