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    VWVortex


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    Type: Posts; User: Travis Grundke

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    1. zhenya00 - We're not talking $699...

      zhenya00 -

      We're not talking $699 iPhones/iPads that can be stored in warehouses on pallets, we're talking a product with an average selling price of $30,000 that weighs 2 tons.

      Cars are not...
    2. Again, I'm not disagreeing with anyone who says...

      Again, I'm not disagreeing with anyone who says that the protections afforded the dealership networks is outrageous. What I am arguing is that it may not be terribly advantageous to the automakers...
    3. Not disagreeing with that one bit. The legal...

      Not disagreeing with that one bit. The legal protection granted to the dealership lobby is outrageous.

      The point I'm disagreeing with is those who argue that a direct sales model will lead to...
    4. zhenya - as I said, scale isn't the problem here....

      zhenya - as I said, scale isn't the problem here. You can wring out lots of efficiencies as you mentioned, but the dealership model works as a force multiplier for the automakers, running their own...
    5. Don't disagree with the premise at all, but the...

      Don't disagree with the premise at all, but the issue here is not scale. The problem for the automakers is having so much working capital tied up in fixed assets. Instead of offloading the...
    6. I'm quoting Brendan's comment about because it's...

      I'm quoting Brendan's comment about because it's so important to understanding the economics of the business.
    7. Factory outlets model is entirely different, and...

      Factory outlets model is entirely different, and many companies that have "factory outlet stores" are actually franchises that are given preferential treatment for overstock, overrun, mislabeled,...
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      Where are you getting this price? If true, that's...

      Where are you getting this price? If true, that's outstanding.
    9. Bingo. No different from house prices in a...

      Bingo. No different from house prices in a popular area where the real players will need to bid over-asking price. Saw this all the time when I sold cars 15 years ago: if you wanted a silver new...
    10. The assumption here is that the manufacturer...

      The assumption here is that the manufacturer wouldn't charge a premium. Perhaps they won't, but again: a direct model makes no guarantees on pricing, whether it is franchised or factory owned.
    11. What scale are you referring to, zhenya00? The...

      What scale are you referring to, zhenya00? The manufacturers would start carrying *immense* overhead were they the owners of the dealership network. Right now all of that liability is pushed off to...
    12. Exactly. The only reason the model still thrives...

      Exactly. The only reason the model still thrives today is due to government protection in the form of state franchise laws. It would be the equivalent of preventing any manufacturer from selling...
    13. Prices will stay the same. The question that...

      Prices will stay the same. The question that automakers have to ask is: what about margins? Right now, the automaker builds the car, allocates it to a dealership who purchases said car - and then...
    14. The direct sales model will work if, and only if,...

      The direct sales model will work if, and only if, you are selling a high demand product in an outstanding environment that draws people in. In other words: you need to have a fantastic experience...
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      Which, with sales tax takes you to around...

      Which, with sales tax takes you to around $670/mo, unless you pay all of the sales tax up front in CA.
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      I'm the last person to defend VoA, but the only...

      I'm the last person to defend VoA, but the only people who are truly frustrated with the Golf/GTI launch are two groups: enthusiasts who have followed this with bated breath for months, and dealers...
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      People I've spoken with have all been in the $700...

      People I've spoken with have all been in the $700 range.

      If you're looking to lease, you really better like this car because there are a *lot* of options out there at this price point.
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      Making a WAG (wild-assed-guess) based on VW's...

      Making a WAG (wild-assed-guess) based on VW's very methodical rollout (Jan-Mar ramp, Apr-Jun volume production, Jul-Sept 2-door and standard Golf volume production, Oct-Dec PerfPack intro), I'd guess...
    19. Which once again proves the oft quoted 'vortex...

      Which once again proves the oft quoted 'vortex adage: dealerships don't know squat.

      On the MK7 launch weekend I had two dealerships tell me that the lighting package was included as part of a...
    20. Good point, but the issue isn't necessarily the...

      Good point, but the issue isn't necessarily the price of a car so much as the cost of car ownership, along with the relative increase in cost for so many other of life's staples. Combine that with...
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