Does a 1 price strategy work in the automotive industry?

24 januari 2018, Paul

Penske Automotive says it doesn’t and they can unilaterally prove it!

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Whatever research you read, you usually read the same thing. The 2017 customer wants speed and transparency. If you look at the different generations that buy cars nowadays, it is noticeable that the generation up to 45 years of age wants transparency and does not want to negotiate a price, but wants to pay a fair price, also in the automotive industry.

Penske Automotive

Therefore, they experiment a lot in the States with a so-called one price store, or a dealership in which you cannot negotiate and the price is the price. Even if you offer 200Euro less, you will not get it. In the article below you can also see that they have tried this at one of the largest dealers in the US, Penkse. What is striking is that it was not just done, but it was done with sellers who did not have any experience in the automotive industry, and therefore were not ‘infected’ with the normal course of business in a dealership. They could work in this Toyota dealership after just two months of training.

The results were that they saw no improvement compared to comparable dealers in terms of volume and / or profit (1 price does not mean the gross price) compared to the normal way of doing business and they have stopped doing so. What the article does not show, and what I was very interested in, are the results they accomplished with the customers? After all, you play the long or short game. After all, if the customers did appreciate the way in which they were given a higher loyalty, wouldn’t it have worked, even if you don’t see an uplift in the short term? I am curious who has an opinion about this? And could this also work for us?

Orginal article

About Paul de Vries

Paul de Vries became a Key Automotive Spokesperson at eBay (Marketplace) after selling Nieuweautokopen.nl to eBay back in 2015. Paul is the founder and CEO of the #DCDW Academy and the presenter of the #DCDW Podcast. He is also a by dealers and importers frequently asked speaker in the online automotive industry. Paul is the winner of the prestigious Lighthouse Award 2016 in the U.S.! `Lead the Way op de digitale snelweg’ is Paul’s new book, which can be used as a guide in the online automotive industry. More information is available at: DCDW.nl.

hoofdfoto Paul