Main dealer charging more than RRP

HcksawJimDuggan

Hi Folks,

Just wondering if this is a fairly regular occurence. TV ad shows Ford Focus with RRP of , let's say, €20K. Local ford dealer quotes purchase price of €21,500. Now I know RRP is the recommended retail price and it is probably up to each individual dealer to decide what they want to charge but I just would have thought that Ford Ireland would fix the prices on new vehicles to ensure that ad's were an accurate reflection of what a new model would cost. Is the €1,500 an additional cost incurred by dealers? Or do local dealers just price higher in anticipation of some haggling?

Cheers,
Hcksaw

bazz26

Metallic paint and delivery related charges are normally not included in the RRT.

bucketybuck

Its a long time since I worked for a Ford dealer but I would imagine the dealer model still applies.

Basically the dealer will have bought that car from Ford, and as such it is theirs to re-sell at the price point they want. Manufacturers and dealers of course work closely in many aspects but the RRP is just that, a recommendation and if a dealer wished to sell the car for a higher price then they are free to do just that, and the customer is free to go to a different dealer and get it cheaper.

And of course, not all cars are equal and there may be differences in the spec that meant a higher price!

anewme

HcksawJimDuggan wrote: »

Now I know RRP is the recommended retail price and it is probably up to each individual dealer to decide what they want to charge but I just would have thought that Ford Ireland would fix the prices on new vehicles ......

Price fixing is illegal under anti competition law.

colm_mcm

It's not price fixing if it's a recommended retail price. Nobody pays the full retail either way.

Do apple price fix on iPhones?

anewme

colm_mcm wrote: »

It's not price fixing if it's a recommended retail price. Nobody pays the full retail either way.

Do apple price fix on iPhones?

I don't know anything about Prices of phones.

the Op's question is that while it is "probably" up to each dealer to set their own price

......but I just would have thought that Ford Ireland would fix the prices on new vehicles ......

Ford Ireland cannot fix the price

This would be price fixing, which is illegal and anti competitive.

myshirt

Is the dealer selling on consignment or have they bought a few cars?

colm_mcm

anewme wrote: »

I don't know anything about Prices of phones.

the Op's question is that while it is "probably" up to each dealer to set their own price

......but I just would have thought that Ford Ireland would fix the prices on new vehicles ......

Ford Ireland cannot fix the price

This would be price fixing, which is illegal and anti competitive.

So VW, who quote recommended on the road list prices are price fixing?

anewme

colm_mcm wrote: »

So VW, who quote recommended on the road list prices are price fixing?

All prices are recommended.

No car manufacturer can tell their dealers what to sell a car at.

To do so would be illegal.

There have been prosecutions in the past in the motor trade for price fixing and restricting fair trade.

anewme

Sorry, is a bit of a cut and paste job but you will get the jist of it. This is a uk site but EU law applies

Q
Is it possible for a supplier to dictate the price at which I can sell its goods?


A
The simple answer is no. UK and EU competition laws are clear that suppliers must not fix or set minimum resale prices with their retail customers. This is referred to as resale price maintenance and is illegal. In essence, retailers should be free to set prices at their absolute discretion.

“A supplier’s ability to dictate prices is extremely limited,” says Matthew Woodford, head of the EU and competition law team at law firm Browne Jacobson. “It’s very difficult to justify any agreement or understanding between a supplier and a retailer on resale prices.”

The most common exceptions to this general rule are that a supplier may recommend a resale price or set a maximum resale price.

However, care is always needed as a recommended or maximum resale price must not amount in reality to a fixed or minimum price. For example, if a supplier imposes sanctions such as lower discounts or reduced supplies on its retail customers that do not observe its recommended prices, then this will be considered as an act of resale price maintenance.

Retailers must ensure their employees exercise caution in all discussions with suppliers concerning resale prices. If a supplier seeks to impose resale prices, then the retailer must reject the attempt. “A failure to do so could be interpreted as an agreement to fix prices,” warns Woodford. The penalties for engaging in resale price maintenance are serious. The EU and UK regulators can impose fines of up to 10% of a company’s worldwide group turnover. Other consequences include damage to reputation and share price.

colm_mcm

anewme wrote: »

All prices are recommended.

No car manufacturer can tell their dealers what to sell a car at.

To do so would be illegal.

There have been prosecutions in the past in the motor trade for price fixing and restricting fair trade.

Telling the dealers what level of discount to give might be price fixing. Prosecutions in Ireland related to fixing the price of trade ins and level of discounts and were against a group of dealers rather than the distributor IIRC.

The text you quoted relates to minimum prices, not retail prices.

CeilingFly

For the OP the rrp always states that delivery and related costs are excluded.
Some think this is a scam, but the reasoning is that vrt is based on rrp, so this saves a small amount of money.

As for "price fixing" Yes, totally illegal, but most manufacturers of premium products whether they are cars or perfumes would have certain benefits and promotions available to retailers and adhering to "protection of the brand" can be a condition of getting those benefits.

anewme

colm_mcm wrote: »

Telling the dealers what level of discount to give might be price fixing. Prosecutions in Ireland related to fixing the price of trade ins and level of discounts and were against a group of dealers rather than the distributor IIRC.

The text you quoted relates to minimum prices, not retail prices.

The bottom line is.......a supplier cannot fix prices for new vehicles, only issue RRP.

There have been a number of cases, yes, they were Dealers but among their convictions were convicted of fixing prices on new cars.

The same law applies to manufacturers.

They cannot fix prices on new cars either directly or indirectly.

Case here below and judgement also

http://ccpc.ie/enforcement-mergers-civil-competition-enforcement-cases/members-citroën-dealers-association-cartel

Sorry op, not much help to you, but was clarifying that Ford Ireland or any manufacturer cannot and would not fix prices of their vehicles.

colm_mcm

Citroen dealer association was a group of dealers and wasn't related to Citroen Ireland. this was for fixing trade in prices and new car discounts in advance to thwart efforts by customers in the Leinster area to shop around for a deal on trading up to newer Citroens, or to negotiate a good discount on a new car. That's price fixing alright.

Toyota Ireland saying a new Rav4 RRP is €35k on-the-road before discounts isn't price fixing. 10 dealers agreeing between themselves in advance not to let one out the door for less than €33k and to agreeing to all offer €20k for 151 reg Avensis 2.0d Stratas and 19k for Terra models is price fixing.

anewme

colm_mcm wrote: »

Citroen dealer association was a group of dealers and wasn't related to Citroen Ireland. this was for fixing trade in prices and new car discounts in advance to thwart efforts by customers in the Leinster area to shop around for a deal on trading up to newer Citroens, or to negotiate a good discount on a new car. That's price fixing alright.

Toyota Ireland saying a new Rav4 RRP is €35k on-the-road before discounts isn't price fixing. 10 dealers agreeing between themselves in advance not to let one out the door for less than €33k and to agreeing to all offer €20k for 151 reg Avensis 2.0d Stratas and 19k for Terra models is price fixing.

They are different scenarios. One is legal the other is not. RRP is legal, fixing prices is not.

Toyota Ireland saying the RRP of a new RAV4 RRP is 35k is a totally different scenario than the ops question that he would have thought Ford Ireland fix the price of their vehicles.

colm_mcm

I give up...

anewme

Ok so, does not change the answer to the OP

HcksawJimDuggan wrote: »

but I just would have thought that Ford Ireland would fix the prices on new vehicles ..../QUOTE]

No, this would be price fixing and illegal

bmwguy

Price fixing relates to collusion with your competitors.

Main dealer A in competition with main dealer B in Dublin get together and agree to not supply a Ford Focus for less than 22k and they share the market and profits.

Don't see any evidence of that here.

anewme

bmwguy wrote: »

Price fixing relates to collusion with your competitors.

Main dealer A in competition with main dealer B in Dublin get together and agree to not supply a Ford Focus for less than 22k and they share the market and profits.

Don't see any evidence of that here.

Price fixing does not just apply to dealers.

Is the question from the op not that he would have thought the manufacturer fixed the selling price of cars?

bmwguy

anewme wrote: »

Price fixing does not just apply to dealers.

Is the question from the op not that he thought ford Ireland fixed the selling price of cars?

Ford Ireland supply dealer network with cars. They charge a certain amount to the dealers.
Dealers sell to public. They charge what they can get. I can go to any of the Ford dealers in Ireland and get best price I can.

No price fixing here. Price fixing relates to an illegal anti-competition practice.

anewme

bmwguy wrote: »

Ford Ireland supply dealer network with cars. They charge a certain amount to the dealers.
Dealers sell to public. They charge what they can get. I can go to any of the Ford dealers in Ireland and get best price I can.

No price fixing here. Price fixing relates to an illegal anti-competition practice.

Exactly.

You are missing the point.

The question from the op is: I would have thought ford Ireland fixed the prices on new cars.....

The answer is no, they can't do that, to do that would be anti competitive and illegal. (I.e. The dealer can sell for what they want)

Hence, you can go to any dealer and get the best price you can get.

The op is free to shop around as the price will not be the same in every dealer. That is the answer to the question that is he price is set by the manufacturer. It isn't. As in this case.

colm_mcm

What's happened here is you've homed in on the word "fix" and completely missed the point after that while quoting sources that contradict what you're trying to sell as fact.

bucketybuck

colm_mcm wrote: »

What's happened here is you've homed in on the word "fix" and completely missed the point after that while quoting sources that contradict what you're trying to sell as fact.

I honestly don't see what the argument is here, everything he said is correct, manufacturers stating a RRP is not price fixing, dealers can sell at a price higher than the RRP and it won't be price fixing, the OP asked if his example was price fixing and the answer is no, so what is the issue?

anewme

bucketybuck wrote: »

I honestly don't see what the argument is here, everything he said is correct, manufacturers stating a RRP is not price fixing, dealers can sell at a price higher than the RRP and it won't be price fixing, the OP asked if his example was price fixing and the answer is no, so what is the issue?

The question asked by the OP is

. Now I know RRP is the recommended retail price and it is probably up to each individual dealer to decide what they want to charge but I just would have thought that Ford Ireland would fix the prices on new vehicles .....

He states while it is probably Up to the dealer to decide what they want to charge......he would have thought ford fixed the prices.

That's the question asked...

You agree with everything the OP says...i don't agree that this bit
.

but I just would have thought that Ford Ireland would fix the prices on new vehicles

Is Right at all.

JigglyMcJabs

colm_mcm wrote: »

What's happened here is you've homed in on the word "fix" and completely missed the point after that while quoting sources that contradict what you're trying to sell as fact.

Thought you were giving up?

https://www.retail-week.com/analysis/retail-surgery/can-suppliers-dictate-retail-prices/5028502.article

anewme

JigglyMcJabs wrote: »

Thought you were giving up?

No I'm giving up at this stage

Happy new car OP!

bucketybuck

anewme wrote: »

He states while it is probably Up to the dealer to decide what they want to charge......he would have thought ford fixed the prices.

That's the question asked...

But it can't be both, either the dealer decides or Ford fixes the prices. And it isn't both, Ford recommend a price but it's the dealers decision.

You agree with everything the OP says...i don't agree that this bit
.

but I just would have thought that Ford Ireland would fix the prices on new vehicles

Is Right at all.

I don't agree with the OP at all and that bit isn't right, Ford do not fix the prices.