COMMENT: Forced to be stingy

Franz W. Rother is Editor-in-Chief of Automobilwoche

One does not become rich by spending money but by sticking to tough cost-saving measures.

Porsche boss Wendelin Wiedeking, for example, made those who attended the company's recent press conference to announce financial results pay for their own parking -- despite the fact that his company, compared with Volkswagen or DaimlerChrysler, is swimming in money.

For Wiedeking, however, Porsche's current success is no reason to become rambunctious. On the contrary, his board of directors has just decided to have another close look at all the working processes within the corporation to seek more ways to cut costs.

With this in mind, dealers should abandon the hope that Porsche might give them financial support for the Boxster, which is getting on in years.

Expensive incentives are only an option to sell off stock vehicles, Wiedeking announced. It remains to be seen if he can stick to this course.

Other premium automakers have already given in.

BMW, for example, pays its dealers premiums of up to 2,000 euros if they register 3-series vehicles under their name for two weeks and then sell them to private customers - with an appropriate discount, of course.

This tactic increases both the market share and sales figures but is bad for the return on investment.

Mercedes dealers have also lowered their standards. There was a time when new car buyers were lucky to get a free set of floor mats. Nowadays, discounts of a few thousand euros are not unusual. The US-style discount battle hit Europe some time ago.

Automakers prefer paying for expensive discounts rather than cutting overcapacity, that way they can keep their plants operating. The price for this decision is paid by the dealers - who have lost their joy for the business due to the continual price haggling with customers - and the suppliers. Partsmakers have faced massive pressure during this year's sales negotiations with OEMs to lower their prices significantly.

DaimlerChrysler's demand, for instance, of price reductions of up to 5 percent annually, which is made just before the end of the year, threw its "partners" into turmoil.

The torturous methods that Jose Ignacio Lopez once used to hurt General Motors' and Volkswagen's suppliers seem to be making a comeback.

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.