Re: \"Viper deal miffs dealers\"
Viper deal miffs dealers
Dodge pre-sells all '03s, and retailers bemoan lost profits
By Diana T. Kurylko
Automotive News / October 14, 2002
DETROIT -- In a marketing goof that Dodge dealers say has robbed them of thousands of dollars in potential profits, the Chrysler group has pre-sold all 1,500 '03 Vipers by giving existing owners the exclusive rights to buy one.
The pre-sale late last year offered about 10,000 Viper owners a certificate guaranteeing them the right to purchase the 2003 model, the more powerful SRT-10 convertible. The 1,500 certificates were gobbled up within two weeks.
The action has hammered down transaction prices for the redesigned Viper by creating a closed, buyer's market for the supercar. Because buyers know that dealers can't sell to anyone not holding an official certificate, many are demanding prices barely over dealer invoice for a car that typically would generate at least a $7,000 profit.
The SRT-10 has a sticker price of $80,795, including destination. Dealers buy the car from the Chrysler group for at least $7,000 less.
"They prostituted the whole distribution system with this deal," said Ken Zangara, chairman of the Dodge dealer advisory council and owner of Zangara Dodge in Albuquerque, N.M. "This program circumvents the dealership, although I suppose they claim it's legal because we're going to do the vehicle delivery."
'It's not fair'
Jim Arrigo, whose Arrigo Dodge in West Palm Beach, Fla., sold about 16 Vipers a month when the previous model was hot, says he has decided not to sell the 2003 model at all.
"I don't want to be in the position of saying to a customer, 'No, I won't sell you a Viper at that price,' " Arrigo said. "This program isn't fair to us dealers. It's not fair making me get into a bidding war with the dealer down the street."
Some dealers charge that the certificates also are being traded in an unauthorized secondary market on the Web.
"The people with the vouchers (certificates) see this as a chance to make a profit. They want to make my profit, and Chrysler set this up," said Tom Moser, owner of Moser Dodge in Cincinnati, which sells two Vipers a year.
Dan Fitzgerald, owner of Fitzgerald Dodge in Laconia, N.H., says he has seen the vouchers sold on eBay for up to $10,000.
"And that's just the right to buy a Viper, not a vehicle. No one has been delivered a Viper yet," said Fitzgerald, who has sold some 1,300 units since the car's 1992 launch.
"It's bad enough that in 2001 and 2002, with people knowing the new model was coming, I made only as much on a Viper as I did on a Neon. Along comes the 2003 model, and some people think we'll start to give away cars."
Dodge policing program
Jim Julow, Chrysler group vice president of motorsports and SRT marketing, said the program was intended to reward loyal customers, not harm dealers.
"We wanted to offer it (the SRT-10 Viper) to our most ardent supporters first," said Julow, who created the program last year as head of Dodge marketing.
Julow admitted that the certificate program has caused ill will among dealers, but said most wouldn't be eligible to receive the '03 Viper anyway. Because vehicle allocations are based on sales volume, "fewer than 500 dealers out of 2,984" would get the new Viper in the first place, he said.
To avoid speculation in the certificates, Julow said, Dodge "purified the list in late June and contacted every owner" and will continue to make sure that certificate holders are the ones taking delivery.
About 300 of the 1,490 orders placed have been scheduled for delivery, he said. The first cars should be going to owners within a few weeks.
But Wes Lutz, owner of Extreme Dodge & Dodge Truck, a standalone Dodge dealership in Jackson, Mich., said the certificate program has robbed him of the first hot vehicle the franchise has had in years.
"As a dealer, it's devastating to me. There is a great demand for that car, and there is no availability," he said. "I have two longtime Dodge customers who don't own a Viper and want the new car, and I have to tell them 'I can't get you a car.' "
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