The actual profit margin per car for a Mitsubishi dealer is about 7% on average - but only IF sold at MSRP. A few years ago it was closer to 12%. Holdback is about another 3% but that's designed to recoupe inventory costs and on average does not become profit. Compare that to other consumer products like say, jewelry (800% markup) and you begin to see what I mean. Or how many times have we all shopped say, 1/2 off sales for clothes, appliances or whatnot. Ever seen that with new cars?

 

Agree 1000% there Mark. Margin on new Mits cars is crap. I think there's something like $500 over invoice on a OZ-Rally, which is crap. I like to say that Mits cars should be sold more like Saturn sells their cars. What you see on the MSRP is about as low as it gets. This is most of the reason that dealers mark up their cars.

 

On an OZ it's actually closer to about $750-800 even after you include the association fee, which is still pathetic.

Interesting that you should bring up Saturn. They have more markup on a toilet like the S sedan (around $1,300) than we do on an infinately better Lancer yet every Saturn customer happily pays sticker and sends back high sales satisfaction survey scores. Those folks who try to argue with me that price=customer satisfaction have it backwards. If Saturn is any way to judge, the ones who pay sticker are the happiest cause frankly, by car-buying standards those folks are friggin ecstatic!

 

Hey Mark, I'm a fellow Diamond Sales Guild member working in Chicagoland. I have to agree with you on all of your comments. At my store, you have to bust your a** to make money on new Mitsubishi's. I can recall numerous deals where I spent 2,3,4 hours working with someone in order to get a "mini" deal ($50.00) That means I can make anywhere from $12-$25/hour selling them. I can make that at Home Depot. The average carbuyer still believes that the salesman is there to rape them on a car. I would invite anyone to try selling cars, and see first hand what it's all about. The fact is, nobody gets a bad deal anymore. There is way too much info available to consumers for anyone to get completely hosed on a car. At my dealer and most others, the real money is made by selling quantity. It's a given that you're not going to bank on each unit, so unit bonuses become the reason why salesmen stay in the business. I think that we have one of the most difficult jobs out there. We are trusted by 2% of the population (that's just below lawyers and plumbers) and we deal with rejection almost constantly. My career closing percentage is 30% (most salesmen in my district have 20-25% ratios), meaning that I sell cars to three out of ten customers that I talk to. It is now a matter of how much a** you can kiss to get a deal, so we further lose our integrity...never mind pride. But after all, it is our chosen career and must do what is necessary to pay the bills.

 

By the way, if anyone thinks it's outrageous to pay over sticker for an Evo...they have no appreciation for the car and what it means to true enthusiasts. Part of being an enthusiast is to make compromises. The Porsche lover sacrifices cargo capacity, fuel economy, ride quality, etc. in order to get a *****-out performance car because he appreciates what makes his ride special. The Evo buyer gives up very little to have such an amazing car. It has two extra doors, two more drive wheels and a lot more character than everything in it's price range. Not to mention exclusivity...ah that's the magic word. Where else can you get all of the above attributes AND be the only guy on the block with one? I would be happy enough just to be given the opportunity to buy one.

 

This is the epitome of salesman BS. What is the Evolution? It's a phenomenal performance VALUE. A lot of performance for not a lot of money. If you (the salesman - not mitsubishi) increase the price, you reduce the value. If you reduce the value, you reduce the significance of the car.

 

Chicago. Tough market. I feel for ya. We need to start hounding on our dealer principals to give Mitsu the OK to pay us a spin on every car. I don't care if the invoice price goes up $100 if that hunsky goes in my pocket. I could actually make a decent living selling them then.

Say, did you get to the Outlander Ride and Drive at the speedway?

 

Re: Say, did you get to the Outlander Ride and Drive at the speedway?

Yes, I went to the one at Chicago Motor Speedway in Cicero. I got busted for nearly flipping the CR-V

Later on, Kirk from District HQ asked me to give a walkaround on the Outlander in front of like 60 people in our group. I was totally nervous but I got right into it. Everyone was all, whoa..how do you know all that stuff? and Oh my God, I could never do a walkaround like that. I said, "See you at the Walkaround Competition!"

If you went, I'm sure I don't have to remind you about the nasty weather those two days.

 

You guys have just experienced more of what I call "buyer paranoia" Selling new cars is the heartland of buyer paranoia...everyone terrified that they are somehow getting ripped off and laughed at behind closed doors as they drive off the lot. For anyone reading this ... I'm not a car dealer ... nor in sales of any sort ... these guys aren't BSing...they like to make money (you DON'T???) and they really don't make a lot off of you even if you buy at MSRP. That's the fact. But nearly every yahoo who walks into a dealership feels that their self-esteem is being bargained for and if they don't squeeze the crap out of the dealer, they are sad, pathetic, idiots who could have paid $45 less if they just had "negotiated better". They are terrified that they will waken in the morning with "buyer's remorse" and kicking themselves for months for not saving the $45 they could have. These are also the same people who will spend $2.50/day on a latte and buy all kinds of WAY overpriced, useless crap on a regular basis when they don't feel their egos threatened. So before you go harping on the car dealers being "greedy" and ripping everyone off...consider if you want to trade jobs with them. NO? I'm not surprised...because if you are living in America, you are pretty much greedy by definition...and you wouldn't want to trade jobs with them because you MAKE MORE!!!
Hypocrites! Or are you just browsing this forum even though you could never ever think of affording a $ 30,000 LUXURY item? Whoever you are and whatever you are doing to make your money .... your doing it by taking a profit margin... and don't even BEGIN to tell me you would voluntarily make your paycheck smaller. Yeah, right.
New car dealers have to try to make $ from people who are on hightened defensive alert on an item which truly has a small profit margin. I personally do not envy them and do not want to trade jobs with them. 'nuff said

 

Thank you.

Thank you very, very much.

 

The EVO will probably always be an MSRP car. If anything, dealers may add on optional equipment to sweeten the deal, but I doubt they will lower the price on this one. Related things like, if the car becomes a favorite of the magazines and the enthusiasts who will drive them, and if the production remains below the overall demand for the car play a huge part on the cars vale at a dealership.

Almost every Integra Type R sold from 97-01 was sold at MSRP or higher. Thats because they were very popular and very limited in production (less ITRs were made over the 4 model years than one years estimated EVO production).

When S2000's and MINI COOPERS first came out, both were very regularly sold at $2-4K premiums over MSRP. But as production caught up to the demand the prices have come down to MSRP for MINI's and just below MSRP for S2000's (geographically specific to my area anyway).

SC

 

SC - Some S2000's sold for as much as $10k over list, and I've seen a few $45k stickers on S2000s (dealer-installed options with ridiculous markups). Unfortunately, the Evo may see the same thing, especially given the propensity for some people to spend whatever it takes to have the first one on the block.

 

I agree with you. I don't know of any dealership that doesn't jack the price up on a car that being released for the first time. It always seems to be the cars that everyone wants. I remember seeing almost $30,000 price tags on the PT Cruiser when it came out. The sad thing is, people pay these crazy prices. I can only imaging what they will do to the EVO VIII when it is released over here.

 

As long as a buyer is willing to pay markup like that then the dealers will try. If we take two other of Mitsubishi's 30K vehicles, like for instance an automatic Spyder GTS, or the recently discontinued 2WD Montero Sport Limited. They have 1680 and 1948 dollars of mark ups resepctively. That amounts to 5.9 and 6.5% of profit for each of them. Our "friends" at places like Edmunds.com or Kelley Blue Book tell buyers to expect a 3 or 4% markup. How gracious of them
Just try putting yourselves on the other side. How much of a return on a 28-29 thousand dollar investment would any of you want to make?

 

True when s2000's were first released, many metropolitian areas were jacking up the prices $5-10k above MSRP...Acura dealerships were trying to do the same thing for the Type R's for once they hit the peak of their popularity in early 2000.

And if we feel it's wrong to price over MSRP, we as consumers should avoid the dealerships that indulge in this practice. IMHO, dealers that price over MSRP are the definition of greed.

There are dealerships out there who do the right thing and sell at MSRP.....we should reward them by making our sales at their establishments....I know I am!

GP Tourer....you do realize when Edmunds is quoting the margains at 6 and 5%, they are talking about the profit that is built into the MSRP Pricing, not how much above MSRP you should expect the price to be, right?

SC