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We MAY never see another RS again - Road & Track article

This is a discussion on We MAY never see another RS again - Road & Track article within the News forums, part of the Site News category; Excellent article posted by Road & Track Magazine why we may never see another RS in the USA. I really hope Ford dealers put an ...

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    RS Senior Member Sons of Speed's Avatar
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    We MAY never see another RS again - Road & Track article

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    Excellent article posted by Road & Track Magazine why we may never see another RS in the USA.
    I really hope Ford dealers put an end to all this ADM bull sh#t...

    HERE IS THE TEXT-ONLY ARTICLE WITHOUT PHOTOS OR CAPTIONS:

    By Jack Baruth Apr 7, 2017

    "Forty grand of additional dealer markup in a single photo." The photo to which the caption referred showed two new Shelby Mustangs and a Focus RS on the dealership floor. My first thought was a quote from the movie Clerks: "This job would be great it it wasn't for the (blank)ing customers." Only the way I heard it in my head was: This car business would be great if it wasn't for the (blank)ing dealers.

    Imagine that you're part of the various "skunkworks" operations at Ford. You've moved heaven and earth to find budget, engineering time, production time, supplier time, and manpower to turn lead into gold. Against all odds, you've gotten every level of the corporation to sign off on a project like the Mustang GT350 or the Focus RS–small-batch stuff that consumes massive amounts of effort while having less impact on the bottom line than the most insignificant additional-equipment package for the F-150 pickup does.

    It's no joke getting a performance variant of anything through a modern multinational like Ford or General Motors. You spend more time justifying your project's existence than you spend actually building the thing. It's the first thing that people want to cut when times are tough, and the last thing they want to fund when the market rebounds.

    Still, after all is said and done you've actually pulled it off. You've convinced the bean-counters to let you build an 8,250-rpm V8 or a 350-horsepower all-wheel-drive hatchback in candy-apple neon blue. You load up the factory orders, you watch the cars get rave reviews… and then everything just comes to a sudden, high-impact STOP at the dealers. The cars that you sweated blood to get in the hands of customers are glued to the showroom floors while the polyester-suit types running the dealers try to squeeze an extra ten or twenty grand worth of profit out of them.
    There are a lot of nice things we can say about the Shelby GT350. After all, we did name it our Performance Car of the Year for 2016. We loved the power its engine makes, but let's not forget that it also has "a hellacious exhaust note unlike any other American V8."

    "It's perfectly legal!" the sales managers will say, and they are right. "If we have to discount slow-selling cars, shouldn't we be able to mark-up the hot ones?" And that sounds fair on the surface of things. There's just one little problem: This kind of raw greed really only works with cost-no-object rich-boy toys like the Ferrari 458 Speciale or Ford's own GT. Those cars are already priced into the stratosphere. They aren't being purchased by people who are watching their budgets or trying to stretch into a dream car. With very few exceptions, if you can afford $300k for a toy you can probably afford $400k.

    That's just not the case with the fast Fords at the humbler end of the socioeconomic spectrum. My experience selling Fords and working for Ford Credit tells me that most of your buyers for those products are stretched pretty thin. They don't have an extra ten grand to throw at a car, and the banks aren't interested in loaning them that ten grand either. So they end up buying something else, while the marked-up cars continue to sit in the showroom.

    We've seen this movie before–with the 5.7-liter Pontiac GTO. This was a product that had huge momentum and tremendous buzz when it hit the showroom floors, but the dealers saw it as a chance to make a down payment on their next boat so the first allocation of cars wound up dead on arrival, sticker-shackled to the ground by additional markup. As more GTOs came off the boat from Australia, the dealers started to relax their grip a bit, but by then the word was out on the car that you couldn't get a decent price on one, so the buyers didn't bother to come in.

    When the significantly-improved LS2-powered GTO arrived a year later, it found its older cousins still cluttering up the lots. All of a sudden, the same dealers who had asked twenty grand over sticker were desperate to get rid of their inventory. All this did was convince buyers that the cars were overpriced and didn't retain their value, which harmed sales of the brand-new GTO as well.

    It's easy to imagine a scenario where the dealers sold their first GTO allocations at or below sticker, building sales momentum and customer excitement. The lots could have been empty by the time the bigger-bore car arrived, and the momentum would have picked up further from there. Maybe some of that "halo effect" might have actually rubbed off on the more modest Pontiac offerings. It's a stretch to say it, but if the Pontiac dealers had handled the GTO properly, maybe there might still be Pontiac dealers around today.

    The problem is that while even the most incompetent car company thinks in terms of product cycles and multi-year plans, the average dealership is run on a thirty-day basis. Given a chance to swing for the fences with five or ten grand worth of dealer markup, most of the sales managers out there will cheerfully forget all about "brand image" or long-term planning. And the longer a car sits on the showroom floor with that markup sticker, the more "sunk cost" incentive there is for the manager to keep the sticker on it just so he prove that he was right about putting it on there in first place. I'd call it fiddling while Rome burns, but at least Nero was reputed to be a competent musician. Most dealership sales personnel aren't even good at selling cars.

    I assure you that plenty of intelligent people at General Motors understood what a disaster this short-term dealer mindset was for the Pontiac brand, the same way a lot of intelligent people at Ford are probably holding their head in their hands watching their dealers try to screw an extra five grand out of Focus buyers. The problem is that the separation between manufacturer and dealer is enshrined in franchise law pretty much across every one of the fifty states. Believe me, Ford would love to have you visit an "RS/Shelby Boutique" where you could enjoy a Nordstrom's approach to buying your next performance car–but the laws on the books, and their existing contracts, mean that they are forced, like the old general once said, to go to war with the army they have, not the army they want.

    This is what I'm afraid will happen, because it's happened in the past: The dealers will misuse their additional-markup privileges to kill the market for the Focus RS and the standard non-R versions of the Shelby GT350. Then, after the market dries up, they will complain to Ford that the cars don't sell, which will give the bean counters additional ammunition to refuse requests for future fast-Ford projects. Before you know it, the closest thing you'll be able to get to a factory-build Ford sporting vehicle will be the tape-and-stripe packages that reigned supreme forty years ago in the Malaise Era.

    The only people who can change this state of affairs are the people who have decision power at the dealerships. I know that a lot of them read this website, at least occasionally. So if you are a sales manager or a general manager at a Ford dealer, I am begging you: Sell these cars to the people who want them, at a fair price, as quickly as you can. Try to be part of the solution instead of being part of the problem. If you are a Tom Cruise fan, then imagine him telling you to "Help Ford help you!" Or if, like me, you read the Bible a lot as a child, imagine Moses telling you to "Let My Shelbys Go!" Or maybe you're a fan of the original Top Gear, in which case I'm going to suggest that you… "Get off your RS!"

    The New High-Performance Fords Could Fail the Same Way the Pontiac GTO Did
    Last edited by Hoonigan; 04-08-2017 at 08:10 PM.
    Traffic22, NINJA, GrayRS and 8 others like this.

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    RS Specialist cornerexit's Avatar
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    Couldn't agree more. Each dealer that told me adm I told to go f themselves, explained that the RS, or Shelby, is a working man's car. It's not a F'ing Ferrari. The ones that told me sticker I said a polite no thanks. A year of this, hunting like an olympic champion, 3k off msrp is what I ended up getting. Took more effort than anything I have ever purchased in my life. And I had to go out in the sticks to get it at a tiny dealer, out in the country, Bought it on the last day of the month and it had sat there for weeks. So many things in my favor.

    This adm bs is just that. It's a bad deal. But this writer of this article failed to mention that customers were 50% of the problem. If nobody would pay adm we wouldn't have this problem. If I were in charge at Ford I'd force the dealer network to sell at msrp or below, or not get any allocations. But the dealer network is only 50% of the problem. Impatient, I have to have it now folks are the other 50%. Apparently, nationwide, people paid adm's due to their impatience. I had the fortitude to wait it all out and saved 8k compared to people paying 5k adm. I do agree with the writer, in that this bs will ruin future performance cars, at least the affordable ones.
    People paying adm and the dealer's charging it makes me sick.
    Last edited by cornerexit; 04-07-2017 at 01:15 PM.
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    I think that is sort of true, but the real job of the Shelby which is probably barely profitable is to sell Mustang GTs to the people who come in to see the Shelby. And the real reason for the RS is to sell Focus STs.
    Could they move production of the RS to the US and produce more profitably, maybe. But I'm not sure Ford really wants mainstream production vehicles with track and drift modes. Seems like a warranty problem for sure.

    It does look like cars sales are slowing down and the ADM is quickly disappearing.

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    I call bull##t. The author's version makes for entertaining copy, but it lacks an economics understanding (like most stuff from journalists it seems).
    MSRP is no magic number. Every car will eventually sell for what it's truly worth...some sooner than others. If I'm to believe his logic, manufacturers should set sticker prices like JC Penny's does general merchandise so all can be discounted below suggested retail. "What a deal!"
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    Eh, the GTO also had the issue of being a part of a dying brand during a not so great economic cycle.

    That and we have plenty of dealers selling these cars at MSRP or below. In fact, I think they're slowly becoming the majority in some areas. Collusion is probably a real thing though... Portland Metro is ADM all over the place.
    blown68 likes this.
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    I thought it was a good article. The main problem here is quoted from the above. "The problem is that the separation between manufacturer and dealer is enshrined in franchise law pretty much across every one of the fifty states." Ford can't set prices. The other thing is that I don't see Ford bringing another Focus RS in anytime soon. 2018 will be the last year. I highly doubt they planned on making a continuing run of RS's. This isn't going to hurt the values of our cars.
    FoRS214 likes this.

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    RS Specialist Focus112's Avatar
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    If people are willing to pay it, i dont see why a dealership shouldnt​ try and maximize profit. We would all do the same thing.
    Last edited by Focus112; 04-07-2017 at 06:29 PM.
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    Quote Originally Posted by Molez93 View Post
    I call bull##t. The author's version makes for entertaining copy, but it lacks an economics understanding (like most stuff from journalists it seems).
    MSRP is no magic number. Every car will eventually sell for what it's truly worth...some sooner than others. If I'm to believe his logic, manufacturers should set sticker prices like JC Penny's does general merchandise so all can be discounted below suggested retail. "What a deal!"
    Lmfao......what's the lack of economics understanding please explain
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    I waited a year and paid sticker for my RS. 2 months later the dealer ordered a second and it arrived almost immediately! It is still sitting on showroom floor! RSs appeal to a limited following and overproduction is a possibility because of the price.
    As far as relationship between ford and its dealers, interesting how ford went around the dealers and directly to the public with the new GT! Customers get the allocation and then choose the dealer and pay list! Kudos to ford on this one!!
    MYRS likes this.

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    Oddly interesting article for me. As I own both an RS and an 06 GTO.

    The GTO I literally bought off the transport truck that was sending the last few cars back to Pontiac in 07, at a Large discount. Iirc 26k out the door.

    I special ordered my RS in California, so I paid a couple k adm. y'all can call me inpatient, or what not. But i felt the adm was worth the special treatment the dealer gave my car. I got it with 8 miles on it from people who understood this was a special purchase for me.
    I justified the few bucks to know my car didn't have some crazy showroom and test drive history.
    GoodbyeGolfR and 16FWRS like this.

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