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View Full Version : Is the Dealer Margin on a Ford Fiesta only $285?


XDCX
08-24-2011, 12:22 PM
I was reading the debut editorial Jim Ziegler wrote for Ward's Dealer Business and the following excerpt caught my attention:


A second issue Ford dealers are voicing is the unconscionably low profit margins on the vehicle invoices. Here's a company posting billions of dollars in profits, and the dealers are selling the Ford Fiesta with a sticker price of $16,300 and a profit margin at full list of only $285.


Is it true that a Ford dealer only has a $285 margin between Invoice and MSRP on a 2011 Ford Fiesta? A dealer would barely have enough margin to pay his salesperson and managers at that level - how is the dealer expected to pay his/her overhead and make any money?

Are the Ford dealers pushing for higher margins?

Here's the link to the full editorial by Jim Ziegler - click here (http://wardsdealer.com/ar/auto_dr_jekyll_mr/)

Lakeshow
08-24-2011, 03:41 PM
Margins on Chevy Cobalts were $6-800 when we sold new, it wouldn't surprise me on the Fords.

However, I did notice in searching for a new pickup Ford's invoice for a same-equipped pickup was about $3k less than the GM.

SHACOS
08-24-2011, 08:05 PM
Is Ford offering any volume based incentives on the Fiesta? It seems that incentives or selling a bunch of back end product would be the only way to sell what could be a nice little vehicle for Ford. I saw a lime green one the other day and I didn't want to immediately flatten the tires. The odds! :)

XDCX
08-25-2011, 09:34 AM
Margins on Chevy Cobalts were $6-800 when we sold new, it wouldn't surprise me on the Fords.

Wow, that's a skinny margin too.

It's got to be hard to make any money when the customer's assuming you've got $3K margin to work with and you really only have $6 - 800. :(

However, I did notice in searching for a new pickup Ford's invoice for a same-equipped pickup was about $3k less than the GM.

That surprises me - I would think the pricing would be within a couple hundered dollars.

I wonder if incentives and dealer cash would make the final transaction prices between the two vehicles closer? I've read that GM has been stuffing their dealers with new trucks and I'm guessing GM's got some dealer cash on them to help clear out the inventory.

XDCX
08-25-2011, 09:39 AM
Is Ford offering any volume based incentives on the Fiesta? It seems that incentives or selling a bunch of back end product would be the only way to sell what could be a nice little vehicle for Ford. I saw a lime green one the other day and I didn't want to immediately flatten the tires. The odds! :)

That's a good point - I wonder how much dealer cash Ford has on the Fiesta?

With so many Internet customers wanting to buy everything at Invoice maybe the new business model is to have thin margins on the Monroney but aggressive dealer cash programs that allow the dealers to make some money?

Concerning the lime green Fiesta, I saw one when I drove by a Ford dealer and while I like the car I hate the color.....

JUNIOR
08-25-2011, 11:11 AM
Got an even better one than that. I had a 2010 Kia Forte LX in stock and my invoice was $50 higher tan the MSRP. If I sold the vehicle at sticker, I lost money. The reason is the charges that Kia tacks onto the invoice side such as warranty parts re-imbursement and the DMg contibution. The margins are very low on the new Kias and they pay $400 a car when you hit your monthly target.

gingersnap
08-25-2011, 01:37 PM
A very good customer of mine calls me and wants a new Jeep Compass for his daughter to take to college. So he does not get the dreaded $800.00 to $1200.00 Monro Brake special phone call new car new warranty no headaces. $20,055.00 is invoice $20,395.00 is retail. Plus I have to fill it with gas put a inspection sticker on it clean it up and send to guys 125 miles away to pick it up. I told him to go to the college where she is going and buy it there. I am convinced any more we are just outlets for the OEM's either have to be big or get out.

79LilRedExpress
08-25-2011, 07:38 PM
A very good customer of mine calls me and wants a new Jeep Compass for his daughter to take to college. So he does not get the dreaded $800.00 to $1200.00 Monro Brake special phone call new car new warranty no headaces. $20,055.00 is invoice $20,395.00 is retail. Plus I have to fill it with gas put a inspection sticker on it clean it up and send to guys 125 miles away to pick it up. I told him to go to the college where she is going and buy it there. I am convinced any more we are just outlets for the OEM's either have to be big or get out.

At least the Compass has a $1000 Rebate...

How about the ever so popular 200 LX ?
Great sticker price of $19,995....
Invoice-----------> $19,774

A huge mark-up of $221 and ZERO rebate.... :eek:

Txflyer
08-25-2011, 08:18 PM
At least the Compass has a $1000 Rebate...

How about the ever so popular 200 LX ?
Great sticker price of $19,995....
Invoice-----------> $19,774

A huge mark-up of $221 and ZERO rebate.... :eek:

and it kind of looks like a Sebring . . . it's got that going for it. ;)

Lakeshow
08-26-2011, 08:15 AM
Wow, that's a skinny margin too.

It's got to be hard to make any money when the customer's assuming you've got $3K margin to work with and you really only have $6 - 800. :(



That surprises me - I would think the pricing would be within a couple hundered dollars.

I wonder if incentives and dealer cash would make the final transaction prices between the two vehicles closer? I've read that GM has been stuffing their dealers with new trucks and I'm guessing GM's got some dealer cash on them to help clear out the inventory.


As of yesterday's incentives it is $5k and change cheaper for me to buy a new Ford Diesel than a new GM diesel(within $500 MSRP). Both dealers are giving me invoice -rebates, -50% holdback. The Ford has a $3g less invoice and $2000 more rebate than the GM.

I remember in the mid-2000's when Dodge had $10k rebates on their Ram Cummings pickups, and how hard it was to move the GM stuff for $10k more. Glad I don't have to play those games anymore.:D

XDCX
08-26-2011, 10:58 AM
This has really turned out to be an interesting thread. :thumbsup:

It's interesting to me to see the issue of low dealer margins isn't limited to the Ford Fiesta. The example JUNIOR provided on the KIA Forte LX is simply incredible - the Invoice price is higher than MSPR. :rolleyes:

Hopefully this thread will grow with more examples and the OEMs will be forced to answer the question how their dealers are expected to have modern facilities with a fully trained staff if they can't make any money by selling new cars.