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Old 07-20-2018, 10:23 AM   #15
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Be careful about making assumptions on fleet sales because you are missing a key item...profit. Dodge could very well afford a large number of fleet sales because their platform has been paid off for years. The only thing they have pay off are the components. Not so for Camaro and Mustang. I think the Camaro is doing better than the Mustang though in that category. Since they had been running almost the same percentage of fleet as the Challenger with a completely new car.

Also the Challenger has consistently sold better since the '15 refresh than it had in years prior. It would be interesting to see if after the refresh (and Mustang/Camaro getting smaller) the Challenger fleet sales jumped or if it was retail ones.
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Old 07-20-2018, 10:54 AM   #16
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It won't be a great handling car until they do a complete redesign. They're just getting the most out of that tired old platform.


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With a very large chunk of those sales going to rental fleets
Additionally, Challenger & Charger models can be purchased at 20% below sticker any day of the week.

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I've said it numerous times before: FCA's finances are in the toilet. They have tried to sell Dodge countless times over the past 5-10 years and nobody will buy them. With this being said, they don't have the money to engineer a new car, so they have to make due with the Challenger platform. Imagine if they still had all of the money that was wasted on engineering and designing the Chrysler 200 and Dodge Dart, only to have them last 6 years and 3 years respectively.
Imagine if FCA utilized some of the Jeep & Ram profits for R&D of new Challenger/Charger models, instead of funneling them into failed Alfa Romeo & Maserati products.
The company stated the Giorgio platform would be shared with a new Challenger/Charger, but when Giulia sales & quality floundered, they retracted the decision.
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Old 07-20-2018, 11:00 AM   #17
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A lot less Camaros.

Sales are not just sales...they don't mean everything. Profits do. Would you rather sell 500 of something and make a grand off each, or 2000 of something and make $200 off each?

(answer: the former)


A sale is a sale. Period. You guys like to make it out that a fleet sale is evil here. They are making some money on them, just not as much as retail sale. Also fleet sales can keep the factory moving, you are not making any money when the factory is sitting idle. Would Ford and Dodge love more retail sales, you bet but sometimes you need to offload inventory in bulk. It's all about finding the right balance.

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Be careful about making assumptions on fleet sales because you are missing a key item...profit. Dodge could very well afford a large number of fleet sales because their platform has been paid off for years. The only thing they have pay off are the components. Not so for Camaro and Mustang. I think the Camaro is doing better than the Mustang though in that category. Since they had been running almost the same percentage of fleet as the Challenger with a completely new car.

Also the Challenger has consistently sold better since the '15 refresh than it had in years prior. It would be interesting to see if after the refresh (and Mustang/Camaro getting smaller) the Challenger fleet sales jumped or if it was retail ones.
Agreed ^
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it has more power...its available power is like a set kof double Ds (no matter where your face is... theyre everywhere) it has the suspension to mame it matter...(
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Old 07-20-2018, 11:12 AM   #18
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A sale is a sale. Period. ...
Naa. I can't get on board with that.

Are sales (any sale?) good? Well yes...at least as long as there is some sort of profit involved under normal circumstance.

But again, profit is king.

Why GM would want to keep fleet sales to a low number....I don't know. That should be just extra profit on top of their more profitable retail sales. Maybe its simply b/c it lowers the over % of profit they can claim they make on their vehicles. I don't know the reason. But 2,500 fleet sales does not equal 2,500 retail sales in my book. In no way do I think fleet sales are evil. I just consider retail sales as the better sale.

In terms of exposure....well then yes, the more sales the better no matter how you can get them.
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Old 07-20-2018, 11:20 AM   #19
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Rental sales are bad in 3 ways.


Rental companies tend to buy cars that are cheap with and with few, if any, extra options. This means they are low margin to begin with.

Next, fleet sales are normally discounted even more than whatever incentives you happen to find at the dealers lot (buy in bulk to save!), driving down profit margins even further

Lastly, this is one that concerns owners & dealers more than the manufacturer. Rental cars pull down the average resale value of cars sold via retail. So even when a customer comes back a few years later, that person gets less on their trade in and the dealer makes less on reselling the used car. Similarly, it also drives up the cost of leasing because of the higher depreciation rate.

Selling cars to rental fleets is a way to keep the factory turning out cars. But thats about it. Saying a sale is a sale is like saying a job is a job -you're getting paid. So what if its a part time job paying minimum wage? Thats the same as getting a $65k a year salary in an office somewhere, right?

Also, the idea that the tooling is 'paid off' on old cars is BS to me. Development costs and tooling are one time deals. You pay for it before you start building, with money you made from selling other cars. Not by transferring any and all profits from a new car sold into the 'tooling debt' for each individual model, until such time as the tooling is paid for and then you get to pocket the money as profit. I mean, does that not sound insane if you are a century old automaker that has to buy multiple sets of tooling each and every year and have a revenue of many, many, billions of dollars to do it with?
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Old 07-20-2018, 11:26 AM   #20
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Naa. I can't get on board with that.

Are sales (any sale?) good? Well yes...at least as long as there is some sort of profit involved under normal circumstance.

But again, profit is king.

Why GM would want to keep fleet sales to a low number....I don't know. That should be just extra profit on top of their more profitable retail sales. Maybe its simply b/c it lowers the over % of profit they can claim they make on their vehicles. I don't know the reason. But 2,500 fleet sales does not equal 2,500 retail sales in my book. In no way do I think fleet sales are evil. I just consider retail sales as the better sale.

In terms of exposure....well then yes, the more sales the better no matter how you can get them.
GM limits fleet sales because they reduce overall profit margin. If a retail vehicle has a $1,000 profit & a fleet vehicle has a $500 profit, then the profit margin is $750. This in turn affects earnings reports, which in turn affects share prices. It's all about keeping the shareholders happy, because ultimately they're the ones to whom they answer.
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Old 07-20-2018, 11:38 AM   #21
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So $45,000 USD for the Demon JR.

The Scat Packs are well north of 60k in Canada so this puppy will be $70k up here.

BTW a lot of rental companies are now buying loaded out cars and flipping them faster.
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Old 07-20-2018, 12:32 PM   #22
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Also, the idea that the tooling is 'paid off' on old cars is BS to me. Development costs and tooling are one time deals. You pay for it before you start building, with money you made from selling other cars. Not by transferring any and all profits from a new car sold into the 'tooling debt' for each individual model, until such time as the tooling is paid for and then you get to pocket the money as profit. I mean, does that not sound insane if you are a century old automaker that has to buy multiple sets of tooling each and every year and have a revenue of many, many, billions of dollars to do it with?
So you are saying Dodge is paying as much for tooling and R&D as GM did for the 6th gen when Dodge is using the same chassis, some body parts and components for almost a decade? Tooling and R&D costs are a constant in the business. The scope and scale of those are not.

That's the point I was making, we don't know where their profit margins are. They maybe saving a bunch of money by pumping out fleet sales over losing money with a plant idling. In the end, profit margin is all that matters. ATP and % of fleet sales both mean nothing without knowing the margins.
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Old 07-20-2018, 01:07 PM   #23
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Naa. I can't get on board with that.

Are sales (any sale?) good? Well yes...at least as long as there is some sort of profit involved under normal circumstance.

But again, profit is king.

Why GM would want to keep fleet sales to a low number....I don't know. That should be just extra profit on top of their more profitable retail sales. Maybe its simply b/c it lowers the over % of profit they can claim they make on their vehicles. I don't know the reason. But 2,500 fleet sales does not equal 2,500 retail sales in my book. In no way do I think fleet sales are evil. I just consider retail sales as the better sale.

In terms of exposure....well then yes, the more sales the better no matter how you can get them.
I totally get what your saying. But as long your selling something at a profit, a sale is a sale. Would you rather have more higher profit sales of course but sitting on unsold inventory isn't a recipe for success either.

I agree 2500 fleet sales is not 2500 retail sales. The secret is when they are mixed together. it's about finding the right balance.



Quote:
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Rental sales are bad in 3 ways.


Rental companies tend to buy cars that are cheap with and with few, if any, extra options. This means they are low margin to begin with.

Next, fleet sales are normally discounted even more than whatever incentives you happen to find at the dealers lot (buy in bulk to save!), driving down profit margins even further

Lastly, this is one that concerns owners & dealers more than the manufacturer. Rental cars pull down the average resale value of cars sold via retail. So even when a customer comes back a few years later, that person gets less on their trade in and the dealer makes less on reselling the used car. Similarly, it also drives up the cost of leasing because of the higher depreciation rate.

Selling cars to rental fleets is a way to keep the factory turning out cars. But thats about it. Saying a sale is a sale is like saying a job is a job -you're getting paid. So what if its a part time job paying minimum wage? Thats the same as getting a $65k a year salary in an office somewhere, right?

Also, the idea that the tooling is 'paid off' on old cars is BS to me. Development costs and tooling are one time deals. You pay for it before you start building, with money you made from selling other cars. Not by transferring any and all profits from a new car sold into the 'tooling debt' for each individual model, until such time as the tooling is paid for and then you get to pocket the money as profit. I mean, does that not sound insane if you are a century old automaker that has to buy multiple sets of tooling each and every year and have a revenue of many, many, billions of dollars to do it with?
I disagree a bit with your job analogy. In the case of the fleet sale debate, because it's always a mix of both retail and fleet. If it was 100% fleet I would have to agree with you it's not the same.

Now maybe my view is a bit skewed based on personal experiences, but in my line of work, idle time and excessive inventory can kill the bottom line.

Like I always say its about finding the right balance that works.
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Lets keep it simple. ..
it has more power...its available power is like a set kof double Ds (no matter where your face is... theyre everywhere) it has the suspension to mame it matter...(
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Old 07-20-2018, 01:16 PM   #24
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For all we know, rental companies may not want Camaros due to the size. With little to no backseat room, you're pretty much limited to folks that are solo or +1 renting them.
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Old 07-20-2018, 01:20 PM   #25
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Also, the idea that the tooling is 'paid off' on old cars is BS to me. Development costs and tooling are one time deals. You pay for it before you start building, with money you made from selling other cars. Not by transferring any and all profits from a new car sold into the 'tooling debt' for each individual model, until such time as the tooling is paid for and then you get to pocket the money as profit. I mean, does that not sound insane if you are a century old automaker that has to buy multiple sets of tooling each and every year and have a revenue of many, many, billions of dollars to do it with?
If you think that they don't take development, tooling and build costs into consideration when considering if a model is profitable and successful, you're just wrong.
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Old 07-20-2018, 02:12 PM   #26
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So you are saying Dodge is paying as much for tooling and R&D as GM did for the 6th gen when Dodge is using the same chassis, some body parts and components for almost a decade? Tooling and R&D costs are a constant in the business. The scope and scale of those are not.

That's the point I was making, we don't know where their profit margins are. They maybe saving a bunch of money by pumping out fleet sales over losing money with a plant idling. In the end, profit margin is all that matters. ATP and % of fleet sales both mean nothing without knowing the margins.
Actually, the LX platform was developed during the DaimlerChrysler days, from outgoing Mercedes-Benz bin parts & first used in 2005. It has W220 control arms & W210 rear suspension, transmission, rear differential & ESP system.
The LC platform is simply a shortened LX, with the LD & LA being modified versions, so it's been around in some variation for a long time.
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Old 07-20-2018, 02:42 PM   #27
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Fleet sales may not be the best, but factory utilization is often ignored. The Alpha based cars are not selling that well. Sure, the Camaro has fewer fleet sales, but you have to wonder how that comes into play. The overhead of the factory is the same, whether you sell 5 cars or 5000. Not to mention cost of components generally go down the more you buy. The Camaro may make more money per sale, but the lower utilization and volume may eat into that.

The fact is we don’t know what the end result is. The Challengers may be printing money for Dodge while Camaro is bleeding GM dry. It could be the reverse. The only people that know the answer aren’t talking to us about it.
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Old 07-20-2018, 02:53 PM   #28
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The fact is we donít know what the end result is. The Challengers may be printing money for Dodge while Camaro is bleeding GM dry. It could be the reverse. The only people that know the answer arenít talking to us about it.
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