Some automakers today are trying to manage the retail prices of their cars and light trucks.
It's not going to work.
Somebody has to realize that when all is said and done, it's the automobile dealer who will decide on the transaction price, and it would be a mistake to cut the margins so thin that the dealer doesn't have any room to work a deal.
I have believed that most people dislike the negotiating process. General Motors' employee-price-for-all promotion, which was copied by Ford Motor Co. and the Chrysler group, seemed to demonstrate that people liked the no-haggling fixed price that was offered.
They wanted the lowest possible price as well as the no-dicker sticker. That was the best of all combinations.
But the factories still must allow some room for dealers.
Not all dealers are in major markets. There is no doubt that the price considerations aren't the same in large and small markets. The price, both invoice and sticker, has to allow enough room for the dealer and the customer to be satisfied. And that certainly may mean having enough room for overallowances on trade-ins.
It has become a lot more confusing now that GM has let the genie out of the bottle. Now that folks have purchased new cars and trucks at rock-bottom prices -- some might say below rock bottom -- and with no negotiation necessary, there will have to be some structural changes in the way the car business does business.
A lot of dealers -- mainly in major markets -- have successfully adopted the no-dicker-sticker philosophy. When a dozen or so dealers in a major market sell cars in the orthodox manner, it's fairly easy to realize that the lone no-dicker dealer is going to have a real opportunity.
When GM adopted employee prices for all and others followed, a lot of customers were exposed to the philosophy of a nonnegotiated price. The marketing idea worked, and right now no one is quite sure whether it was the low price or the no-dicker sticker or both. But it worked.
Now the factories must make a slow transition to their new pricing policy so that both rural and urban dealers will be able to adjust their pricing.
Go slowly. It makes the most sense.