Honda changes sales strategy.

Honda Australia is changing the way cars are sold,similar to what has been done in the UK.......about half the dealers are gone,and cars are to be sold on a comission basis,where as I understand it ,the Honda Co ,owns the vehicle ,and the selling dealer gets a set comission........Seems to me a way get around retail price maintenance laws.....and cut dealer discounting.......They also say that sales volume is no longer a goal,and may restrict the number of vehicles coming to market.........Also said that Honda outlets must sell bikes as well as cars.........This would be a return to the past when the first Honda cars were sold thru Honda bike dealerships.

Please excuse my ignorance as I have never had anything to do with dealer ships

How are cars sold now ?
I gathered the dealer buys them and then tries to sell them, would this be correct ?

Paul

Paul

There are several ways dealers operate.

Of course most dealers could not possibly have millions in cash tied up in stock. The way it is commonly done is the factory gives them credit called a "floorplan" with limits like any finance deal. They can draw down on the plan taking cars up to the limit and pay interest on the value.

Of course the amount is changing almost hourly as they sell cars (and pay back the factory) or new stock arrives. The factory also fiddles with the amount by having special deals such as model runouts. Dealers are required to hold a minimum amount of stock. The factory can force them to take particular models from time to time and not just cherry-pick the big sellers or profit makers.

There are a number of other schemes including third party finance and there used to be dealers on COD from the factory but I think a business would be in trouble today if they got stung with that.

Lang

Mercedes Benz is doing the same thing as Well..

www.caradvice.com.au/867403/mercedes-ben...ift-to-fixed-prices/

Once again it is a marketing exercise that means nothing. All dealers sell for the same price but one will give you $500 for your beaten up trade-in and another will give you $5,000. Throw in all sorts of freebies like insurance, registration, delivery fees and there is still a huge margin for doing a deal.

lang

I would agree Lang, from what I have just in Seeds link nothing really has changed, yes the car sale price is the same but the dealer can add what ever incentives they like in trade ins and as you suggested insurances and even options to get the deal

I cant see how any of this would enhance the customers experience

I do wonder though if it is in response to Tesla and other new electric car manufacturers that dont have any dealer network and you just buy direct from the factory and price is fixed with no room for negotiation

Paul

Bad luck for American factory workers. Tesla's Shanghai factory is about to start pumping out their new model.

I think once a lot of lower priced EVs hit the market,the car co s are planning on lots of unsold IC cars....And the biggest selling point fo EVs to the under 25s,is will it do a burnout?......Which they will do ,unless traction controll prevents it,because the lekky motor develops highest torque at very low revs ...like stall.

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but needs rotation for cooling.