Dealers Forsake Margins As They Pursue Car Sales
The Age
Tuesday December 9, 2008
CAR dealers are making as little as $1 profit on each car they sell as they try to lure buyers and clear stock.
Several dealers contacted by The Age yesterday had noticed a jump in the number of buyers visiting showrooms last weekend, with most keen to claim a new-car bargain before January 1 price rises.Car sales have weakened recently, falling 22.2 per cent in November and 11.4 per cent in October. December is traditionally a slower month, while January marks the time when many dealerships start their first cycle of discounting for the year.However, some yards are selling cars any way they can.A Canberra-based Ford dealership last weekend was selling the Falcon for $1 more than the dealer's cost to get the car into the showroom.Bryan Lockwood, a sales consultant at Belconnen-based John McGrath Ford, said this saved some customers about $9500 on the list price of a $46,990 Falcon G6E, making it cheaper than even a list price base-model XT.Mr Lockwood said the cheap Falcon offer, which ended on the weekend, had drawn bargain-hunters through his dealership's doors as expected.He said the sale had also cleared the dealer's stocks of unsold Falcons that dated back to the first half of the year.Ford is believed to have about 4000 unsold Falcons languishing in the no-man's land between its Broadmeadows factory and showrooms. Some Ford dealers are even offering $2000 worth of free fuel with some already heavily discounted cars.Toyota, meanwhile, has said it is trying to clear about 40,000 cars. One Melbourne dealership is offering drive-away pricing on a V6-powered Aurion AT-X family car that is normally priced from $34,990, shedding more than $4000.A spokeswoman for Holden said recent sales campaigns had reduced its stock of unsold cars down to "a manageable level". Some Holden dealers are offering a mid-specification Commodore SV6, which normally costs from $40,790, at more than $6000 off the showroom price, making it cheaper than the factory recommended price for a base-model Omega.Santo Amoddio, managing director of vehicle price-watch index Glass's Guide, said anyone buying a new car now should plan on owning it for at least three years to get the most return for their money."Cars lose most of their value ... in the first year or two, so to sell it in the short term is not very good," Mr Amoddio said. "Three years-plus is the ideal time to hang on to a car."CHEAP WHEELS WHATS ON OFFER - Base-model cars equipped with options including Bluetooth, leather, alloy wheels and DVD players and sold at discounted driveaway prices - Years of free servicing and petrol vouchers - Interest-free finance periods - Demonstrator models with big discounts over retail prices - Discounted drive-away prices and/or factory rebates sweeten the deal - The bigger the car, the larger the discount
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