Greedy *******s.....

Brent P wrote:

> In article >, tony wrote:
>> The Dealers are doing nothing that is unethical, immoral, or illegal..
>
> Nobody said they were.
>
>> This whole thread appeared to be one guy frustrated that the car wasn't
>> priced to his satisfaction at a particular dealer and he need to vent
>> about it...
>
> That would be the OP.

Agreed. Both Points...

"Brent P" wrote:
> Yet, other ford dealers can't enter the marketplace and undercut those
> adding 20 grand to price because of ford's allotment set up. Not a free
> market.

Any Ford dealer that has a GT500 can choose to undercut the other dealers if they
wish. They could sell their car for $1 if they wanted.

I think a distinction needs to be made here, and I can wrap it up in a plain
manner. There are a fixed number of cars available to the public. It is
irrelevant that some dealerships don't get any GT500's as the number of cars on
the market is the same whether 100 dealers have them, or 500 dealers. The net
effect on the price of the car is still basically the same.

There is still price competition between dealers. In this case, the price
competition is between all dealerships that get GT500's. Each dealership is going
to try for the highest price they can get without losing the sale to another
dealership. Basically all they need to decide is how long they want to sit on the
car to wait for the buy with the big wallet.

You are trying to imply that price/dealer competition no longer takes place, and
that clearly isn't the case. Once the initial surge in demand is satisfied, the
price will drop even though the number of dealers getting the cars will not
increase.


-Stresa

In article >, Hawk wrote:
>
> "Brent P" wrote:
>> Yet, other ford dealers can't enter the marketplace and undercut those
>> adding 20 grand to price because of ford's allotment set up. Not a free
>> market.
>
> Any Ford dealer that has a GT500 can choose to undercut the other dealers if they
> wish. They could sell their car for $1 if they wanted.

Of course... but they would run out of their allotment of a couple and it
would have no effect on market price. I am sorry I didn't repeat the
whole thing in every instance.

> I think a distinction needs to be made here, and I can wrap it up in a plain
> manner. There are a fixed number of cars available to the public.

Fixed number? Where did you hear that? What's the number?

> It is irrelevant that some dealerships don't get any GT500's

All dealerships get some... real the allotment plan that go leaked.

> There is still price competition between dealers. In this case, the price
> competition is between all dealerships that get GT500's. Each dealership is going
> to try for the highest price they can get without losing the sale to another
> dealership. Basically all they need to decide is how long they want to sit on the
> car to wait for the buy with the big wallet.

The distribution being so thin they aren't going to lose a sale to
another dealership. They might have to come down to find the buyer
willing to pay the second highest amount or something like that, but
that's the only way they 'lose' when their competition can't order more.

> You are trying to imply that price/dealer competition no longer takes place, and
> that clearly isn't the case. Once the initial surge in demand is satisfied, the
> price will drop even though the number of dealers getting the cars will not
> increase.

I would replace 'once' with 'if'. If the lower priced dealer can order
more then at that time, retailer competition will exist. Until then a
dealer isn't losing anything significant by being priced 'too high'.

John C. wrote:
>> I see the "allotment scheme" as a step in the right direction. It more
>> evenly distributes the vehicles between dealers.

"Brent P" wrote:
> That's fine so long as we don't pretend that it's a free market like any
> other product that is distributed where ever it's selling.


You act as though there is an infinite supply of everything but GT500's. Every
item on Earth is in limited supply, just to varying degrees. The GT500 situation
is just as free market based as any other product.

The supply of F-150's is much larger than GT500's and the number of potential
F-150 buyers (or truck buyers in general) is also much larger so comparing the
supply of the two is really quite pointless.

The only reason the price is sky high right now, is that there are a large number
of interested buyers that don't have them yet. Just like the Ford GT, the
hardcore buyers will get their cars, and afterwards the price will drop. In my
area Ford GT's were selling for over $250k initally. Towards the end of their run
they could be had for sticker. The limited market for these cars was pretty much
fulfilled so the price came back to reason. The main reason Ford isn't building
the GT anymore is that the number of qualified buyers that want them is too small
and the price would have to tumble to prevent the inventory from ballooning.

-Stresa

"Brent P" wrote:
>>> Yet, other ford dealers can't enter the marketplace and undercut those
>>> adding 20 grand to price because of ford's allotment set up. Not a free
>>> market.

Stresa Wrote:
>> Any Ford dealer that has a GT500 can choose to undercut the other dealers if
>> they
>> wish. They could sell their car for $1 if they wanted.

"Brent P" wrote:
> Of course... but they would run out of their allotment of a couple and it
> would have no effect on market price. I am sorry I didn't repeat the
> whole thing in every instance.

The price being sky high is because of the limited supply...not because the supply
is spread around to all of the dealers.

Look at it this way...if instead of giving each dealer 1 or 2 cars, what if they
gave 1 dealership all of the cars. Do you think this would help lower the price?
NO, of course not. It would in fact make the situtation even worse, because you
would completely eliminate ALL dealer competition. One dealer would have the
monopoly.


-Stresa

In article >, Hawk wrote:
>
> John C. wrote:
>>> I see the "allotment scheme" as a step in the right direction. It more
>>> evenly distributes the vehicles between dealers.
>
> "Brent P" wrote:
>> That's fine so long as we don't pretend that it's a free market like any
>> other product that is distributed where ever it's selling.

> You act as though there is an infinite supply of everything but GT500's. Every
> item on Earth is in limited supply, just to varying degrees. The GT500 situation
> is just as free market based as any other product.

where did I imply there was an infinite supply or that some other products
didn't use allocation ? However it is not as free market as _any_ other
product.

> The supply of F-150's is much larger than GT500's and the number of potential
> F-150 buyers (or truck buyers in general) is also much larger so comparing the
> supply of the two is really quite pointless.

The point is that a dealership can order as many F150s as it wants to. A
dealership cannot do that with a GT500. Because of this, the way they are
priced is different. Instead of F150, let's say it's model X. Model X has
an estimated production half that of the GT500, but ford will build and
fill any orders it gets. GT500s are still allocated. You have dealership
A with one model X in inventory and he's asking $20K over sticker, same
with ordered cars, $20K over sticker. Dealership B has one in stock
(let's say it's a real ugly color like pink with green stripes and an
orange interior) and will order (whatever color combo) for customers at
MSRP. Who are you going to buy from? Dealership A has to lower their
price or sell few if any model X's.

Now take the GT500, dealership B sells at MSRP, they run out of their
allotment of 2. They won't have any more. Dealership A is now the only
game in town and they are charging 20K over. That's the difference. All
dealership A had to do was wait for dealership B to run out.

I am sure, you won't even address this but go on some sort of made up
tangent about me not liking capitialism or some nonsense... But the fact
of the matter is allotments change the game when retailers compete with
one another.

> The only reason the price is sky high right now, is that there are a large number
> of interested buyers that don't have them yet. Just like the Ford GT, the
> hardcore buyers will get their cars, and afterwards the price will drop. In my
> area Ford GT's were selling for over $250k initally. Towards the end of their run
> they could be had for sticker. The limited market for these cars was pretty much
> fulfilled so the price came back to reason. The main reason Ford isn't building
> the GT anymore is that the number of qualified buyers that want them is too small
> and the price would have to tumble to prevent the inventory from ballooning.

If that were correct, various other models could not exist.

Somehow, there are new top of line 911s, new vipers, new top end
corvettes, new ferraris, new lambos, new aston martins, etc etc every
year.... Somehow, they always have a market to sell to at the low
volumes they make each year. Sure, they get refreshed and redesigned
like every other car, but it's not like ford couldn't do that if they
chose to.

In article >, Hawk wrote:

> "Brent P" wrote:
>> Of course... but they would run out of their allotment of a couple and it
>> would have no effect on market price. I am sorry I didn't repeat the
>> whole thing in every instance.

> The price being sky high is because of the limited supply...not because the supply
> is spread around to all of the dealers.

See other post.

> Look at it this way...if instead of giving each dealer 1 or 2 cars, what if they
> gave 1 dealership all of the cars. Do you think this would help lower the price?
> NO, of course not. It would in fact make the situtation even worse, because you
> would completely eliminate ALL dealer competition. One dealer would have the
> monopoly.

I don't recall saying that fewer dealers with more units would lower
price. In fact I know I didn't even bring up such allotment scheme. But
it's still an allotment scheme, an even less competitive one. An extreme
example of how allotment can effect dealer to dealer competition.

The comparision of allotment is to where orders get filled without such a
concern. And maybe after the initial phase the allotment scheme will fall
away such that dealers order what they have customers for.

"Brent P" wrote:
"Stresa" wrote:
>> The supply of F-150's is much larger than GT500's and the number of potential
>> F-150 buyers (or truck buyers in general) is also much larger so comparing the
>> supply of the two is really quite pointless.

"Brent P" wrote:
> The point is that a dealership can order as many F150s as it wants to. A
> dealership cannot do that with a GT500. Because of this, the way they are
> priced is different. Instead of F150, let's say it's model X. Model X has
> an estimated production half that of the GT500, but ford will build and
> fill any orders it gets. GT500s are still allocated. You have dealership
> A with one model X in inventory and he's asking $20K over sticker, same
> with ordered cars, $20K over sticker. Dealership B has one in stock
> (let's say it's a real ugly color like pink with green stripes and an
> orange interior) and will order (whatever color combo) for customers at
> MSRP. Who are you going to buy from? Dealership A has to lower their
> price or sell few if any model X's.
>
> Now take the GT500, dealership B sells at MSRP, they run out of their
> allotment of 2. They won't have any more. Dealership A is now the only
> game in town and they are charging 20K over. That's the difference. All
> dealership A had to do was wait for dealership B to run out.

The dealerships CANNOT "order as many F-150's as they want". There is also a
limited supply of F-150's. If a given dealership could sell 20,000 F-150's
tomorrow, they could not get enough trucks to satisfy that demand. The supply of
F-150's is much larger than GT500's, but so is the customer base. I am going to
the extreme here to make my point, but the point is valid.

When the Ford Escape first came out my father ordered one. The demand was so high
for the Escape at that time that it took them 6 months to get it. The GT500
situation is no different.

> I am sure, you won't even address this but go on some sort of made up
> tangent about me not liking capitialism or some nonsense... But the fact
> of the matter is allotments change the game when retailers compete with
> one another.

Not having dealer allocation would make the price of a GT500 even HIGHER...because
there would be LESS competition between dealerships. You may not realize it, but
Ford is actually doing you a favor by spreading the cars around to more
dealerships. Otherwise only the huge high volume dealers would have them and the
competition would be almost non-existant.


-Stresa

In article >, Hawk wrote:

> The dealerships CANNOT "order as many F-150's as they want". There is also a
> limited supply of F-150's. If a given dealership could sell 20,000 F-150's
> tomorrow, they could not get enough trucks to satisfy that demand.

within practical, realistic limits of course. Then again this is usenet
and you apparently wish to play games.

> The supply of
> F-150's is much larger than GT500's, but so is the customer base. I am going to
> the extreme here to make my point, but the point is valid.

Outside the realm of practicality.

> When the Ford Escape first came out my father ordered one. The demand was so high
> for the Escape at that time that it took them 6 months to get it. The GT500
> situation is no different.

Really? GT500s are available for open ordering? Where did you hear that?
I am sure lots of people wouldn't mind a 6 or 8 or 12 month wait if it
meant paying twenty plus grand less. (not to mention get their choice of
colors, options, striping, etc)

>> I am sure, you won't even address this but go on some sort of made up
>> tangent about me not liking capitialism or some nonsense... But the fact
>> of the matter is allotments change the game when retailers compete with
>> one another.

> Not having dealer allocation would make the price of a GT500 even HIGHER...because
> there would be LESS competition between dealerships. You may not realize it, but
> Ford is actually doing you a favor by spreading the cars around to more
> dealerships. Otherwise only the huge high volume dealers would have them and the
> competition would be almost non-existant.

You haven't read the allotment scheme then. It's the high volume dealers
that get the most in the allotment scheme that was published.

You assert that without an allotment scheme only the high volume dealers
would get GT500s. You assert it without anything to back it up. Why would
only they get them? Because ford would show them a preference? That
preference would just be a different form of allotment.

Of course ford would always need to decide who's orders will be filled
first, and that is true with or without allotments. However, without, the
dealership in hicksville that ordered 8, will eventually get 8 provided
they pay for them, rather than the 1 the allotment scheme says they get.

You could even argue that deciding how to fill the orders of dealers is
an allotment scheme of sorts... and that would be true in some respects.
However with just that, one could go in, test drive the one they got early
and want $70K for, decide it's worth waiting for and order one for MSRP
that will come in 6-8 months later. A dealer doing that would certainly
sell more and there would be competition for the cars that get delivered
later...

"Brent P" wrote in message:
> Does a fixed allotment create scaricty? Yes or no.

No...because the number of cars Ford ultimately builds has no correlation to how
they are spread around to the various dealers. If they plan to build 7000
GT500's, the scarcity is determined by how many people want to buy one. If nobody
wanted one...they could build 100 and they wouldn't be considered scarce from a
buyers perspective.

Again we are back to standard market forces...


-Stresa