Mercedes boss: Haggle free new car sales is working – and it’s what our dealers wanted

[MikeInWimbledon]

My C43 is also worth £30k after four years of ownership and I bought it ex-demo for less than I'm buying the BMW. So I'm not entirely sure that's true, simply based on that fact. Which depreciates faster isn't really what I care about to be fair, keeping my dad's money in the car is what matters to me. I've achieved that with the C43 and I believe I can achieve it with the BMW.

Understood, you bought it used / ex-demo in 2019, when cars weren't in short supply.

As I said before, to compare depreciation, you need to compare like to like, not used in 2019 through Covid / supply chain / EV deals to 2023, compared to brand new 2023 to 2027.

My point was that the retained values on used 3 litre 3 series have always been strong. They have a very strong 2nd and 3rd user client base.

You retained your £30k inheritance money because you bought used, ahead of a unique set of circumstances: Covid, the China chip supply chain problems, and the EV greedflation price changes. That won't happen again.

Back in 2019, I was turning down low mileage 2007 F/L SL500's priced at £10k. Those same vehicles are advertised at £16k, and probably achieving £15k It's been an odd time.

 

[st13phil]

They cringe when I negotiate. On Tins of beans.

I knew a guy a few years ago who would routinely negotiate the total price at a supermarket checkout for a large trolley-load of groceries.

 

[Bobby Dazzler]

I knew a guy a few years ago who would routinely negotiate the total price at a supermarket checkout for a large trolley-load of groceries.

I knew we’d met before

 

[st13phil]

For sure, but surely what's disappearing is that ability for a dealer and his staff to chase a client with an offer?

Converting that lead to a deal, especially in the run up to month, quarter and year end?

That ability to chase the regular customer for an earlier replacement, or to chivvy someone whose car is overdue for replacement?

That ability to push a sale by massaging a trade-in value? (And then sliding that vehicle out to another client or to the trade generally)

Or just to sell on a cancelled client order, or a manufacturer's promo?

^ This.

Those who were unwilling to negotiate were happy to pay the asking price anyway.

It'll be interesting to see how rigid the "no negotiation" approach is when there are acres of unsold product in storage.

 

[Bobby Dazzler]

For sure, but surely what's disappearing is that ability for a dealer and his staff to chase a client with an offer?

Converting that lead to a deal, especially in the run up to month, quarter and year end?

That ability to chase the regular customer for an earlier replacement, or to chivvy someone whose car is overdue for replacement?

That ability to push a sale by massaging a trade-in value? (And then sliding that vehicle out to another client or to the trade generally)

Or just to sell on a cancelled client order, or a manufacturer's promo?

Agreed, it’s a big change to the sales model and the manufacturers are banking on the benefits outweighing the drawbacks.

 

[Bobby Dazzler]

^ This.

Those who were unwilling to negotiate were happy to pay the asking price anyway.

It'll be interesting to see how rigid the "no negotiation" approach is when there are acres of unsold product in storage.

I know of several multinational businesses who are managing to maintain or in some case increase their revenue despite fairly significant reduction in volumes.

They’ve each said that reducing costs has had a role to play but they’ve all said that they’ve been able to hold on to their margins much more easily than ever before.

A common comment has been that both individuals and businesses are expecting price rises due to inflation and aren’t negotiating or going elsewhere.

If those same trends affect all players in the market then it works well for them all, as they all achieve a greater margin whilst maintaining their previous market share.

That and the supply shortages and market anomalies make now the perfect time to make the change they’ve been talking about in the industry for many years.

With many manufacturers making the change somewhere in the world at the moment; the short term wins/losses will likely average out by the time they’ve finished..

 

[MikeInWimbledon]

I'm away with too much time on my hands - as you can probably tell -and looking at replacing my runaround with a small EV - perhaps a Nissan Leaf, e-Golf, or Zoe. Despite the general "shortage" situation, there's some weird stuff going on with run-out models. Massive price dumps on "ex-demo" stock.

That's not something a manufacturer can control centrally via a website.

 

[st13phil]

Unless the manufacturers have found a way to flex their manufacturing capacity at minimal cost (spoiler alert: they haven't), then they still need to maintain production volumes in order to cover their substantial capital investment in plant, equipment, and product design & development.

The level of retail market demand will vary due to seasonal and other factors that can be planned for, but also through external factors such as interest rate movements that are less easy to plan for. The traditional way to keep demand levels generally in line with manufacturing volume has been to vary the selling price through deals and incentives. In the "fixed price, agency model" I don't understand what the mechanism will be to encourage demand when there is oversupply or depress demand when supplies are tight.

 

[KennyN]

I'm away with too much time on my hands - as you can probably tell -and looking at replacing my runaround with a small EV - perhaps a Nissan Leaf, e-Golf, or Zoe. Despite the general "shortage" situation, there's some weird stuff going on with run-out models. Massive price dumps on "ex-demo" stock.

That's not something a manufacturer can control centrally via a website.

View attachment 142296

That a great price for such a new EV , last year a chap in work paid more than that for a five year old Leaf with the smaller battery.

K

 

[ALFAitalia]

The proportion of customers is reducing who are (a) keen to negotiate, and (b) don’t buy based upon the lowest deposited and lowest monthly finance cost.

I know plenty of people who would be horrified at the thought of haggling, even if paying cash. They cringe when I negotiate. On Tins of beans.

Send those customers to me please......very rarely I get a punter who is not angling for a deal.....more often then not a deal that's not even possible!.....but negotiating to find that acceptable point is all part of the sales process. So as far as saying customers don't want to haggle....I call BS!

 

[SamW]

I think agency is a good thing.

Some bizarre rationale in here imo.

The likes of 10k saving etc is a cool story bro, but in reality, if the offer was 5k off, for everyone, nationally, available in the same timeframe, no messing around, from your local or preferred centre - you wouldn’t buy it??

People walking from the brand just because of the transparent pricing structure is just short sighted and your loss. Do you not buy a Rolex because the price is set? Or turn your nose up at apple products?

 

[Scooby_Doo]

I did consider a new C300 to replace my C250d 4matic ,but MB's new no discount policy put me off @ £55k+. OK ,pushed the boat out a bit and got a Macan , still no discount but the residuals are going to be a lot better than the MB.

 

[NJSS]

Do you not buy a Rolex because the price is set? Or turn your nose up at apple products?

I have Breitling watches, Android & Windows devices & would never consider any product from Rolex or Apple.

NJSS

 

[Scooby_Doo]

I'm away with too much time on my hands - as you can probably tell -and looking at replacing my runaround with a small EV - perhaps a Nissan Leaf, e-Golf, or Zoe. Despite the general "shortage" situation, there's some weird stuff going on with run-out models. Massive price dumps on "ex-demo" stock.

That's not something a manufacturer can control centrally via a website.

View attachment 142296

EV residuals are rock bottom at the moment.

 

[Smiley]

I'm away with too much time on my hands - as you can probably tell -and looking at replacing my runaround with a small EV - perhaps a Nissan Leaf, e-Golf, or Zoe. Despite the general "shortage" situation, there's some weird stuff going on with run-out models. Massive price dumps on "ex-demo" stock.

That's not something a manufacturer can control centrally via a website.

View attachment 142296

All EVs have suffered either large or massive depreciation over the last 6-9 months, some more than others - the Nissan Leaf being one of them. It is a decent car as a town run around, bear in mind that it uses Chademo as the rapid charging connection whereas nearly every other car ex Tesla uses CCS, Chademo will be phased out at charging points over time. Not an issue for a town run around charged at home but will impact Leaf residuals at some point.

 

[Smiley]

My C43 is also worth £30k after four years of ownership and I bought it ex-demo for less than I'm buying the BMW. So I'm not entirely sure that's true, simply based on that fact. Which depreciates faster isn't really what I care about to be fair, keeping my dad's money in the car is what matters to me. I've achieved that with the C43 and I believe I can achieve it with the BMW.

A car is a terrible purchase to "keep money in" - you would be better off with an asset that generates income and has some chance of appreciating in value not depreciating. Then use the income from the asset to fund a car.

 

[Smiley]

EV residuals are rock bottom at the moment.

I would tend to agree with you. But the lowest price of any asset is zero so whether they have further to fall we'll find out.

 

[Bobby Dazzler]

I did consider a new C300 to replace my C250d 4matic ,but MB's new no discount policy put me off @ £55k+. OK ,pushed the boat out a bit and got a Macan , still no discount but the residuals are going to be a lot better than the MB.

Although a contributing factor to Porsche’s excellent residual values is their attitude towards discounts. A very small discount (relative to other manufacturers) on the volume models and diddly on the rest.

Improved residuals may be an outcome of Mercedes strategy to avoid discounts, stop chasing volume, and focus on maximising margins. Sounds a bit like their Stuttgart neighbour.

 

[Smiley]

Although a contributing factor to Porsche’s excellent residual values is their attitude towards discounts. A very small discount (relative to other manufacturers) on the volume models and diddly on the rest.

Improved residuals may be an outcome of Mercedes strategy to avoid discounts, stop chasing volume, and focus on maximising margins. Sounds a bit like their Stuttgart neighbour.

My impression is that MB has an inward facing culture and has lost focus on the customer. It can keep going for a while like this but ultimately it will kill the business. I'm not convinced that MB will survive the next big set of changes coming in the auto industry as new Chinese EV companies join the competitive landscape.

 

[ALFAitalia]

Discount can be had quite commonly on Rolex watches....same as any other big brand watch.