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Who says a manufacturer can't control dealer pricing? (Just ask Dodge)

Mike02z

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Just because MSRP buyers get priority does not mean people who pay ADM will be waiting. Dodge could probably build all 3300 in a month if they wanted to. Some dealers will sell at MSRP but the majority won't.

Let's say we have dealer x and dealer y. Dealer x sells a Demon at MSRP today. He goes through the order sheet and submits the order. Across town, dealer y sells a Demon with a 50k ADM. Fills out the order sheet and submits it the same day. The orders hit Dodge at the same time. They build the car for dealer x. Dealer y is second in line. Dodge will not start building these until late summer with an early fall delivery. So the Demon for dealer x sits outside the plant and 2 weeks later, they roll out the dealer y car and they are sitting next to each other in the lot. Dodge releases them to the dealer in Q3 and guess what, both dealer x and y get there cars at the same time.

We need to remember, we are talking 3300 cars. Dodge could probably build all 3300 in a month if they wanted to. Again I think this memo is nothing more than smart marketing by FCA. There are only two ways to stop ADM in my view. One is to refuse to pay it. The other is the manufacturer dealing directly with the end client. Just like Ford did with the GT. Granted, it would be far more work to do this for 3300 cars vs 500 but until that happens, there will always be more people with disposable cash willing to pay ADM. There is absolutely nothing in the memo that will stop a dealer from selling a Demon at 50K ADM. FCA can't tell their dealers how much to sell a car for.

If you go to the Hellcat forum, there are about 20 people posting how they are getting a Demon at MSRP because their dealer told them they were number 1 on the list. I suspect for every 20 that think they are paying MSRP, 17 of the 20 will be disappointed.
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firestarter2

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A good dealer makes their real money in used, parts, service and auto body. New car sales is normally a break even or loss leader to bring in new customers and used cars.

I applaud Dodge for at least trying to do something about the ADM craziness out there. Heck dealers are asking $25k over for the new Civic Type R and they're making 6,000 of them this year. Manufacturers should work on boosting the profit margins across their entire lineup for dealers so they're not so pressed to try and make a killing on the specialty cars.
My impression is very few members here got their cars from their local dealer. So their traditional income streams dont apply.
 

jma406

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Just because MSRP buyers get priority does not mean people who pay ADM will be waiting. Dodge could probably build all 3300 in a month if they wanted to. Some dealers will sell at MSRP but the majority won't.

Let's say we have dealer x and dealer y. Dealer x sells a Demon at MSRP today. He goes through the order sheet and submits the order. Across town, dealer y sells a Demon with a 50k ADM. Fills out the order sheet and submits it the same day. The orders hit Dodge at the same time. They build the car for dealer x. Dealer y is second in line. Dodge will not start building these until late summer with an early fall delivery. So the Demon for dealer x sits outside the plant and 2 weeks later, they roll out the dealer y car and they are sitting next to each other in the lot. Dodge releases them to the dealer in Q3 and guess what, both dealer x and y get there cars at the same time.

We need to remember, we are talking 3300 cars. Dodge could probably build all 3300 in a month if they wanted to. Again I think this memo is nothing more than smart marketing by FCA. There are only two ways to stop ADM in my view. One is to refuse to pay it. The other is the manufacturer dealing directly with the end client. Just like Ford did with the GT. Granted, it would be far more work to do this for 3300 cars vs 500 but until that happens, there will always be more people with disposable cash willing to pay ADM. There is absolutely nothing in the memo that will stop a dealer from selling a Demon at 50K ADM. FCA can't tell their dealers how much to sell a car for.

If you go to the Hellcat forum, there are about 20 people posting how they are getting a Demon at MSRP because their dealer told them they were number 1 on the list. I suspect for every 20 that think they are paying MSRP, 17 of the 20 will be disappointed.
My local Dodge dealer has been offered $40,000 over MSRP from another dealer for their Demon when and if. He said the offer was good for any other dealer also. Does anyone really believe this car will be sold for MSRP or close to that. It's called greed, and the opportunity is there.
 
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Spa2k

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A couple of things. The dealer and the buyer have to sign a notarized contract showing the price. Then it has to be reviewed by the Demon Conceirge. And where did you see the orders will be accepted on a first-come, first-served basis? FCA has plenty of time between today (first day of order acceptance) and start of production to sort all of the orders in order of price. There are going to be some surprised ADM buyers who are going to find out that money won't buy them a priority staus on their order.

ADM won't go away until buyers refuse to pay it. All a dealer has to do to "legally" beat the FCA system is buy the car himself, title it to get it off the MSO and sell it as a used car to the highest bidder. Unfortunately, the buyer won't get his name on the factory plaque on the dash, but I'm sure the aftermarket will take care of that.
 

Shabooty

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I believe Porsche has a VIP list that new vehicles are offered to at MSRP. For example the Porsche 918 and 911R. Not an allocation, only offered to people on Porsche's list. You order the car and select what dealer you want it sent to. The dealer is unable to add an ADM to the car. It is once the cars hit the used market that Porsche no longer has the ability to regulate any markups. Porsche has so many variants that it may not be in place for all cars it builds, but for brands like Ford/Dodge that only have 1-2 halo cars on sale at any given time they could devise a plan.
The list is dealer to dealer. It's not a list that Porsche has. Dealers get allocations for the GT cars and depending on how or if you're on the dealer's preferred list, you are given the opportunity to put in an order for an allocation. According to the dealer I was working w/, these cars are always (at least through this dealer) sold at MSRP new. Then when they are traded back, the dealer pays back MSRP as long as it is gently used w/ low mileage and sells the now used car at a premium. This is how it was explained to me. As a matter of fact, there was a guy that traded his GT3RS. We had the same sales guy and he told me the dealer bought it back for full MSRP and it was then listed at $300k.... T.T
 

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machsmith

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Got everything configured the way I wanted. I am out of town until tomorrow so couldn't sign anything. Came to 91k the way I wanted it. Was thinking about it while driving down the highway. I don't have interest in the car as much as I should for purchasing it. I could turn around and sell it for 10k+ Mark up. Called my dealer and asked them to cancel and that I was sorry. Told them someone else will be a lot happier. Told me they won't have a problem selling. I told them to put me first in line for the GT500 :)
 

Mustang1260

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I call Bs... I just tried to secure an allocation. I was told in front of attorneys that the region of dealers in a southern state all agreed that they would assert a $10k ADM on the Demon and they wouldn't budge and already had their allocation reserved.
Sorry but I call BS.
"In front of lawyers"--what, the world's most incompetent lawyers?
Simply put- Price fixing and on top of that as I assume at least 3 were involved conspiracy to Price Fix. Federal Felony and a violation of the Sherman Anti-Trust act.

Christ-- you have your MSRP allocation. File a simple complaint, name the dealerships, and schedule the depositions of all those at the meeting. You'll never spend a dime on the depositions--one dealer will crack damn fast and given you the MSRP allocation to get out of the mess..as to the the others you, let them lose for say $5,000 each. If that region is big enough you just got yourself a free Demon.

Federal Antitrust Enforcement

Enacted in 1890, the Sherman Act is among our country's most important and enduring pieces of economic legislation. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.

Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals, if the offense was committed before June 22, 2004. If the offense was committed on or after June 22, 2004, the maximum Sherman Act fine is $100 million for corporations and $1 million for individuals, and the maximum Sherman Act jail sentence is 10 years. Under some circumstances, the maximum potential fine may be increased above the Sherman Act maximums to twice the gain or loss involved. In addition, collusion among competitors may constitute violations of the mail or wire fraud statute, the false statements statute, or other federal felony statutes, all of which the Antitrust Division prosecutes.

In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of bid-rigging and price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered.

Forms of Collusion

Most criminal antitrust prosecutions involve price fixing, bid rigging, or market division or allocation schemes. Each of these forms of collusion may be prosecuted criminally if they occurred, at least in part, within the past five years. Proving such a crime does not require us to show that the conspirators entered into a formal written or express agreement. Price fixing, bid rigging, and other collusive agreements can be established either by direct evidence, such as the testimony of a participant, or by circumstantial evidence, such as suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.

Under the law, price-fixing and bid-rigging schemes are per se violations of the Sherman Act. This means that where such a collusive scheme has been established, it cannot be justified under the law by arguments or evidence that, for example, the agreed-upon prices were reasonable, the agreement was necessary to prevent or eliminate price cutting or ruinous competition, or the conspirators were merely trying to make sure that each got a fair share of the market.

Price Fixing

Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:

Establish or adhere to price discounts.

Hold prices firm.

Eliminate or reduce discounts.

Adopt a standard formula for computing prices.

Maintain certain price differentials between different types, sizes, or quantities of products.

Adhere to a minimum fee or price schedule.

Fix credit terms.

Not advertise prices.

In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.
 

honeybadger

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Sorry but I call BS.
"In front of lawyers"--what, the world's most incompetent lawyers?
Simply put- Price fixing and on top of that as I assume at least 3 were involved conspiracy to Price Fix. Federal Felony and a violation of the Sherman Anti-Trust act.

Christ-- you have your MSRP allocation. File a simple complaint, name the dealerships, and schedule the depositions of all those at the meeting. You'll never spend a dime on the depositions--one dealer will crack damn fast and given you the MSRP allocation to get out of the mess..as to the the others you, let them lose for say $5,000 each. If that region is big enough you just got yourself a free Demon.

Federal Antitrust Enforcement

Enacted in 1890, the Sherman Act is among our country's most important and enduring pieces of economic legislation. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.

Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals, if the offense was committed before June 22, 2004. If the offense was committed on or after June 22, 2004, the maximum Sherman Act fine is $100 million for corporations and $1 million for individuals, and the maximum Sherman Act jail sentence is 10 years. Under some circumstances, the maximum potential fine may be increased above the Sherman Act maximums to twice the gain or loss involved. In addition, collusion among competitors may constitute violations of the mail or wire fraud statute, the false statements statute, or other federal felony statutes, all of which the Antitrust Division prosecutes.

In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of bid-rigging and price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered.

Forms of Collusion

Most criminal antitrust prosecutions involve price fixing, bid rigging, or market division or allocation schemes. Each of these forms of collusion may be prosecuted criminally if they occurred, at least in part, within the past five years. Proving such a crime does not require us to show that the conspirators entered into a formal written or express agreement. Price fixing, bid rigging, and other collusive agreements can be established either by direct evidence, such as the testimony of a participant, or by circumstantial evidence, such as suspicious bid patterns, travel and expense reports, telephone records, and business diary entries.

Under the law, price-fixing and bid-rigging schemes are per se violations of the Sherman Act. This means that where such a collusive scheme has been established, it cannot be justified under the law by arguments or evidence that, for example, the agreed-upon prices were reasonable, the agreement was necessary to prevent or eliminate price cutting or ruinous competition, or the conspirators were merely trying to make sure that each got a fair share of the market.

Price Fixing

Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:

Establish or adhere to price discounts.

Hold prices firm.

Eliminate or reduce discounts.

Adopt a standard formula for computing prices.

Maintain certain price differentials between different types, sizes, or quantities of products.

Adhere to a minimum fee or price schedule.

Fix credit terms.

Not advertise prices.

In many cases, participants in a price-fixing conspiracy also establish some type of policing mechanism to make sure that everyone adheres to the agreement.
You seem like a good person to know. I like you.
:cheers:
 

5.0 435

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I've crossed dealers off my shopping list and they know it. The Atlanta area has a ton of dealers to choose from. Ford dealers are the worst IMO. Congrats to Dodge for trying to handle this situation. I realize most of these ford dealers are not family owned and could care less. Chevy especially corvette dealers are the easiest to deal with.
 
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likeaboss

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My impression is very few members here got their cars from their local dealer. So their traditional income streams dont apply.
My 16 & 17 GT350 (MSRP Deals) both came from local dealers so I guess I'm a special case.

You bring up a good point. I know quite a few people that have a real sour taste now about Ford and the local dealerships because of the GT350 ADMs they were asking. These individuals are also the type of people most of their friends and family go to for vehicle recommendations. You better believe those ADM dealers lost out on a lot of potential business from these people and their social network. I don't think the dealers think about the long term impact and instead focus on the quick score.
 

mdmoore23

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Got everything configured the way I wanted. I am out of town until tomorrow so couldn't sign anything. Came to 91k the way I wanted it. Was thinking about it while driving down the highway. I don't have interest in the car as much as I should for purchasing it. I could turn around and sell it for 10k+ Mark up. Called my dealer and asked them to cancel and that I was sorry. Told them someone else will be a lot happier. Told me they won't have a problem selling. I told them to put me first in line for the GT500 :)
I don't blame you. That kind of cash for a current gen Challenger just doesn't seem right. I had a 16 Hellcat that I bought for $2k off msrp when many were still asking adm. Even at that price, I kinda always felt like I paid too much for that car. The 2015 prices seemed more in line, but the 2016 increase was a little much, and now the Demon at $90k? I know this argument is moot to some, but all it typically takes is a pulley, drag radials, and a tune to run 9's in a Hellcat. Outside of the transbrake, most of the other stuff is pretty easy to add. I like what they're doing addressing the adm and how they promote their cars, but this one doesn't seem like a hit to me. Maybe I'm wrong.
 

machsmith

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Anything can be made faster, it's the allure of the car in stock form.

The thing that turns me off most about the car is the fender flares, to me it should have wide body fenders, would have made the car look tons better.

I just wouldn't feel comfortable driving the car as those flares aren't my taste. Had those not been there i would have pulled the trigger. Even then it still wouldn't have been my type of car, just something to play around with for a while. I figure if there is a mopar nut behind me in line, they would be ecstatic to get it.
They told me they had a few guys in line and that it would sell, I had no doubt about that.
Will be getting the next gt500 from the same dealer, that is if they can get the KR version (if there is one). They couldn't ever get the 350R.
Would be nice if ford thought of the consumer purchase in some way, like dodge did here. Well done!
 

Mike02z

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My dealer called me today. They are one of the largest dealers within 100 miles. They sold me both my 16 Hellcats and I basically sold another 16 for them. They got 6 allocations. So I was offered one of the allocations. It was NOT at MSRP, but at 25k over.

I did not really want a Demon but even if I did, I'm currently out of work right now so it's not happening. It appears there are a few on the HC forum that have shown signed orders at MSRP. There was a dealer from Iowa who posted one at MSRP this AM and I was the first one to see it. Too bad I'm not rich.
 

FHGT350R

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My 16 & 17 GT350 (MSRP Deals) both came from local dealers so I guess I'm a special case.

You bring up a good point. I know quite a few people that have a real sour taste now about Ford and the local dealerships because of the GT350 ADMs they were asking. These individuals are also the type of people most of their friends and family go to for vehicle recommendations. You better believe those ADM dealers lost out on a lot of potential business from these people and their social network. I don't think the dealers think about the long term impact and instead focus on the quick score.
I've purchased three hard to find cars locally all under MSRP...

2015 Hellcat 7/2015
2016 Tech pack GT350 ordered 9/2015
2017 GT350R 5/2017
Also some Toyota TRD PROs but who cares about those:)

Definitely have to be in the right place at the right time but these ADMs are just games to dealers. Be patient and don't show your hand.
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