In an article published by The Daily Upside, titled, “Ford, GM Threaten Car Dealerships That are Jacking Up Prices,” the author describes an ongoing dispute between auto manufacturers – mainly Ford and General Motors (GM) – and car dealerships as it relates to exorbitant car prices. As supply chain issues and inflation continue to affect consumers for day-to-day purchases, larger purchases, such as buying a new car, have seen the impact as well.
A few key takeaways:
- Ford and GM are threatening to halt sales to dealers due to prices that are far above the manufacturers suggested retail price
- 80% of car buyers in January 2022 paid above suggested retail prices, up from only 2.8% in January 2021, and .3% in January 2020
- Markups on certain popular makes and models saw an increase far and above away from the average car buyer, which on average paid $728 more than retail in January 2022, with Hyundai and Honda cars selling on average $1,863 and $1,523 above suggested retail prices during the same time period
- Largely due to supply chain issues, like microchip shortages, only 15 million vehicles were sold in the US in 2021, a slight increase from 14.6 million sold in 2020
All in all, the auto manufacturers are decidedly hesitant to continue providing vehicles to dealers that are charging consumers a premium. While manufacturers are typically required to sell vehicles through the traditional dealership model, the introduction of electric vehicles have opened up a discussion around this practice.
Nicknamed the “Tesla bill,” which Vermont passed into law in 2021, the act allows certain electric vehicle manufacturers to sell and service their vehicles directly by the company, rather than through third-party dealers. As a result, many states are evaluating similar legislation which could potentially allow manufacturers to sell directly through their own dealerships for specifically electric vehicle models.
Continue reading the full article here: https://www.thedailyupside.com/ford-gm-threaten-car-dealerships-that-are-jacking-up-prices/
Source:
1. An act relating to motor vehicle manufacturers, dealers, and warranty or service facilities, Vermont Act No. 63 (S.47)
(2021). https://legislature.vermont.gov/bill/status/2022/S.47.
2. Lambert, Fred. “Tesla Asks Fanbase to Support Push to Allow Direct Sales in New York.” Electrek, Jan. 2022.
https://electrek.co/2022/01/10/tesla-asks-fanbase-support-push-allow-direct-sales-new-york/.
