Quote:
Originally Posted by JCZ5
Quote:
Originally Posted by ///AVM
With specific regard to car sales . . . everything from production to sales have all but come to a stop . . . both demand and supply are at a static nadir. Not sure how it can get any worse for dealerships from a sales perspective?
I am confident dealerships are willing make some great deals right NOW, but there is no benefit or impetus for them to sell cars at a loss – that does not help their cause. In other words, I am of the perspective that the best deals are available right NOW, and the deals are not going to get any better with regard to negotiating down from MRSP.
What will likely happen is that, once things are on the upswing, BMW will likely offer stimulus to purchase/lease via financing options. . . but I do not believe dealerships will be any more willing to 'deal' than they are right NOW.
At the end of the day, they can only offer so much off MRSP before losing money on the sale. What is the break-even point for a M2C? I SUSPECT somewhere around 10-12% off MRSP, and that is not going to change moving forward.
///AVM
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Always value your perspective and insights.
However, the dealer taking a "loss" number is always changing based on incentive, likes you mentioned. But also, let's not forget the decreases staffing that they no longer have to pay. Employee salary is one of the largest expenses for a dealer and that typically influences heavily on what is their drop dead number. Now that only a few employees are working, that allows dealers greater flexibility and decrease the drop dead number to move the vehicle.
I still think end of the this month and early next month would be great times to buy. There are currently over 300 new M2Cs nationwide. In an already niche market, that is a lot of vehicles to move. Not to mention when June / July roles around, hopefully Germany will reopen their manufacturing and more M2Cs will come abroad (saying June and July for Germany reopening is because they out of any of the western countries have the most control over this outbreak and their numbers are much lower than any comparable country. Here's hoping that continues and they can be the model to get things back to "normal") |
JC
When it comes to business matters, I'm not about to question your insight. I know you are quite savvy. On the other hand, I have admittedly never taken a business class in my life. So, I welcome some edification.
My impression over the years I have been purchasing vehicles is that there is the MRSP, then there is the price the manufacturer charges the dealership for the same vehicle. The difference between the two being the 'wiggle room' the dealership has to negotiate sales price.
The less the dealership negotiates off MRSP, the more they make, and vice-versa. What they 'make' contributes to overhead and profit margin.
On a different front, the dealerships do not finance cars themselves. This is handled directly through the manufacturer.
So, for example, BMW can set the APR wherever they want and it has zero direct impact on the dealership margin. I say 'direct' because it is not directly associated with dealership cost or gain associated with sales. Indirectly, of course, the APR has an impact on buyer interest/ability to make a purchase.
Based on your post, it seems things are not so simple as I have made them out.
Thanks brother
///AVM