A thought to ponder (SRT vs. GT-40 and price related stuff)

[Venom Lover]

The "Price announced on SRT-10" thread got me to thinking, especially a comment made by Snakester. I was contending that with MSRP of $83K for the SRT, the GT-40 starts looking like an ever-more-attractive alternative (Ford claiming/hinting MSRP < $100K). Snakester said something like "Yeah, but the street price for the GT-40 will be $160K." I couldn't argue with that too much based on what I heard when I asked around with big Ford dealers about my placing a deposit on one.

So, ponder this. Both the SRT and GT-40 will be 500 bhp (though both may come out slightly higher). Performance wise, this contest could go either way, depending on how much the GT-40 actually weighs once it's produced. Yet people seem eager to line up to pay well over $100K (including dealer gouges) to get the GT-40, whereas dealers are signing up for deals very near invoice for the SRT.

What does this tell you?

It tells me that there is a lot more hype around the GT-40 and apparently a lot more interest. I just think once you're talking about a price point of over $80K MSRP (and thus over $90K out the door), you're competing in a market where people who can afford the SRT will find the GT-40 (or Turbo 996 or Ferrari 360) a plausible (and often preferable) alternative.

Just an observation! Let the flames begin (Ford will never produce the GT-40, it's only 500 bhp on paper, etc.)....

--Mike

 

[Steve Ferguson]

Mike no flame here, but lets call a spade a spade.

The reason the SRT/10 is coming in at a reasonable price and not an inflated one such as the GT40, is because WE the current owner base have been given the opportunity to do so with our certificates! You need to remember that those of us who purchased the early RT/10 had no method of assurance, other than agreeing to high charges in many cases. But when we had vouchers for the GTS, that whole inflated pricing went away. That was one of the main reasons Dodge came to our assistance, to make certain that we did not get the shaft twice!

Remember, the dealers dictate WHO can buy a GT40, but WE dictate who can buy a SRT/10.

 

[FASTRNU]

Who knows whether the price announced in the previous thread is real or not? I'll wait until it is officially announced before I form an opinion.
Dave

 

[Craig 201 MPH]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Venom Lover:
Steve,

Fair enough, and I do appreciate what VCA has done for us, so I don't mean to sound ungreatful to the VCA. On the other hand, even with a cert program, why are dealers charging nominal $$ over invoice? The cert program itself wouldn't have prevented dealers from charging MSRP, or even above. Are dealers just being "nice" to us? I find that hard to believe (with the exception of Pemberton, of course

).


<HR></BLOCKQUOTE>

The reson dealers are only charging a bit over invoice is because if you don't like thier price you can simply go elsewhere. Also, dealers (good ones anyway) are apperciative of return business. Our 2 SRT's will be #'s 3 and 4 that we have bought through our dealer along with our truck and various other vans etc... We get a great price of invoice + $500 on all the Vipers we have purchased. I'll also mention this dealer is a 2 hour drive from us but is worth it. Before we placed our order with our dealer we just called around for the hell of it. The cheapest price we got was $2500+ invoice. I think the only people that are going to pay that are sadly misinformed and should have found a better dealer. If you want to see what dmand really is for this car, buy a hemmings motor news in august and see what the asking prices are going to be on SRT's for sale. Then buy one every month after that and see how many are left and what people paid for them, I think there will be a fair lot that go for $110,000+ to porsche and ferrari owners who just have to have one.

Remember this? a $50K car for $100K it will happen. This ad is from a 1992 dupont registry.

You must be registered for see images

 

[FASTRNU]

Venom Lover:
I cannot say I would be happy if the price is the figure being discussed, but I will buy the SRT10. I am number 2 on Bill Pemberton's list for an '04 SRT10.

I just remember all the BS rumours on the Corvette boards regarding the ZO6 and the 50th anniversary edition. The ZO6 was rumoured to have well over 400 hp and be in the neighborhood of $60K. The story on the 50th anniversary edition had it with a 427 cubic inch engine and Viper beating horsepower.

The ZO6 had just 35 hp more and was just $3-$4K more than a coupe and the 50th anniversary edition is just a tarted up standard model with no additional performance besides the new shock arrangement.

I just want to keep an open mind in case we are pleasantly surprised.
Dave

 

[Venom Lover]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Craig 201 MPH:
The reson dealers are only charging a bit over invoice is because if you don't like thier price you can simply go elsewhere. <HR></BLOCKQUOTE>

Well, this is exactly my point. It's all supply and demand. Say Dodge makes 1500 SRTs per year at $83K MSRP, while Ford is making 1000 GT-40s per year at $99K MSRP. If the GT-40 is selling at $10K over MSRP and the SRT is selling at $7K under MSRP after the first-year hype is over, it means demand is much higher for the GT-40.

 

[C O D Y]

Estimated number of GT/40s to be built in '03 = 100 to 200

Estimated number of Vipers to be built in '03 = 1,500 to 1,800


Total GT/40s built up to '03 = 100 to 200

Total Vipers up to '03 = 16,000+


Would the prices be different if the numbers were the other way?

 

[Venom Lover]

Steve,

Fair enough, and I do appreciate what VCA has done for us, so I don't mean to sound ungreatful to the VCA. On the other hand, even with a cert program, why are dealers charging nominal $$ over invoice? The cert program itself wouldn't have prevented dealers from charging MSRP, or even above. Are dealers just being "nice" to us? I find that hard to believe (with the exception of Pemberton, of course

).

Anyway, we shall see in MY04 what the SRT is selling for relative to MSRP. If the GT-40 comes out in MY03 and runs for 3 years, I bet they continue to sell at over MSRP through 2005. I bet the SRT stays below MSRP in MY04. I know, this is all just speculation. I'll pay you a nickel and confess publicly to my stupidity if it turns out otherwise.

REVVER,

There have been enough reputable sources stating the price will be "under $80K" for me to conclude that the previous post was not BS, even though the guy who started the thread blatantly refused to divulge his source. In my opinion, the previous thread bore the bad news that "under $80K" was before gas guzzler tax, which I did not expect. I'll mail you a nickel as well if the last thread is very far off from truth. So how do you feel now about paying twice as much as your Vette for an SRT? Still seem worth it?

<FONT COLOR="#ff0000" SIZE="1" FACE="Verdana, Arial">This message has been edited by Venom Lover on 07-01-2002 at 12:34 PM</font>

 

[dancojax]

There is only one sure way to increase the going price of anything, and that is limit the quantity and availability.
The first Vipers were widely reported in the press and every red blooded American Male (and a few females) just HAD to have one. Those with more money than others wanted bragging rights to be first to have one (first in nation; first in state; first in county; first in town; first in neighborhood; etc.).
As they became more available, the price came down.
As to the SRT RT/10, just look at the previous threads regarding individuals claiming to hate the car, and only getting one to sell it at a profit.
Hopefully, most Dodge dealers are honest and will actually deliver the SRT to the person who ordered it, but I don't think there is any law requiring them to do so. In any event, the number of SRT's is limited, but ANY dealer could order one (on behalf of a certificate holder) and so each of us could 'bargain' with any number of dealers for the best price.
When the time comes that a Ford dealer can only order a GT 40 on behalf of say, a bonefide member of the Mustang Club, and each member can order from any dealer he wishes, the GT 40 will sell for close to invoice. (unless the dealers engage in 'restraint of trade').
How much would a Picasso sell for if they were for sale at the newsstand? How much would a Dusenburg bring if it was still in production? How much would a C2 big block be worth if there were 300 for sale in Hemmings instead of 2?
Just my thoughts.

 

[Venom Lover]

Cody,
I hadn't really thought about the effect of previous production on demand for the new vehicle. In truth, I'm not sure that matters much since both the GT-40 and SRT are pretty much redesigned from scratch. As for 2003 production numbers, as I understand it, the plan is for a late MY03 release for the GT-40, which is why there will only be a couple hundred units. But the production rate is something like 1000/yr, not too terribly different than the SRT. Certainly not an order of magnitude different. So, yes, I expect MY03 prices to be heavily biased by skewed production numbers, but MY04 is where we will start to see what the steady-state demand and price looks like.

 

[2charmed]

Hi Mike,

Been to the track lately?

I know I would love for the SRT-10 to be less expensive also and I wish there were a coupe now. I like the performance numbers and your point of the Gen II GTS having the power of the SRT with minimal mods is well taken, but what if you put minimal mods on the SRT-10? With minimal percentage gains we could expect
525-550hp fairly easily I would think?
As for the price - if you dare to compare the SRT-10 to the Shelby at 150 -160K I'd take the SRT-10 anyday and wait for a coupe and still be in for less! (I would not even consider the shelby, just a comparison)
I too love the look of the GT-40 the retro look is what I most like about the current GTS. At 100K and very limited production
of the GT-40, I may consider this as an option if the coupe doesn't come or is a let down. It would be two to three years before I would consider the GT-40 after the hype subsides and they have a few under their belt.

Regards,

2Charmed

 

[Mike Brunton]

Venom,

I think there are a few missing pieces to the puzzle of why dealers are selling at or close to invoice.

First, Dodge has not said anything about the allocation program going forward for Vipers. I had heard before that it may change, and some folks expected it to change. Given this, the dealer has a BIG incentive to get as many SRT orders as he can, to put himself in the best possible position for future orders.

Second, what is the DISincentive to sell SRT's at invoice? Dealers all know these cars will be ripe for gouging at some point - so why not sell a bunch now and make a little money, and become a big SRT dealer later and make a lot of money?

Third, if a given dealer does not agree with 1 and 2 above, there are a whole other group of them that will, and hence the price will be set by these other dealers willing to deal.

My local dealer (Herb Chambers Dodge) offered to order my SRT through them... the price? They said they will not commit to a price, but they're looking at about $20,000 over MSRP but that could change (upwards, most likely). I was flabbergasted. He gave me all kinds of BS reasons why I should go with him - I literally laughed at him and called Pemberton the next day.

 

[Venom Lover]

Hi, Steve!

Haven't done any road racing for a long while. I've been to Carlsbad a few times this year -- running some personal best ETs, so I'm pretty happy about that!

Anyway, I agree, I'd take the SRT at $76K over the GT-40 at $160K. But if I could get a GT-40 near MSRP, then it becomes a very different story! I agree with you on the look.

Mike,

I buy your "jockeying for allocation" theory as a small contributing factor to dealers' willingness to deal on the SRT.

I just don't buy your second and third points, however. The SRT will not be ripe for gouging if demand for it in 2004 is the same or only slightly more than the demand for Vipers today. Dealers will be lucky to see MSRP in that scenario. It is not a foregone conclusion that demand will be much higher for the SRT. Clearly the price is going up, and according to basic economic theory, that means demand will go down unless the product is substantially improved. I guess we'll know in a year or so what the market really looks like.

With respect to your third theory in particular, I'm sorry I just don't get it. Maybe I'm ultra-slow with business concepts, but I believe dealers will charge what they think they can get for a product. If they all know demand far outweighs supply, there will be universal gouging, even by dealers whom we don't think of as charging over MSRP. True the magnitude of the gouging may be lower at the upstanding dealers, but they will still gouge you. And to a large extent, I don't blame them. It's called capitalism.

Anyway, don't kid yourself. If in late-2003, Dodge dealers still have way more deposits going down on SRTs than they have cars to sell, you will see prices rise above MSRP, even from the Woodhouses, ViperWizards, and Roanokes of the world. I'm just saying when that doesn't happen, and you see prices still below MSRP on the SRT for MY04, that's because the demand is just weak, not because there's one lunatic dealer out there holding everyone hostage by selling below MSRP. That's just not how it works!

BTW, I read your Herb Chambers story when you posted it a while back. Funny stuff!

<FONT COLOR="#ff0000" SIZE="1" FACE="Verdana, Arial">This message has been edited by Venom Lover on 07-02-2002 at 01:42 PM</font>

 

[Mike Brunton]

It's Ok if you disagree with me, everyone is wrong at some point or another

What I meant on the second point, is just that there are dealers out there selling slightly above invoice. Given the SRT has the whole cert program, the large dealers lost their leverage of "but I can actually get you a car, that other guy can't". Us cert holders shopped around and locked in invoice+ prices. If I were a dealer, why WOULDN'T I sell SRT's for just above invoice? I have no leverage with buyers... but making a little money on there cars today may get me more allocation in '04 and then I can make alot of money later.

On the third point, I simply mean that we cert holders were bombarded with ads from people willing to take our orders for invoice+500 (or even less). It's a VERY tough sell for a dealer when you don't have the leverage to say "yeah but that dealer can't get you the car - he has no allocation!" AND in addition your customer has offers from other dealers for many thousands lower. I can't imagine someone actually paying over MSRP for the car... and there was such a short window to order these cars, that I don't think the market had time to really settle - it was a mad dash to the dealer of choice (usually the lowest priced) when the certs came in.

Personally, I went with Woodhouse because I know they will take care of the car when it arrives, and I won't have to deal with any games. If Woodhouse wanted MSRP+ and my dealer wanted MSRP-, I'd be going with my local dealer

.