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Toyota Canada Access Pricing



  • rroyce10rroyce10 Posts: 9,359
    ...... >> Words like "illegal price fixing" is just self-justification to complain about the Words like "illegal price fixing" is just self-justification to complain about the price being higher than you want to pay .. << ..

            I think everyone is kinda getting off on a tangent here .. it's really all about a "price being higher than you want to pay." -or- a price you feel you "should" pay ..

            With all this info on web sites about rebates, incentives, cost, etc, etc, I feel that "some" folks are starting to think they should pay invoice and/or less for any vehicle .. I think what they are forgetting is, the manufacturers and the dealers are 2 total separate entities .. one is the builder of the product and one is the seller of the product .. if the market changes then it's the *manufacturer* who decides it needs X amount of vehicles to move by X date to carry their production runs, the dealer uses the rebate, incentive to move the *standing* inventory even faster ..

              The bottom line is, the dealer has invested His money, time, property, employee's, overhead (which is Huge) to make it work .. every dealers overhead is different, this one might be $20,000 a month and the guy down the street might be $45,000 a month, then add a little local advertising (above the factories) and it could very easily hit $75,000+ a month and thats before payroll .. Amazing, huh .?

              At the end of the month the dealer looks at his books and the inventory and decides whether or not there has been a profit made and profits are Not made on selling 50 Corolla's at $200 over invoice or 25 Sienna's at $312.57 over cost .. they know, they have studied it (or, they would be out of business by now .l.o.l.) .. dealers take the total amount of the sales and average them out, this is guy that paid $175 over invoice on the Corolla and the guy that paid $2,150 over on the 4 Runner, then they come to a figure and that figure remains a *fixed* figure (or, they go out of business) .. some months may be better than others, but that fixed # has to remain the same, that's why it so easy for Saturn ( of course it took 11 years for them to make a profit :) ..) -- if you don't feel comfortable with the price then shop around, check other sources, it's like my neighbor down the street, he feels he should pay $500 over on a MB E500, the only problem is, it ain't going to happen .. but it's his time, energy and lack of common sense .. just like by great Grand Daddy use to say ~ "Common sense isn't common" .. :-)

             Are the dealers price fixing ..? It's just based on what it takes to remain in business and still make a profit, you just can't purchase every vehicle for $200 over, period.! .. I guess what makes this particular topic amusing is, that the furniture business is off 30% and there is BUNCHES of rebates coming from the manufacturers and we don't see them advertised, there is Kazillions in rebates coming from the Boat industry and I haven't seen any ad's rolling around from Searay, I wonder why that is .l.o.l.

                  Have a nice day ...

                         Terry :)
  • landru2landru2 Posts: 638
    The only thing I am "defending" is the ability of a business to set the price for its product at whatever they want. The consequences for setting it too high is lost sales. As has been posted in a few links already - it has been determined that what Toyota is now doing is NOT against the law. And they apparently are not losing sales.

    IMO, your argument about what you paid holds no water. So what if you paid $3000 less than a customer in B.C. For all you know, you may have paid $3000 less than the guy down your street. He bought under the same system you did. Congratulations to you? To bad for him? Is your point that Toyotas should only sell for whatever the lowest amount paid is? Ontario's system is apparently fair for you but I wonder how your neighbor feels about it?

    The scrutiny and settlement were justified because Toyota WAS contravening competition laws by FORCING dealers to comply with Access pricing by inflicting penalties against dealers that did not comply. To the satisfaction of the courts and the consumer group that brought the charges, Toyota dealers no longer have to fear penalties from Toyota and are free to negotiate IF THEY WISH.

    Access Toyota dealers have now had a couple years experience and are selling more than ever. If the Access system were abolished tomorrow why would dealers suddenly lower their prices? How can you make someone negotiate with you?
  • asawasaw Posts: 54
    $3000 below invoice is a great deal. Honestly, if I can even 1K below, I would be pretty satisfied.

    landru, why doesn't buying for $3000 less hold any water? I think he got a great deal. Maybe we are speaking from different perspectives (you being a sales guy, while we are "foolish" buyers)

    As far as ganging up on landru, I doubt we are doing that here. We just have different opinions: I think we should pay as little as possible, he wants us to pay full price. Just different perspective, I guess.

    The fact is, even after the $2.3 million settlement, the Access dealers in BC are still not willing to negotiate. True, we cannot make these people negotiate, but we can buy from someone else, like a broker. I'm not trading in my camry, so I can't haggle there.
  • landru2landru2 Posts: 638
    The Porsche dealers around here will not negotiate either. But I'm not holding my breath that anyone can force them to. If I don't like it I can buy something else. Even Porsche has plenty of competitors.

    I have no problem at all with someone wanting to pay as little as possible. I do have a problem with people expecting the government to make that happen for them. And I do have a problem with someone that feels that a Toyota is some essential product they can't be denied.

    It really strikes me as funny that even though some people might feel Toyota is diabolical for setting up Access Toyota and is "milking" their customers, that people still want to reward them by buying the products.
  • It sounds like the Access Price is well above TMV. That's a hoot. Talk 'market forces' out of one side of the mouth and fix the price well above market out of the other side. It ain't about principle; it's about profit.
    No pressure for the dealer to hold to the Access Price? Yeah, right. 'Yoda Canada may not be able to take overt steps to force compliance; but options for covert pressure abound, and then there's the pressure the dealer organization can exert. Just imagine how difficult it would be for a 'negotiating dealer' to trade inventory with Access Pricers, to get expeditious delivery on stock from 'Yoda Canada, to provide warranty coverage to customers, etc.
    The dealer coalition holds together well enough to maintain an Access Price? What does that tell you? It tells me that there's plenty enough cohesion to maintain ethical standards - if the dealers want ethical standards as much as they want the Access Price.
    Price competition as an incentive for efficient dealership operation? LOL, that's gone.

    All of the above is theoretical or 'macro'. At the practical level . . .
    I think Landru is right; a major option for the buyer is to walk to another brand. Honda, Ford, et al have gotta be loving Access Pricing. A major competitor supporting an inflated price is win-win for them. The buyer still takes in the shorts to some degree, however, since 'the other brand' has less price competition.

    Alternatives for the individual buyer -
    Work the trade-in angle. Don't own a car to trade? Buy a $500 ragged out beater, and see if a dealer eager for a sale at the end of the month will allow you $3K for it on trade.
    Get outside the Access Price market. Use the net to buy a car and the price spread to finance the trip to go get it. Sell your trade at home; since the local market is price fixed, there'll be plenty of demand.
    Use the force of depreciation to your advantage. Look at Saturn, for example; not a great value new, IMO, but a 3-4 year old Saturn has taken such a large depreciation hit that it makes for a great buy.
    "There are no problems, only opportunities."
  • landru2landru2 Posts: 638
    which dealer will be able to give more money for a trade? The one selling at the Access price or the one that sells for $3000 less? If Mr. 3 Grand Less gets $3000 less for his trade is he getting a better deal?

    Which market will have higher used Toyota prices? An Access market or a non-Access market? Remember, if the whole concept is inherently unfair it shouldn't be to anyone's benefit. Right?
  • landru2landru2 Posts: 638
    that someone can conceptualize a dealer cabal smart enough to maintain some kind of unspoken conspiracy but yet dumb enough to pay $3000 for a $500 "ragged out beater." LOL.
  • asawasaw Posts: 54
    The government is responsible for the well being of its citizens. And if it means investigating into some unethical conduct by companies, be it Toyota or Ford, then I think they should do it. I have absolutely no problem expecting the government to do what they have to.

    Would I think some people have a problem because they really like Mercedes, and cannot do without it? No, absolutely not. They'll buy whatever they want, but I'm sure they'll like to get the best deal possible. Unless, of course, if you are made of money.

    It's not the cars that are diabolical, it's the company that sells them. To circumvent that, I guess we'll have to do what rivertown suggested. We can always get good deals, if we look and try hard enough, and not take any manufacturer suggested prices at face value. That's the point I'm trying to make to potential Toyota customers out there.

    The day I pay full price is the day I have $50 billion bucks in my portfolio.

    When I bought a home entertainment system recently, and is able to shave off more than 500 bucks, it SURE feels really good. Why? Because if I didn't persist in my tactic, I surely would have paid full price, like what landru would have liked. Note that there's only a certain brand and model of television that I liked, and if I couldn't get it at Store A, I would certainly have gone to Store B, but for the same brand and model.

    It's just that for Toyota, I don't have the luxury to shop around, unless I go through other means, like a broker.
  • asawasaw Posts: 54
    For those who have bought Toyota cars and trucks through brokers, or some other means, please give us a hand here by stating the model and price, and through which "other" company. If need be, you can send the information to my email address.

  • Obviously, the Access Price dealer should be able to give more for the ragged out beater; the profit margin on the new car is artifically supported.
    Why would he do it?
    1) He can afford to.
    2) To make a volumn bonus.
    3) To make a more attractive deal without running afoul of the Access Price process. LOL, his books show the new car was sold at the Access Price, even if he's willing to shave his profit margin.
    There's always competition, whether it's restrained or not.

    So, the buyer does best buying outside the Access Price market and selling in it. Simple as that.
  • landru2landru2 Posts: 638
    "So, the buyer does best buying outside the Access Price market and selling in it. Simple as that."

    Yes, I agree. But I thought the Access market was not good for consumers?

    "The government is responsible for the well being of its citizens."

    So making sure you don't pay too much for a new Sienna is a government responsibility? At least I see where you are coming from now.
  • asawasaw Posts: 54
    Boy, you like to twist things around.

    The government watches out for its people by making sure that monopoly does not have a detrimental effect. I'm sure your Econ 101 taught you that?
  • landru2landru2 Posts: 638
    I know Canada is widely regarded as a democracy in name only. And I know that it is fashionable these days to abstain from personal responsibility, but to claim that it is the government's role to look after its(!) people by saving them money on a Toyota is too much.

    Monopoly? You mean you have no alternative but to buy a Toyota?
  • asawasaw Posts: 54
    Which would you rather buy?

    A) Ford Taurus at $25K (non-negotiable hypothetical Ford Access price)
    B) the same Ford Taurus at $23K (negotiated)

    Let's focus on the best price you (a consumer, as opposed to a salesman) can get, as opposed to all those mumbo jumbo that was posted.
  • landru2landru2 Posts: 638
    I would also rather pay $.72 for gas in Alberta than the $.85 (or whatever it is) in Newfoundland.

    I'd rather pay $300 than the $700 that a Sony Receiver will cost me.

    I also would rather pay half the income tax I pay now.

    So, yes, I'd rather pay $23K than $25K for a Taurus. But why stop at $23K. I would way rather pay only $20K for that Taurus.

    Of course, wishing for something doesn't make it so.

    Now let me ask you a question. Do you see Saturn's price policy as "illegal" like Toyota's? And if so, why do you think it has been around for over 10 years?
  • asawasaw Posts: 54
    I thought you were going to pick (A). LOL. I guess you could be ok then. So you see where I'm coming from, as far as getting the best price (possible).

    Saturn implements a nation wide pricing (set by the manufacturer). Toyota's Access Pricing is set by individual dealers. (collusion)
  • landru2landru2 Posts: 638
    You can't negotiate on a Toyota or a Saturn. Why aren't Saturn buyers up in arms over what a Saturn could cost if they could negotiate?

    So you'd be OK with it if Toyota set the price nation-wide? How would that help you get a cheaper price on a Sienna?
  • asawasaw Posts: 54
    then I won't have a choice then, do it? That's provided if the dealers still don't negotiate. It has to come straight from the top (meaning Toyota Canada) that all prices are now permanently fixed, then I might rest my case. Which really really sucks!

    Either I would then:
    1) Buy through internet or broker
    2) Buy another brand.
  • landru2landru2 Posts: 638
    You would accept it if Toyota Canada set the pricing at a fixed level. Yet the reason the Competition Bureau investigated in the first place was because Toyota Canada was forcing dealers to conform to a fixed price.

    So it's not the fact that the price is being fixed that is the problem. You just need it to be fixed the same for everyone. I wrote in an earlier post that the fact that Toyota didn't just roll out the program nation-wide was the problem. The fear that someone else just might pay less is a strong motivator.

    And all this rhetoric about "collusion" and "illegal price fixing" is just a smokescreen for the fact you just don't like the price you have to pay. After all, it sounds a little contradictory to expect the government to ride to the rescue when this same government has declared the policy to be legal.
  • dbgindydbgindy Posts: 351
    How is it a monopoly when you can buy another brand?
    landru I now know the problem. You personally need to fix your government now. :-)

    Terry as usual YOU ROCK!
  • asawasaw Posts: 54
    Perhaps Saturn's prices are more fair to consumers. I don't know because they have never negotiated before. With the resale value of Saturn I guess we know what kind of car it really is.

    But the fact that someone could cross the border to Ontario from Quebec and buy a Toyota vehicle for thousands less means that the prices are absolutely "inflated".

    That is my problem: "Inflated" artificial price.

    Now, if they fixed the price lower, no one would complain. But that's not how collusion usually work, right, landru2?

    Now let me ask you another no-brainer: What would happen if Toyota USA sets up an Access Pricing system all over the states? How much uproar do you think this would cause.
  • landru2landru2 Posts: 638
    Saturn prices are more "fair" to consumers? Please. Your whole argument is that negotiated prices will be lower than fixed prices. So how can a fixed Saturn price be "fair" to anyone?

    Just face it. You don't like what the price of a Toyota is and calling it "illegal" makes you feel justified in complaining about it.
  • "But I thought the Access market was not good for consumers?"

    Actually, according to economic theory an Access Pricing type market is not good for anyone in the long run, because it is an inefficient market due to limits on the free movement of price. That's just theoretical, though, however true.

    As a practical matter, the buyer seeking a negotiated price can have that - by introducing a trade-in into the deal. It's just a little more complicated than a straight-forward negotiated price deal.
  • landru2landru2 Posts: 638
    that wants to sell his '02 Camry privately so he can buy something else, say, a new Maxima. Won't higher new car prices translate into a higher used car price for him? For anyone selling a used Toyota, an Access Price market should be a big benefit.
  • I don't think that's necessarily true. The guy selling the '02 Camry almost certainly takes a bigger depreciation hit than a guy selling an '02 Accord, because the Camry's original price is artifically supported.
    Would he get more in an Access Pricing region? Probably so, but not necessarily so. It's better to sell under Access Pricing, but you've got out-of-region cars and other brands competing for the same used car dollars. But even if the used price is some better, if he bought there in the first place he'd be more bucks behind at the end of the day.
    Best of all is to buy in a free market and sell under Access Pricing.
  • landru2landru2 Posts: 638
    the money for Toyotas, is the price artificially supported? How come nobody believes that regular market forces (competitive makes) will work to make Toyota prices reach an equilibrium in the market?

    How can anyone possibly claim that prices are artificially too high when a product is selling in record numbers?

    Imagine if every 6 months Toyota raised their prices $500. Wouldn't a point be reached where the increased price would not make up for the lost sales? Isn't that how virtually every consumer product on earth is priced?

    Maybe it's just me, but we're not talking about people freezing to death because they can't afford to heat their homes. We are talking about perhaps buying a Honda Odyssey instead of a Toyota Sienna (Oh, the hardship!). I just can't get my head around the fact that some people feel that the government should intervene so that they won't have to pay more for that Sienna than somebody 2000 miles away. Especially while people are buying these things in record numbers already. Isn't that basic supply and demand? The supply is low relative to the demand so why would prices fall?
  • Question. I know you are a Ford man and really have no background to answer this, but please just indulge me and speculate. Your arguements in this thread are very good and make sense, while I see the other sides points too.

    I think it was said on here that toyota started access pricing in canada in 2000. I assume that toyota sold cars in canada before 2000 under some other non access pricing system, similar to the way you sell fords and that most cars are sold in the US (where the buyer and dealer negotiate the price). My question is this, Why do you feel that toyota felt the need to move to access pricing in Canada? Please do not bring up the baloney they have on their website about having the customer focus on dealership quality, etc.

    My guess is that they did not do it to lower prices to buyers. Was there something wrong with the old way of selling cars to dealers and then letting them sell them however they wanted?

    I think in the long run asaw is just the tip of the iceberg. There are probably many more turned off customers and that number will only grow. There are plenty of other good makes, like Honda. Are there any numbers on Toyota vs Honda sells since toyota started access pricing? I can understand exactly where asaw is coming from. i would suggest to him to buy another make, perhaps a mazda or honda product, or nissan quest. I felt exactly like he did about US toyota dealers a few years back. they were arrogant and their pricing was awful, compared to other brands. But times have changed in the US. A toyota with rebates? Yes almost evey model they sell has a rebate. So that fits in nicely with your market comparison. The market would not support full msrp prices when other makes had such huge discounts. The market would not even support invoice prices, they had to start offering rebates. Only time will tell for access pricing in canada.
  • grandtotalgrandtotal Posts: 1,207
    How come nobody believes that regular market forces (competitive makes) will work to make Toyota prices reach an equilibrium in the market?

    I do, but then I also recognise that if Access pricing comes to Ontario I shall still buy a Toyota even at a premium, but still reasonable, price.
  • grandtotalgrandtotal Posts: 1,207
    Why do you feel that toyota felt the need to move to access pricing in Canada?

    Now that is a very good question. After all Toyota Canada does not stand to benefit from this in any way. In fact the reverse may be true if you believe that this may result in lower numbers of sales even though those sales will each be more profitable for the dealerships. The dealers may benefit but not Toyota Canada.
  • "How can anyone possibly claim that prices are artificially too high when a product is selling in record numbers?"
    That looks like a very good point, but it assumes that acceptance of a price is validation of some sort. Well, acceptance of a price is indicative of something, just not necessarily of some sustainable or valid balance between supply and demand or value and cost. That's one of the problems with anti-competitive markets; prices become 'artificial', and at some point there's a piper to pay.

    "How come nobody believes that regular market forces (competitive makes) will work to make Toyota prices reach an equilibrium in the market?"
    That's basically a rediculous statement (no offense intended); one 'regular market force' has been constrained (not eliminated), i.e. price competition among amongst Toyota suppliers. That makes for an inefficient market. So, while there is already an equilibrium, it's an equilibrium in an inefficient market. According to market theory, that ends up costing everybody in long run. The folks hurt in the short run are the buyers.

    Inefficient markets can persist, via 'artificial' constraints; they are just costly. If your point is that one 'regular market force' (brand competition) remains, I agree. If your point is that the Access Price market is free to respond to the interplay between supply and demand, that's just not true on the face of it.

    Free marketeers have driven their markets into the ground time and time again, using market theory as justification. Thus, the need for regulation to restrain anti-competitive practices. Unfortunately, it often takes some hunky damage to bring that regulation to bear.

    "Let them eat cake."
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