Filed under: Car Buying, Coupes, Sports/GTs, Nissan
Nissan can't prevent GT-R markups at dealer level
Despite floating a plan that would attempt to stop the inevitable customer speculation in the GT-R by voiding the car's warranty if it were sold in the first year, Nissan has come to the conclusion that they are, frankly, powerless to stop it. The company says it gave up on the plan because it wouldn't be fair to the guy who really had to sell his car within that time.
The other folks who Nissan won't be able to stop from making a bundle by marking up the car are its own dealers, who, let's face it, are frothing at the mouth to have a GT-R on display in their showrooms. Honestly, after years of trying to push Maximas and Sentras, if you were lucky enough to get some GT-Rs to sell, wouldn't you add a little cream? For some new shoes for the kids? Especially since there will be only 1,500 sold the first year?
But by law Nissan can't tell dealers what they should and shouldn't charge. Instead, it will "counsel them on why they shouldn't." And when the dealers are finished nodding sagely, everyone can expect them to start adding zeros. It's not all free beer, though: dealers certified to sell the GT-R will need to shell out on additional training for their mechanics, and will need to adjust the car's transmission and drive shafts every three years, for free. That's money they will probably recoup on the markup from just one car...
[Source: Kicking Tires]
Reader Comments (Page 1 of 2)
Vincenzo 1:35PM (11/21/2007)
Why would you buy an absolutely new car with a new engine in its first year of production?
If you have some wisdom, wait a couple years until Nissan fixes all small and big defects and annoyances.
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Menice 1:47PM (11/21/2007)
"Why would you buy an absolutely new car with a new engine in its first year of production?"
yea i'm with you on that one but the ones that buy this are able to drop the cash and are buying it "because" its absolutely new.
-and my ass they cant prevent markups.
JD 2:57PM (11/21/2007)
Agreed on the first model year rule. Things always go wrong. No matter how extensive the testing, no matter how good the engineering, things always go wrong. Especially on cars that are all new like this one. And while Nissan can't really directly stop dealers from marking up these cars, they can punish them in back door ways- like lowering their spot in line for further GTRs. Don't underestimate this power. You don't want to earn the scorn of the big company that supplies you, ever.
nissanfreak87 4:37PM (11/21/2007)
with this car, there won't be any bugs in the system, they've spent half a yar going 180mph around the nurburgring to fix those problems. I'd drive this car off the lot, to a track, and flog it with all confidence in it's engineering, now I just need the $100K dealers are going to charge for it, dealers suck
Christian 6:45PM (11/21/2007)
You heard its built by NISSAN right?
Gary Blomquist 1:11PM (11/23/2007)
I think with the money spent on this car, I could buy 3 Mazdaspeed3's, and let them appreciate in value, and enjoy great bang for the buck as well.
About the reliability in the first year of production. I totally agree. Wait a year for all the reflashes, and bugaboos to be fixed before taking the monetary plunge.
I got bit once on buying a first year model, and will never do that again. Spent so much time with warranty stuff......CEL's once a month.
M Bell 1:38PM (11/21/2007)
This may be the first car that has seriously made me consider replacing my 300-hp VW Corrado as my toy. And that's a big statement from a European car fan. While I'm not crazy about the idea of doing most of my engine work with a laptop (and Windows! Eugh!), the performance potential (and durn sexy looks) of this Skyline might just be too much to pass up.
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seoultrain 1:42PM (11/21/2007)
This is pretty much Nissan's fault. They priced it very low with small supply in the first year, when hype is strongest. I'm sure they didn't want to have a price cut in a couple years and piss off their early buyers, but $70K is a huge bargain for this car (Vette ZO6 notwithstanding).
Maybe they should have made only fully-loaded cars for the first year at $85K or so, then introduce a base trim for 70K when production can match the demand.
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Omer 1:48PM (11/21/2007)
I don't understand whats the big deal with mark-ups by dealership on this car(????). GT-R starts at 70K. People who are going to buy this car either have enough money so they don't give a sh*t car price or people who would like to buy it and sell right away to make a big profit. I personally don't like dealership in general (who does?) but the markup is going to happen either way at some level so don't blame Nissan for not controlling it. Nissan is correct for letting the people who want this car battle the dealerships. For pete's sake there are only 1500 in the first yr anyways. Only people with tons of money and no brains would buy car like this in its first year of production.
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Dan from Delaware 2:49PM (11/21/2007)
Where did you get the idea that people who have money don't care what things cost? It's been my experience that the more money people have, the more they like to get things for free. For instance, I remember Serena Williams saying that she will never pay to join a club because she feels that they should join her to be there.
Yes, people with big bucks buy stuff that us lesser mortals can't afford or justify, but that doesn't mean that they're immune to the value equation.
Joe K. 1:51PM (11/21/2007)
Toyota told its dealers that anybody marking the FJ higher than MSRP 'jeopardized their future allocation' so you had to charge the mark-ups on accessories and warranties and such.
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why not the LS2LS7? 1:51PM (11/21/2007)
It's already established that companies can set maximum prices for retailing their products. There was a lawsuit about it a couple years back that confirmed it was okay.
So Nissan could stop Nissan dealers from selling them above MSRP as new, just like BMW does with their dealers. But the dealers (or someone who works at the dealers) can just buy it and resell it as used at the higher price. Given this, leaning on the dealers maybe isn't that useful to them.
Likely Nissan will use the markups as a guideline for how much to raise the MSRP after a year and after two years, possibly increasing supply at the same time.
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cheezwiz 1:59PM (11/21/2007)
I totally agree. Vertical price fixing violates anti-trust laws if it's done in a monopolistic way. This prevents a manufacturer from setting a *minimum* price. These laws are there to protect the consumer, who would be harmed if prices had an artificially high floor. These laws do not apply in such a way to prevent a manufacturer from imposing a *maximum* price. Consumers benefit from a price ceiling, so one can be set without running afoul of these anti-trust laws.
Perhaps there's something in the franchise agreement that prevents this. However, there is nothing in general antitrust law that I've ever heard of that prevents Nissan from fixing the maximum price. I'd be shocked if there were a specific carve out in the law for cars - because this harms rather than helps consumers.
I'm calling shenanigans on Nissan's explanation.
DCragtop 1:55PM (11/21/2007)
Welcome to the price of playing w/the big dogs folks. You wanted an expensive Nissan...wish granted.
Now go gitrdun and stop ur bitchin!
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Dan from Delaware 2:51PM (11/21/2007)
"join her to be there" should read "pay her to be there"
JP 3:01PM (11/21/2007)
There is more in play here than laws. Individual dealers have franchise agreements with Nissan that lays out (among many other things, of course) what the rules are for setting final pricing on vehicles. I don't know about Nissan, but Honda, I know, puts few restrictions on this. The Honda dealer I worked at put a $1500 (and this was 10 years ago) mark up on Civics. The strategy had more to do with having room to reduce their price at the negotiating table than to actually make more money than is built into MSRP. Most of the time the sales manager took that $1500 off right away to make people feel all warm and fuzzy. Anyway, the point is that they had a lot of latitude to set pricing and I imagine things are very similar at Nissan.
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geo.stewart 3:43PM (11/21/2007)
'market adjustment' on a Civic?
That speaks volumes to me about the general demographic of idiots, no no no cant say that, I mean people who buy Hondas that that would be a successful argument for the dealer to make.
JP 5:08PM (11/21/2007)
You completly missed the point.
The point was to show the flexibility dealers have in their pricing. Becides, as I said, no one ended up paying the mark-up.
I understand though, the Honda jab poped into your head and you got excited.
Spaceweasel 3:22PM (11/21/2007)
I've never had a problem with free market price gouging on non-essentials (and while my heart might argue otherwise, a sports car is the essence of non-essential). It's a toy. It's in limited production. It's only right that you have to pay to play.
Some will argue that Nissan could/should make that money - but Nissan is trying to earn the press by claiming "bargain supercar" status. They wouldn't earn much more on such a low run anyway.
GT-500s go for over list. Z-06s go for over list. Almost any Italian exotic goes for over list. Hell, even Pontiac Solstices were going for over list. If people want it, are willing to pay for it, why would anyone deny the dealer the opportunity to make a bit extra. It's called capitalism, people.
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The Warden 3:54PM (11/21/2007)
one correction: nissan doesn't make the money...the dealership does and a nice commission for the salesperson.
Can you say 10 bagger?