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Manufacturer's Discounts

glojo

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Do manufacturers think about any consequences when they offer discounts on new cars, or are they simply interested in increasing sales and don't give a hoot about the second-hand market?

Regards
John
 
Do manufacturers think about any consequences when they offer discounts on new cars, or are they simply interested in increasing sales and don't give a hoot about the second-hand market?

Regards
John

Sadly, I don't think they give a hoot. The eternal chase for the $ and devil take the hindmost
 
I guess it's all about 'shifting stock'. From a sales point of view I suspect that simply concentrating X amount of 'units' per year, satisfied that they have made the car X% recyclable in the first place and made sure that the emissions laws are met or exceeded.

There was talk a whille ago though of the possibility of manufacturers being made responsible for the removal of old vehicles I do believe.
 
I remember the early 90's, when Porsche cut their prices by a significant margin (something to do with the exchange rate) with no notice to customers. Some seriously Peed off Porker owners!!
 
Why should the manufacturer care about the second hand market? It does not add anything to their bottom line and at the end of the day they are answerable to shareholders who want to see a return on their investment.
 
Depends on the manufacturer.

BMW and Merc are losing out because of this, their discounts vary an aweful lot. Take Mercedes as an example, one month they will offer standard dealer discount, the next they'll be giving registration bonus' of several thousands. It's knowing when to buy that is important where these are concerned.

For example my car is only a C180 but there was a discount of approx. £4500, a couple of months later this had dropped back to just under £2000. This money has to come from somewhere on the second hand market. A trader will always bid you on the worst case because they are aware what they were going for either a few months prior or at that particular moment in time, if a trader pays low money, it reflects on their forecourt prices which in turn moves onto the private used car buyer.

Next up... Ford, vauxhall, citroen, renault etc. Why are the residuals so awful? It is not uncommon to see discounts of over 20% on any one of these vehicles if you know where to look, and no I'm not talking about imports, these are for UK cars. Some traders are dodgy enough to access these on a courtesy car scheme that gives even more discount and so as you can imagine this has an impact on the used market.

Chrysler... I've put these on their own purely for one vehicle. The 300C. They made such a big deal out of how they weren't going to offer any discount to help bring the marques residuals back up in line with the competitors on the market... what ever happened to that? It was a good plan but it's all gone to sh*t now they're happily discounting the cars! :rolleyes:

Audi/VW - Spot on, they have the best marketing campaigns by far. Everything is tight under wraps and they sell discontinued models right up until the day the new vehicles are released. For example... how many of you can say you knew the A4 cab was being discontinued? That there is a new A4 out in about 7 months and what it looks like besides a few speculative photoshops? They really do have it spot on.

Well anyway... the good thing about VW and Audi is you go to them one month and the discount is £x, go back 6 months later, its still £x. This is VERY important. The only time they change is when they become a "niche" product as they put it ie. when the car is first released they offer lower discounts because the retail lads can knock them out at full whack. Or at the other end of the scale when a product is being discontinued, rather than blow the back out of them they actually reduce available discounts in order to strengthen the residuals slightly for when the new shapes are released and wow does it work!

With this in mind, I say its a 50/50 split with manufacturers caring :D
 
Do manufacturers think about any consequences when they offer discounts on new cars, or are they simply interested in increasing sales and don't give a hoot about the second-hand market?

They probably do.

But I'd guess that when things are a little bit tough the management are more concerned about this month or quarter than a couple of years down the line. At the end of the day they have to explain to the board and shareholders why they made a loss. Do the shareholders care about residuals?
 
Next up... Ford, vauxhall, citroen, renault etc. Why are the residuals so awful? It is not uncommon to see discounts of over 20% on any one of these vehicles if you know where to look, and no I'm not talking about imports, these are for UK cars. Some traders are dodgy enough to access these on a courtesy car scheme that gives even more discount and so as you can imagine this has an impact on the used market.

I thought it was standard to see discounts of 20% or more on these without havng to look at all! As long as you're flexible on the spec so that you take advantage of whatever deals are going about.

As long as you factor these in at the start then the residuals usually look rather better.
 
A big problem on residuals can be caused by the huge discounts offered to organisations like the police, once these cars or 4x4s are offloaded they pull the rest of the sales in the particular vehicle down as well. I was told what the police pay for a Lexus 4x4 you would not believe it (no I would have to kill you if I told you). Big discounts offered to Joe Public by dealers only occur when they can not shift certain models and when a model change is nigh.

gary
 
A big problem on residuals can be caused by the huge discounts offered to organisations like the police, once these cars or 4x4s are offloaded they pull the rest of the sales in the particular vehicle down as well.

Police can put high mileages on their cars. I don't think that they have the same effect on the market as the 1 and 2 year old models coming out of company fleets and leases.
 
A big problem on residuals can be caused by the huge discounts offered to organisations like the police, once these cars or 4x4s are offloaded they pull the rest of the sales in the particular vehicle down as well. I was told what the police pay for a Lexus 4x4 you would not believe it (no I would have to kill you if I told you). Big discounts offered to Joe Public by dealers only occur when they can not shift certain models and when a model change is nigh.

gary

Go on - kill us - what is the police discount?
 
Large makers are really financial institutions with a car builder attached. Volume is very important to them in order to keep a complex financial merry go round running, which of course funds the process of making cars.

Thus makers happily play ducks and drakes with discounts and support when it suits them.

It is the punter who suffers if the residuals drop heavily because of such antics. But that is 2/3 years away by which time the current management may all be out of a job but their Q2 sales target issue is NOW!
 
Do manufacturers think about any consequences when they offer discounts on new cars, or are they simply interested in increasing sales and don't give a hoot about the second-hand market?

Regards
John

the latter!:crazy: move the metal :rolleyes:
 

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