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Why some AD margins so high?? Sigh, too greedy.

TristanC

By TristanC,
in Conti Talk

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TristanC

TristanC

Neutral Newbie

I just walked around Leng Kee last week and was looking at (yes, my current fav) the renaultsport Megane. Also saw the brand new citroen DS3.

 

Based on what the sales people told me:

 

DS3 OMV = 22K.

 

Since basic cost = OMV + Custom (OMV X 0.2) + GST of 7% of (OMV+Custom) + ARF (same as OMV) + $140 registration + COE... the math is like this:

 

DS3 22K+4.4K+1.848+22K+140+32K = 82,388 <--- Basic Cost. Pre Launch Pricing was 89,999 So the AD only earns like $7,611???

 

Renault RS250 OMV = 29K

 

29K+5.8K+2,436+29K+140+42,810 = 109,186 <--- Basic Cost. Pre Launch Pricing is 145,888 So the AD earns like $36,702??? [hur]

 

$7,611 vs $36,702 is ridiculous. Left a bad taste in my mouth... Love the car, but the pricing is really stupid. No wonder Renaults sell so "well" in Singapore. It will depreciate like a gold bar dropping into the ocean. Really a shame.

 

But the weird thing is, their margin is only 11K on the outgoing renault sedan. So that's quite good value.

 

If the renault megane RS were $120K and they earn 11K... I'd have a new car on the driveway before Christmas. [drivingcar]

 

 

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Ben5266

Ben5266

Supercharged

Business strategy.

B+B car. Low margin, high volume.

Niche car. High margin, low volume.

If all models sells at same margin, then they will either overprice their product or fail to maximize their profit.

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Dlar2

Dlar2

Neutral Newbie

In Singapore, all AD are monopoly, right? One car brand one AD, if that is not monopoly, what do you call that?

PI in Singapore CMI, have not enough technical expertise or no support and some even fly by night.

So do we have a choice?

Profit margin is not determine by us, but by AD.

Look at BMW F10's margin and Audi, no wonder Audi could run every week Saturday big big ad in Straits Times.

Who pay for it?

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Silver_blade

Silver_blade

Turbocharged
(edited)

Don't think this is fair comparison. I'm not surprise that megane RS, being a low production, niche (in our local context), etc., has higher mark up.

 

Feel a better comparision will be between DS3 & entry level mini, since the former is suppose to offer alternative to the mini, but with higher specs & lower price.

Edited by Silver_blade
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Kyojin

Kyojin

1st Gear

what do you think car distributors/dealers are? charity? [rolleyes]

 

they have to add margins to maintain a whole of things, including aftersales/warranty, the coffee you drink at the showroom, the air con that you enjoy at the showroom, etc etc.

 

but interestingly, different dealers buy on different currency. C&C may buy in euros, while Wearnes may buy in Singapore dollars. and they may have different calculations built into the price.

 

also, you are comparing two very different classes of vehicles. one is a stylish runabout, the other is a sporty hatch with some promised performance.

 

it is marketing strategy to set them apart from the rest so that it keeps the exclusivity or/and prestige of owning a more special car. just look at the WRX for example. it was once a car that was special and reserved for a privileged few, now every mother's son can own one (almost).

 

if you even need to question why there's $xx,000 margin, then the car is probably not for you...

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PDK

PDK

Neutral Newbie

ADs have higher overhead costs like maintaining a nice spanking showroom, advertising expenses, training of technicians, keeping stock of parts and providing the warranty. So it all adds up to the need for a higher margin. If you really do the sums (and get a fright like you did), you'd probably won't buy a car. [laugh] But Singaporeans don't really bother to calculate how much the AD makes, just whether they can afford the price quoted in relation to their desire to own that car. If you were to calculate how much a PI or dealer that brings in used-imported cars make, then surely you too would avoid going to them considering that most of them don't have the high overheads the AD has. That's something for all to ponder.... :mellow:

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Bluecollar

Bluecollar

1st Gear

Give the chap a break guys.......it is not about affordability but how much premium are we willing to pay.

 

Was in PI looking at the E250 coupe offering $203888.00 with a OMV of 54k.

Pricing is about 37k profit for them while should be around 70k for C&C.

 

Question:-

Would you pay such premium for peace of mind? Or consider value of car when your itchy backside decides to change your ride in 4 years time. [:p]

 

No [knife] required..... how to get best of both worlds????????

BTW I am no financial guru, but if I am wrong your comment and feed back is most welcome [wave]

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Bluecollar

Bluecollar

1st Gear

ADs have higher overhead costs like maintaining a nice spanking showroom, advertising expenses, training of technicians, keeping stock of parts and providing the warranty. So it all adds up to the need for a higher margin. If you really do the sums (and get a fright like you did), you'd probably won't buy a car. [laugh] But Singaporeans don't really bother to calculate how much the AD makes, just whether they can afford the price quoted in relation to their desire to own that car. If you were to calculate how much a PI or dealer that brings in used-imported cars make, then surely you too would avoid going to them considering that most of them don't have the high overheads the AD has. That's something for all to ponder.... :mellow:

 

Hi PDK, some how I agree with you and having read some of your comments before.

You have owned some conti rides and know what to expect in terms of reliability and service.

 

Please understand and maybe TristanC like myself, is looking at our first conti and don't know what to expect.

I should speak for myself only, being in the comfort zone of a Jap make car; I know I won't go very wrong very far.

Basically I am more concern with reliability and consumption, of course many will also say about "worry about high consumption then don't drive a conti" talk. I think I have made my point before thus do not wish to elaborate.

 

BTW my mark-x is doing 9.5km/ltr which I think almost there with some of the merc owners.

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Bluecollar

Bluecollar

1st Gear

Sorry, did not mean to be rude or stupid.....but some guys here always pass those comments.

The bottomline is I can handle consumption of V6, then I can handle a turbo inline 4.

 

A matter of principals that I don't like to buy car with high consumption that is all.

I am not with any green peace btw... [laugh]

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