Discounting Across Europe - The New Norm

who_ru

fairly unbelievable stuff going on in France by Hyundai. What's next 'buy none get one free'?

Read on...

http://www.rte.ie/news/special-reports/2013/0715/462607-hyundai-france/

colm_mcm

Read that earlier alright!

One of the few sites I can look at in work

Big Nasty

Great idea IMO.

Massive discounting devalues a brand (look at what Bill Cullen did to Renault) while this option increases sales two fold without giving any 'discount'.

Ok, realistically you're getting a 25% discount on the combined price of two cars but it's not sold that way. The 53xi still cost €30k and the mini yolk was 'free'.

Anan1

MCMLXXV wrote: »

Great idea IMO.

Massive discounting devalues a brand (look at what Bill Cullen did to Renault) while this option increases sales two fold without giving any 'discount'.

Ok, realistically you're getting a 25% discount on the combined price of two cars but it's not sold that way. The 53xi still cost €30k and the mini yolk was 'free'.

I don't think so. Try selling the bigger one on its own the day after registering it and you'll find that it has devalued by more than the value of the smaller one.

Wexfordian

Wonder does the garage have to pay VRT on the free one?

Big Nasty

Anan1 wrote: »

I don't think so. Try selling the bigger one on its own the day after registering it and you'll find that it has devalued by more than the value of the smaller one.

It still hasn't devalued any more than if it was bought on it's own at €30k.

Anan1

Wexfordian wrote: »

Wonder does the garage have to pay VRT on the free one?

It's not free, it's not even €1.

Anan1

MCMLXXV wrote: »

It still hasn't devalued any more than if it was bought on it's own at €30k.

Of course it has. The second car has value, and now both can be bought for €30k. This means that the bigger one is on offer for €30k less the value of the little one.

Big Nasty

You're missing my point.

Scenario One:

Car A is priced @ €30k
Car B is priced @ €10k

Combined price = €40k
Discounted price = €30k
Discount = 25%

Car A is sold @ €22.5k
Car B is sold @ €7.5k

Scenario 2

Car A is priced @ €30k
Car B is priced @ €10k

Combined price = €40k
Discounted price = €30k
Discount = 25%

Car A is sold @ €30k
Car B which has a 'value' of €10 is free (or €1 or whatever)

In the first scenario Car A is devalued by €7.5k before it's driven off the forecourt and Car B is devalued by €2.5k. In the second scenario Car A's 'value' is still €30k before it is driven off the forecourt, same as Car B's 'value' is still €10k.

It enables the manufacturer to sell more cars without devaluing their portfolio by 25%. Can you not see this?

Anan1

A car's value is not made up by the manufacturer, it is the price that someone is prepared to pay for it. Car B is worth a lot more than €1, so scenario 2 does not exist. Scenario 1 (or close enough) is what's actually happening, the rest is just marketing.

Big Nasty

Anan1 wrote: »

A car's value is not made up by the manufacturer, it is the price that someone is prepared to pay for it. Car B is worth a lot more than €1, so scenario 2 does not exist.

I'm talking about the perceived value by the consumer.

Let me put it another way then:

This offer obviously won't last forever, right? If they discount the price of a €30k car to €22.5k once the offer ends nobody's gonna want to pay €30k for the car again. The way they are doing it The iX35 was never sold for less than €30k so when the offer ends it, as a stand alone car, is no more expensive than while the offer was running - you just don't get your €10k mini for free with it anymore.

colm_mcm

Just as well the guy bought it because himself and his lady wanted new cars. Its a cracking deal by anyone's reasoning and i don't think he'd be too bothered by the mathematics above

Anan1

MCMLXXV wrote: »

so when the offer ends it, as a stand alone car, is no more expensive than while the offer was running - you just don't get your €10k mini for free with it anymore.

Which makes it more expensive by the value of the little car! If you want a new ix35 in France now then you buy it, sell the little one and €30k less what you get for the little one is the price you pay. The ix35 now costs €23k ish, not €30k. It doesn't matter if it's cash back, a subsidised second car, 0% finance, or free petrol - the car is being discounted by the value of the 'freebie'.

Renegade Mechanic

I can personally guarantee all of you that this will never, ever happen here.

Big Nasty

Anan1 wrote: »

Which makes it more expensive by the value of the little car! If you want a new ix35 in France now then you buy it, sell the little one and €30k less what you get for the little one is the price you pay. The ix35 now costs €23k ish, not €30k. It doesn't matter if it's cash back, a subsidised second car, 0% finance, or free petrol - the car is being discounted by the value of the 'freebie'.

Technically you're right of course but they way they are selling it means that if you buy the €30k car now you get a 'free' €10k car along with it. Surely you can see that this is a better move than selling both cars at €22.5k and €7.5k respectively?

colm_mcm

Renegade Mechanic wrote: »

I can personally guarantee all of you that this will never, ever happen here.

I could have given you a free aygo in 08 with the discounts on petrol avensis's vs list price

Nissan could have given a free primera if you bought a pasenger patrol at list price in the month before new emissions regulations came into force.

Tigger

MCMLXXV wrote: »

Technically you're right of course but they way they are selling it means that if you buy the €30k car now you get a 'free' €10k car along with it. Surely you can see that this is a better move than selling both cars at €22.5k and €7.5k respectively?

+1
its called upselling; you never devalue your brand you add value
if a car was 20k and it wasn't selling then add alloys, metallic, cd etc etc
customers get number fixation so if you sell one at 15k instead of 20k then thats the price.

also get cars on roads that will need servicing parts etc and will build brand loyalty

colm_mcm

Hyundai have 9% market share in Ireland this year. Its share in France is 1.5%.
French people are pretty patriotic about cars so hyundai need to get the cars out there.
They've gone from selling discounted cars in this country to selling at the same price as ford/opel etc here.

Seaneh

Wexfordian wrote: »

Wonder does the garage have to pay VRT on the free one?

Is there vrt in France?

Big Nasty

colm_mcm wrote: »

They've gone from selling discounted cars in this country to selling at the same price as ford/opel etc here.

That said Hyundai & Kia seem to be making a considerable dent in Toyota's sales.

colm_mcm

Seaneh wrote: »

Is there vrt in France?

Yes


CO2 emission, g/km Malus (extra tax)
0-135 0
136-140 €100
141-145 €300
146-150 €400
151-155 €1000
156-175 €1500
176-180 €2000
181-185 €2600
186-190 €3000
191-200 €5000
201 and more €6000

They also have rebates for less polluting vehicles

CO2 emission, g/km Bonus (tax refund)
0-20 *) €7000
21-50 €5000
51-60 €4500
61-90 €550
91-105 €200
106 or more 0

Wexfordian

There is brutal vrt in Denmark (I know we are talking France, but just saw the figures),

"The tax is 105% of the first €8000,- (ca.) and 180% of the rest. The tax is calculated after the VAT (25%), so it's also double taxing." (Wiki)

gctest50

Wexfordian wrote: »

There is brutal vrt in Denmark ___

Its what led the way to grey imports - manufaturers sold products cheaper to distributors in countries with high "vrt" ?

Anan1

MCMLXXV wrote: »

Technically you're right of course but they way they are selling it means that if you buy the €30k car now you get a 'free' €10k car along with it. Surely you can see that this is a better move than selling both cars at €22.5k and €7.5k respectively?

If the customer actually wants both cars then it's the same thing. If they only want one car or the other then selling them at €22.5k and €7.5k respectively would be better for the customer.

Big Nasty

Anan1 wrote: »

If the customer actually wants both cars then it's the same thing. If they only want one car or the other then selling them at €22.5k and €7.5k respectively would be better for the customer.

But they're not selling them that way and we're talking about what's best for the manufacturer here not the customer.