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For months now I have been hearing talk of dealer markups on the new Chevrolet Camaro. As I commented in the "Chevrolet announces pricing for the 2010 Camaro" article, this seemed so out of step with what was going on with the financial crisis, that I had to go out and some more research for myself to see if I could personally confirm this.
On Saturday, October 18th, I went to a Chevrolet dealer in Schaumburg, Illinois and to say that he experience was pathetic is a real understatement.
I am of the opinion that service in general leaves much to be desired, and to experience anything less that the very best effort put forward is just simply unacceptable in today's business climate, and in my view, a very large contributing factor as to why so many industries are hurting, the automotive included.
So many things went wrong in this visit, some unrelated to the "Camaro" purpose that I was truly stunned. Starting with the general aura of the location, it just feels so unprofessional and unkempt. There is a dark and gloomy cloud of neglect, desperation and abandonment. So very different than when you walk into a BMW, Porsche or Audi dealership. You would think they would have figured this out after all these years of being in the business (or and least, seeing how others do it).
As I mentioned before, the automotive industry has not seen dark days like these for some time. The big three are loosing their asses to the point that there is real speculation of a merger or that one or more might go belly up.
The dealerships are ghost towns. And with this real horror playing out you would think that Chevrolet (among others) would do everything they could to make this experience a more pleasant one.
The Chevrolet Camaro is one of the more awaited rebirths in the industry and on top of all I mention above, not one of the 13 or so salespeople in the dealership (standing around doing nothing) was prepared, or appeared as such, had accurate information to say or give to me, or made a visible attempt to make a dediacted effort to communicate to me what the next steps would be.
Instead, what I get is the guy I am talking to tells me that there could be at least a $10,000 dealer mark-up (he called it a "market adjustment") on the $22,995 MSRP V6 version and perhaps more on the V8. That is, at minimum, an increase of one-third!
I asked him what exactly he meant by "market adjustment" several times because he could not actually come out and just say it, (it's almost like he was embarrassed to say it) but he could not explain it further. He simply said that the number will be more defined in a month or so based on how many orders they got.
They then take me to this 1970s metal desk were the center is so unorganized and stuffed with shit that the guy can't even open the drawer to get a pen. His desk was a disaster, and the entire office looked like there had recently beed a wind storm. The catalog kiosks were all empty.
In the middle of the showroom sat a huge SUV (I can't recall which model) it was painful to look at. It was loaded with accessories, chrome everything and a special vignette paint scheme (dark on top, fading to cream near the bottom), a $9500 dealer add-on making this a $70k vehicle. Who buys this stuff today?
This lead to the second communication error. He told me I could go online and build one. I informed him that this was not correct. You can go to the Chevrolet Camaro website and get info, but you can not build one online (as of this date). He continued to insist, telling me they had done it, but another salesman overheard this, and in fact confirmed that is was not possible, and what they had done was a dealership order, not yet available to the public.
The unrelated (and sad) additional negative memory of this visit happened while having this discussion. A customer walked in after making a previous appointment and after walking around searching for a few minutes, asked for this salesman. He was introduced to him then the sales-guy said "your car is sitting out front, go take it for a spin", when the customer said, "but that is a 2007". The salesman then replied, "what were you looking for?", "a 2005" the customer said. The sales-guy then said, "Oh, hold on, let me see if we got one". OMG!!!
Should this happen in this climate? Should the proper car not be waiting for this poor guy who probably drove in at least 10 or so miles to go see the car and scheduled his saturday to get a Corvette? You don't think this could be a bait and switch do you? Naahhh. It's just so unnecessary.
I know this is how the free market works. I know rare things demand a higher price than common things. And I know that this happens everywhere, like in real estate, for example.
I guess the reason this bothers me is that the excess is so great and that the one who is getting the "topping" is not the one who deserves it (in my view).
I think the structure of pricing should be re-invented. One that is beneficial to the manufacture, who is the one that makes the initial investment and takes the risk to realize a product, (if they want to give a "cut" to the dealer, that is OK too) and one that communicates to early adaptors, honestly and up-front, that those who choose to buy in first, pay a bit more, instead of playing these games.
Apple did it with the iPhone. The first generation was more. I was OK with that, and in fact, disagreed with Apple when they caved in and offered a discount to those who bought the first phone, then found out the second one was cheaper, and complained.
What Apple didn't do was charge above the $599 because it was "in demand" or "hard to get".
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