Vfacts For December

[GTP290]

I was talking to a Ford dealer and hes as frustrated as hell because Ford wont let them discount the Falcon (37k+) for an FG XT model, whereas Holden are selling VEs with leather, alloys bluetooth for 30k driveaway, SSs for 40k driveaway and HSV R8s for 50k.
He reckons the logic in that is because Ford are cleaning up with motoring reviews and awards so the public know its a better car than the Holden,therefore hes been instructed not to discount!
Having said that though you can buy a demo BF mk2 for 22k driveaway, which is an absolute bargain!

[Auslandau]

Originally Posted by ckugler

Thats a joke isnt it? The last 4 Fords I have bought, I go home and check the car to make sure no bits are missing, that everthing works, that there are no marks or scratches etc, etc, and in every case there has been an issue.............. !

Sounds like you should move to a better neighborhood?



I don't know why people are so hooked up in numbers, as RATT and a few others have pointed out.

When companies (Holden) become fixated at being number 1 (2) in sales but loose the reason WHY they are in buisness is the reason they go broke! If Holden want to discount themselves into oblivion, good luck to em ....... at least they will go out as the second biggest!

Sell 10 items at $10 = $100
Cost $8 = Profit $2 ........ Total profit $20

Sell 10 items at $9 = $90
Cost $8 = Profit $1 ........ Total profit $10

Now ..... IF you are in buisness ...... What would YOU love to do?
1: Sell 10 items at $10 (Total Sales = $100) OR discount 10% to sell nearly twice the amount!
2: Sell 18 items at $9 (Total Sales = $162) : Wow Business is booming

I know this is simple stuff but some just cant get there head around it!



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[RATT]

Originally Posted by vztrt

Thanks Ratt, any chance we can get Mazda, Toyota & Nissan?

Mazda 07 v 08

Mazda BT-50 4X2 254 401
Mazda BT-50 4X4 393 448
Mazda CX-7 359 379
Mazda CX-9 311 260
Mazda MX5 33 84
Mazda RX8 39 13
Mazda2 1,413 1,201
Mazda3 3,078 2,584
Mazda6 761 1,061
Mazda Total 6,641 6,442

Nissan

Nissan 350Z 21 49
Nissan Dualis 98 118
Nissan Maxima 42 114
Nissan Micra 518 212
Nissan Murano 67 152
Nissan Navara 4X2 181 73
Nissan Navara 4X4 1,392 1,090
Nissan Pathfinder 92 256
Nissan Patrol PU/CC 179 235
Nissan Patrol Wagon 251 360
Nissan Tiida 782 1,116
Nissan X-Trail 606 929
Nissan Total 4,229 4,704

Toyota

Toyota Aurion 1,740 1,751
Toyota Avensis 58 107
Toyota Camry (4 cyl) 1,941 2,685
Toyota Coaster 20 29
Toyota Corolla 4,160 4,111
Toyota Hiace Bus 176 153 3
Toyota Hiace Van 512 595
Toyota Hilux 4X2 1,247 1,368
Toyota Hilux 4X4 1,933 1,888
Toyota Kluger 1,198 947
Toyota Landcruiser PU/CC 418 404
Toyota Landcruiser Wagon 633 1,296
Toyota Prado 1,137 979
Toyota Prius 232 255
Toyota RAV4 1,297 1,279
Toyota Tarago 117 414
Toyota Yaris 2,180 2,352
Toyota Total 18,999 20,613

[imugli]

Those numbers for the Mazda 2 and 3 are unbelievable. Correct me if I'm wrong but Mazda don't do fleet sale discounts on their cars, meaning the majority are private buyers? Have those cars hit the sweet spot or what?

[vztrt]

Originally Posted by imugli

Those numbers for the Mazda 2 and 3 are unbelievable. Correct me if I'm wrong but Mazda don't do fleet sale discounts on their cars, meaning the majority are private buyers? Have those cars hit the sweet spot or what?

They have been selling well but I remember Mazda making a 1 million doller loss in the 3rd qtr last year.

[4Vman]

Originally Posted by auslandau

Sounds like you should move to a better neighborhood?



I don't know why people are so hooked up in numbers, as RATT and a few others have pointed out.

When companies (Holden) become fixated at being number 1 (2) in sales but loose the reason WHY they are in buisness is the reason they go broke! If Holden want to discount themselves into oblivion, good luck to em ....... at least they will go out as the second biggest!

Sell 10 items at $10 = $100
Cost $8 = Profit $2 ........ Total profit $20

Sell 10 items at $9 = $90
Cost $8 = Profit $1 ........ Total profit $10

Now ..... IF you are in buisness ...... What would YOU love to do?
1: Sell 10 items at $10 (Total Sales = $100) OR discount 10% to sell nearly twice the amount!
2: Sell 18 items at $9 (Total Sales = $162) : Wow Business is booming

I know this is simple stuff but some just cant get there head around it!

Yep.. it really isnt that difficult to grasp..

[buggerlugs]

There is another article on Cars Guide I think where the head of Holden has denied the massive discounts on the commodore in December were to make sure they outsold the Corolla for the year...............

[Bossxr8]

Originally Posted by buggerlugs

There is another article on Cars Guide I think where the head of Holden has denied the massive discounts on the commodore in December were to make sure they outsold the Corolla for the year...............

Holdens Go Better (using smoke and mirrors).

[Fev]

Originally Posted by GTP290

I was talking to a Ford dealer and hes as frustrated as hell because Ford wont let them discount the Falcon (37k+) for an FG XT model, whereas Holden are selling VEs with leather, alloys bluetooth for 30k driveaway, SSs for 40k driveaway and HSV R8s for 50k.
He reckons the logic in that is because Ford are cleaning up with motoring reviews and awards so the public know its a better car than the Holden,therefore hes been instructed not to discount!
Having said that though you can buy a demo BF mk2 for 22k driveaway, which is an absolute bargain!

i was seeing ad's on TV for Fords in melbourne 2 weeks ago selling brand new BF MKII XT's with SR kit, 17's for $17,990 (may have been $18,990)

and the base focus' were advertised for 19,000

if that aint a discount i dunno what is!

[imugli]

Focus is in runout and BFII is the old model.
We're talking about brand new dunnydores loaded with extra's being thrown out at 25% off...

[Fev]

oh, sorry - still, those prices are nuts - i paid 15k for my ba which was 3 years old at the time..

[peachey80]

Originally Posted by GTP290

I was talking to a Ford dealer and hes as frustrated as hell because Ford wont let them discount the Falcon (37k+) for an FG XT model, whereas Holden are selling VEs with leather, alloys bluetooth for 30k driveaway, SSs for 40k driveaway and HSV R8s for 50k.
He reckons the logic in that is because Ford are cleaning up with motoring reviews and awards so the public know its a better car than the Holden,therefore hes been instructed not to discount!
Having said that though you can buy a demo BF mk2 for 22k driveaway, which is an absolute bargain!

I can buy a brand new FG XT for 32k down here in Tassie, drive away......

[Bud Bud]

Originally Posted by auslandau

Now ..... IF you are in buisness ...... What would YOU love to do?
1: Sell 10 items at $10 (Total Sales = $100) OR discount 10% to sell nearly twice the amount!
2: Sell 18 items at $9 (Total Sales = $162) :

Mmmm $100 or $162 mate that is a hard one. What would you take?
This is actually how retail works.

[Wally]

Originally Posted by auslandau

Sounds like you should move to a better neighborhood?



I don't know why people are so hooked up in numbers, as RATT and a few others have pointed out.

When companies (Holden) become fixated at being number 1 (2) in sales but loose the reason WHY they are in buisness is the reason they go broke! If Holden want to discount themselves into oblivion, good luck to em ....... at least they will go out as the second biggest!

Sell 10 items at $10 = $100
Cost $8 = Profit $2 ........ Total profit $20

Sell 10 items at $9 = $90
Cost $8 = Profit $1 ........ Total profit $10

Now ..... IF you are in buisness ...... What would YOU love to do?
1: Sell 10 items at $10 (Total Sales = $100) OR discount 10% to sell nearly twice the amount!
2: Sell 18 items at $9 (Total Sales = $162) : Wow Business is booming

I know this is simple stuff but some just cant get there head around it!

Well the nature of mass marketing is low EBIT high turnover. While the Chicago school of business managed to foist the "niche" marketing principle on the business community in the 80s, it is the mass marketers that have survived. I often wonder if the high yield low turnover idea was dreamed up by the larger companies to dilute direct competition.

The simple economics of the situation is that managers will try to keep a business alive in preparation for increased consumer confidence. A $10 profit is much better than no profit; at 10% margin it is also better than paying bank interest of, say, 7% (the general rule of thumb is to make more EBIT than loan cost).

The fundamental problem facing the automakers is lender confidence is low, not so much because the borower's business model is flawed, but because the lenders aren't confident their own balance sheets are accurate, especially with unregulated futures exposure and projected 10% unemployment.

The truth is that nearly every business will lower it's margins over the next 12 months to survive. We should see a changing of the guard and big shifts in wealth revenues. e.g water mitigation, etc. , but holden cars will still be there for the long haul.

[4Vman]

Originally Posted by Bud Bud

Mmmm $100 or $162 mate that is a hard one. What would you take?
This is actually how retail works.

except you totally missed the profit margin...
@ $10 ea he made $2 profit.. @ $9 ea he made a $1 profit.. so if he sold 10 @ $10 ea he made $20 clear total profit and selling 18 @ $9 ea he made $18 clear total profit...

So which is better??

[lowriding]

you people are crazy if you have concluded last month was somehow a good one for Ford and bad for Holden? :.Last month was a disgrace for Ford Aus moreso that they are leading with fresh product against a 2 year old+ product of their competitor.almost as bad as some of the dinky business modelling i've seen in this thread ! I can guarantee the corks would have been popping over in holdens network last month 1/ the idea of brand loyalty these day is almost extinct , its an extremely competitive industry you fight for virtually every sale hence the decling market ford and holden have today 2/ Holden sold bulk cars last month because of serious discounts ,but they still made a profit ,on each car sold guaranteed,however slim the margin ! :togo:
All things being equal ,if your in the car selling industry your much better off selling cars than not selling them . Fords strategy of just giving up trying to sell cars and simply scaling back production mid year has backfired on themselves badly.If ford were afraid of overstocking then Holden have shown them they should have backed themselves ,got aggressive built the cars and moved units ,the Vfacts numbers tell the story.For all those 1000's of extra cars Holden sold last month all found homes to private buyers as discounts were not applicable to fleet .Big plus . Not only that but how much cream would have been made upselling options at full RRP - mats ,leather trims ,visors,leather and paint protection,wings,tints the options list is endless and very profitable ! Not only that most will take their shiny new cars back to the dealer network for the next few years to be serviced ,which strongly benefits the dealers as it's the magic trailing cashflow business and exposes the customer to all subsequent new model releases and updates,making your next job easier again.
Selling cars is about getting that exposure and traffic into the showrooms . for example there would have been people going in to buy a $34k ss ute but once there drove away in a ssv ute .
Fords current idea scaling back production and just sitting around patting themselves on the back is a absolute,sure fire recipe of disaster in the making as they are not Porsche, they are not a low volume high margin manufacturer.

regards

[irlewy86]

Remeber GMH is an American subsidary therfore work on a US finacial year Jan-Dec. For the first 6 months they would have been making money hand over fist as it looked to be the biggest year on record. The backside fell out of the market and they were left with too much stock. Discount it and sell it would have been the call from Detroit so it runs on the leanest amount of stock for '09' (which will probably be similar to 03). If worse comes to worse for GM they have a subsidary that has the least overheads or future costs (thanks to the canning of the Zeta platform) and minimal unsold stock. This way they'll get the highest price for Holden if they need to dump a brand or two.

[4Vman]

Originally Posted by lowriding

you people are crazy if you have concluded last month was somehow a good one for Ford and bad for Holden? :.Last month was a disgrace for Ford Aus moreso that they are leading with fresh product against a 2 year old+ product of their competitor.almost as bad as some of the dinky business modelling i've seen in this thread ! I can guarantee the corks would have been popping over in holdens network last month 1/ the idea of brand loyalty these day is almost extinct , its an extremely competitive industry you fight for virtually every sale hence the decling market ford and holden have today 2/ Holden sold bulk cars last month because of serious discounts ,but they still made a profit ,on each car sold guaranteed,however slim the margin ! :togo:
All things being equal ,if your in the car selling industry your much better off selling cars than not selling them . Fords strategy of just giving up trying to sell cars and simply scaling back production mid year has backfired on themselves badly.If ford were afraid of overstocking then Holden have shown them they should have backed themselves ,got aggressive built the cars and moved units ,the Vfacts numbers tell the story.For all those 1000's of extra cars Holden sold last month all found homes to private buyers as discounts were not applicable to fleet .Big plus . Not only that but how much cream would have been made upselling options at full RRP - mats ,leather trims ,visors,leather and paint protection,wings,tints the options list is endless and very profitable ! Not only that most will take their shiny new cars back to the dealer network for the next few years to be serviced ,which strongly benefits the dealers as it's the magic trailing cashflow business and exposes the customer to all subsequent new model releases and updates,making your next job easier again.
Selling cars is about getting that exposure and traffic into the showrooms . for example there would have been people going in to buy a $34k ss ute but once there drove away in a ssv ute .
Fords current idea scaling back production and just sitting around patting themselves on the back is a absolute,sure fire recipe of disaster in the making as they are not Porsche, they are not a low volume high margin manufacturer.

regards

Nobody is saying Ford is happy, you've totally failed to grasp the concept of profit v turnover.
You don't know holden made a profit do you? they havent made a profit for years and that's before the heavy discounting... you don't need to be Einstein to see where that's leading.
READ what people have written, discounting below cost is a very good way to ensure you're not around too long if you cant make up the financial deficit shortly after.... You can't service cars with a dealership network that no longer exists.

[lowriding]

4Vman what business / line of work do you do ?

regards

[4Vman]

Originally Posted by lowriding

4Vman what business / line of work do you do ?

regards

Im in the business of making a profit..... by focusing on quality and service which de focuses price, so you DON'T have to discount.

[irlewy86]

Originally Posted by 4Vman

Im in the business of making a profit..... by focusing on quality and service which de focuses price, so you DON'T have to discount.

Holden are in the business of scale ecconomies, they'd rather sell 5,000 cars with a heavy discount than 2500 cars at list price.

[4Vman]

Originally Posted by irlewy86

Holden are in the business of scale ecconomies, they'd rather sell 5,000 cars with a heavy discount than 2500 cars at list price.

Even if that discount sent them into a loss position V a profit at the reduced volume? NEVER.
Why do you think car companies down scale rather than just keep pumping out cars and discounting?
Simple... to remain profitable, to find a position of "equilibrium" where they can remain profitable at the reduced volume.

[irlewy86]

Originally Posted by 4Vman

Even if that discount sent them into a loss position V a profit at the reduced volume? NEVER.
Why do you think car companies down scale rather than just keep pumping out cars and discounting?

Sales margins are never great anyway, parts and service have the biggest mark up. The more units you put in the field the healthier you'll be in the long run. Yes you do have to turn a profit somewhere, but an extra 2000 VE's in the field means an extra 16,000 spark plugs, 8000 tyres, 2000 oil filters, 10,000 litres of oil and so on that Holden could sell next year.

[4Vman]

Originally Posted by irlewy86

Sales margins are never great anyway, parts and service have the biggest mark up. The more units you put in the field the healthier you'll be in the long run. Yes you do have to turn a profit somewhere, but an extra 2000 VE's in the field means an extra 16,000 spark plugs, 8000 tyres, 2000 oil filters, 10,000 litres of oil and so on that Holden could sell next year.

You and i both know that the dealers may only see some of that because people shop their service and consumables around, and it will hardly make up for the thousands of dollars lost at the original sale....
The concept of discounting at all cost regardless of the bottom line is business suicide.. or at best "business" Russian roulette...
The other thing it also does is crush resale value... great way to really P your customers off.

[lowriding]

4Vman ,your very aggressive at your keyboard but unless you know the details of every sale conducted and the cost price of every Holden and Ford product and service your only full of emotion and bluster i'm afraid : In my opinion what Ford are doing is bourne entirely of circumstance , not choice. They would have looked on in jealous envy of Holden's sales last month and how they turned a potential negative to a very positive situation for themselves ,FoMoCo would be fully aware of the upfront and trailing benefits that i outlined in my previous post to not only themselves but also to their dealers . It's pretty clear Holden are much better managed company ,and better managed companies are the key to long term survival.

regards

[Auslandau]

Originally Posted by lowriding

..................... It's pretty clear Holden are much better managed company ,and better managed companies are the key to long term survival.

regards

May look that way on the outside .... afterall they sell more cars than most so they must be?

More sales do not mean they are profitable or 'doing the right thing'. Its a perseption. In buisness I would be rather be number 10 and be healthy profit wise than be number 1, work flat out to be there and in the end make a minimal return. That is why soooooo many buisness fail. They concentrate on sales at ALL costs and look at profit second! Just so many do it ......

Ford ..... and most other auto companies are in less desperates than GM (Holden) and are managing well better. ALL would love to sell more .... but not at the expense of profit.



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[4Vman]

Originally Posted by lowriding

4Vman ,your very aggressive at your keyboard but unless you know the details of every sale conducted and the cost price of every Holden and Ford product and service your only full of emotion and bluster i'm afraid :

Nice deflection... its easier to critisise me hey than debate me on the merits of my opinion... usually a good indication you know you're wrong but won't admit it, especially seeing your're a holden fanboy.

Originally Posted by lowriding

In my opinion what Ford are doing is bourne entirely of circumstance , not choice. They would have looked on in jealous envy of Holden's sales last month and how they turned a potential negative to a very positive situation for themselves ,FoMoCo would be fully aware of the upfront and trailing benefits that i outlined in my previous post to not only themselves but also to their dealers . It's pretty clear Holden are much better managed company ,and better managed companies are the key to long term survival.

regards

Holden managed well hey? is that why they're in a worse financial state than Ford? is that why GM needed the handout in the states but Ford didnt?....
You can count your total sales and feel comfortable, i'll count the profits regardless of sales numbers before i get comfortable...

[ltd_on20s]

i always thought turnover was the best sign of a healthy business...the more stock turned over even at a lower cost is more profitable in the long run......more customers, more incomings, more business.


but it really depeneds on the business model...eg ferrari wouldnt discount because they only make numbers less than what the market wants ensureing all its cars go for a premium, however mass market is a different story

[Wally]

Originally Posted by auslandau

......

Ford ..... and most other auto companies are in less desperates than GM (Holden) and are managing well better. ALL would love to sell more .... but not at the expense of profit.

An aquaintance of mine is a Ford dealer; things are not good and if he makes a profit it is very minor. I get the impression Ford are banking on the future little car to pull them up out of the doldrums.

[Scott]

Originally Posted by 4Vman

except you totally missed the profit margin...
@ $10 ea he made $2 profit.. @ $9 ea he made a $1 profit.. so if he sold 10 @ $10 ea he made $20 clear total profit and selling 18 @ $9 ea he made $18 clear total profit...

So which is better??

In Holdens case (who are the ones discounting), the lesser profit is the better option as they have an over supply issue. Any profit (or least loss) is better than having old stock costing you 10's of millions a month just sitting around.

I had wondered which way those maths were supposed to work - for Ford or for Holden.

New Holden: sell $10 - profit $2 - sell 10 = $20 (if they don't sell, drop $1.50 for cost of cash, storage, downtime, cost to move them).
New Holden (with their over-supply) Make that profit $0.50ea. Sell 10 = $5.00 profit.
Discount Holden: $ 9 - profit $1 - sell 18 = $18.00

Hrmmm, wonder what I'd be doing?