Saturday, Nov 09, 2013 at 20:11
The manufacturer makes only a small % of profit out of building a new vehicle. The manufacturer relies on parts to provide the profit margins for 20 years to come, once the vehicle is on the road.
The dealer has to make a sizeable profit on the sale, as he only gets one bite at the cherry. He's got a big business to support, usually quite a number of staff, promotional costs, display costs (big yards cost $$$'s), storage costs, vehicle transport (movements) costs, interest charges on floor plans, and a host of other miscellaneous costs.
The problem is, there's a lot of very-
well-hidden collusion as regards pricing, despite laws to the contrary.
I inadvertently started the price-fixing case against Toyota Australia in W.A. in 1988, when I bought 3 dual cab Hiluxes in one deal.
I went "dealer shopping" and came up against a wall of set prices, with no variations.
However, one dealer, with a new salesman, sold me the Hiluxes at a price $600 better than any other dealer.
Unbeknowns to me, the dealership got fined by Toyota Australia for going against an organised "back-room" price-fixing deal.
The salesman (an honest bloke, believe it or not) was angered by the setup, and dobbed in Toyota for resale price maintenance arrangements.
Toyota was fined a huge amount under the resale price maintenance laws of the time, and entered into a court agreement, to never engage in such practices again.
I'll wager that agreement lasted only until they found a way to hide a new agreement, more thoroughly.
Price-fixing, territory-division agreements, cartel agreements, and 100 other "back-room" methods of ensuring the customers are regularly shafted and made to pay more, are just as prevalent as ever, despite increased "watchdog" powers.
FollowupID:
801852