Dealer argument with sales manager at Ford dealership about profit - who is correct ?

[metroshot]

So today I went to a Ford dealer to test drive one of many customer abandoned MME on the lot.

Forgiving them for $10K ADM and $20K ADM on Lightnings; we got into a discussion on dealer profit with the sales manager.

The sales manager said they make $1500-$2100 per EV they sell (Lightning or MME).

I said, no way - Ford pays out on various back end monies - more like 8-10% figuring all their service and sales staff are EV certified.

Was the sales manager blowing smoke up my a$$ ???

There is no way they can exist if they have to pay their staff, lot space and overhead.

Tell me who is correct?

My Lightning and MME I test drove:

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[Pioneer74]

There were internal memos posted when the Lightning first went on sale that started the dealership was paid roughly 10% of the sticker price when they sold it. Never saw anything posted about the Mach-E.

 

[Oafy44]

Not that he’s lying but my bet is he is just told by management what it is without really doing the math.
1) I would take out service department for EVs. They are probably still just doing mostly warranty work still on MME and lightnings right now since they are still pretty new
But let’s just take an $80k lightning for an example and let’s say it’s a TESLA lightning …..or pretty soon a cyber truck. Based off their numbers Tesla would make around $20k profit off an $80k vehicle based off their last quarter per unit profit. I’m not sure how much less ford makes because they have a dealer network and aren’t as efficient as Tesla but it seems $1500-$2k could be low. Now ford isn’t making much money on EVs and now the cut the price of Mache and will lose some money on models maybe it isn’t that much , but 1 car salesman should sell around 20 vehicles or so a month right now for an in town /midsized dealer. - not a volume dealer).
If their department has 10 salespeople then they would generate roughly 200 sales a month. 200x$1.5-2k is $300-400k - not Including service department revenue which I think would be a couple hundred thousand a month. if each salesperson gets $300 -$400per sale - that would leave the dealer with let’s say $1k profit per car - but then has to pay financing people - who probably get a % per car and add ons ect. Secretaries/manager / owner. Maybe there’s enough in there for around $2k per EV. But my guess is ifFord GM ect. Want to get rid of dealers they must be getting more then $2k per vehicle.

 

[shutterbug]

Was the sales manager blowing smoke up my a$$ ???

Assume that if their lips are moving, they are lying. If they tell you the truth, it's purely by accident.

 

[GDN]

I don't know his source, but I believe it -this article is from late 2021 just before the trucks hit the street. I believe 10% is the minimum dealers are making.

https://www.carsdirect.com/deals-articles/2022-ford-lightning-invoice-pricing-is-totally-weird

The guys at the dealership were blowing smoke up your A$$ for sure.

 

[Pioneer74]

Blended invoice. First post in this thread. There is also a .pdf file of the internal memo posted somewhere in this site that explains it.

https://www.f150lightningforum.com/forum/threads/-2022-f-150-lightning-order-bank-playbook-with-pricing-ordering-begin-1-6-build-price-tomorrow-1-4.7828/

 

[Flashy McLightning]

MachE is 4%. Lightning 10%. All changes in 2024.

 

[metroshot]

Blended invoice. First post in this thread. There is also a .pdf file of the internal memo posted somewhere in this site that explains it.

https://www.f150lightningforum.com/forum/threads/-2022-f-150-lightning-order-bank-playbook-with-pricing-ordering-begin-1-6-build-price-tomorrow-1-4.7828/

LOVE how this graphic says more than a thousand words!

thanks - will have to show the dealer - and watch for their reaction!

 

[Amps]

will have to show the dealer - and watch for their reaction!

~"Oh, you got that from the internet."~

 

[Pioneer74]

~"Oh, you got that from the internet."~

Hard to argue with the whole .pdf file that was posted on their own dealer website. But I'm sure they will.

It's threads like this that make me thankful I'm A-Plan.

 

[IdeaOfTheDayCom]

Forgiving them for $10K ADM and $20K ADM on Lightnings; we got into a discussion on dealer profit with the sales manager.

The sales manager said they make $1500-$2100 per EV they sell (Lightning or MME).

I said, no way - Ford pays out on various back end monies - more like 8-10% figuring all their service and sales staff are EV certified.

Was the sales manager blowing smoke up my a$$ ???

As somebody else pointed out, always assume they're lying, or at best misinformed.

Whatever their real profit margin is, keep the following in mind.

The old dealership model was from an era where customers walked onto a lot, and it was up to the dealer to persuade the customer why they should buy from them. A good sales rep and dealership could really make an impact on the overall sales in any given region. You couldn't order one without a dealer, and you could say the dealer was 100% responsible for closing each sale.

Most of Ford's EV sales were initiated by customers who reserved on the Ford website before ever talking to the dealer. One could argue both sides of whether the dealer should earn the same commissions from this kind of order. After all, the sales rep (and the dealer for that matter) had nothing to do with closing the deal.

Right now, the dealer is still responsible for the prep and delivery, but I think that could clearly be handled by Ford directly if they could legally be allowed to do it and frankly they may even do a better job by simply dropping it off at your home.

The fact remains that with the dealer having nothing to do with "selling" the vehicle, they should consider any income from pre-ordered vehicles to be like free money. They had no impact on making those sales, so they shouldn't complain about a potentially lower commission.

 

[metroshot]

As somebody else pointed out, always assume they're lying, or at best misinformed.

Whatever their real profit margin is, keep the following in mind.

The old dealership model was from an era where customers walked onto a lot, and it was up to the dealer to persuade the customer why they should buy from them. A good sales rep and dealership could really make an impact on the overall sales in any given region. You couldn't order one without a dealer, and you could say the dealer was 100% responsible for closing each sale.

Most of Ford's EV sales were initiated by customers who reserved on the Ford website before ever talking to the dealer. One could argue both sides of whether the dealer should earn the same commissions from this kind of order. After all, the sales rep (and the dealer for that matter) had nothing to do with closing the deal.

Right now, the dealer is still responsible for the prep and delivery, but I think that could clearly be handled by Ford directly if they could legally be allowed to do it and frankly they may even do a better job by simply dropping it off at your home.

The fact remains that with the dealer having nothing to do with "selling" the vehicle, they should consider any income from pre-ordered vehicles to be like free money. They had no impact on making those sales, so they shouldn't complain about a potentially lower commission.

Well said and so true nowadays !

I forgot that when I bought the Lightning - never stepped foot into the dealership - they never offered a test drive, offered a bottle of water, offer to throw in free car washes, etc.

They just sat back and a couple of keystrokes approving the special order, voila the truck appeared.

Brought in my own financing, went straight to F&I and 30 minutes later - done deal.

 

[davehu]

The discussion is irrelevant. how much money the dealer makes is no more your business than how much money you make is to them. If you think they are charging too much, take your business elsewhere. any salesman who gets into such a discussion isn't worthy of getting your business.

 

[kalalp]

As a businessman, this is the correct answer. ^^^^

 

[Roy2001]

So today I went to a Ford dealer to test drive one of many customer abandoned MME on the lot.

Forgiving them for $10K ADM and $20K ADM on Lightnings; we got into a discussion on dealer profit with the sales manager.

The sales manager said they make $1500-$2100 per EV they sell (Lightning or MME).

I said, no way - Ford pays out on various back end monies - more like 8-10% figuring all their service and sales staff are EV certified.

Was the sales manager blowing smoke up my a$$ ???

There is no way they can exist if they have to pay their staff, lot space and overhead.

Tell me who is correct?

Besides difference between invoice and MSRP, dealers get various forms of money like 3% kick back.

$1500-$2100 is probably the commitment to the sales manager himself.

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