Dealer markups are neither a new phenomenon nor unique to Ford. Inventory shortages across the industry over the past year prompted stores that sell numerous brands to tack on “market adjustment” charges of varying sizes on many scarce nameplates.
“It’s the blessing and the curse of a free market and capitalism,” Karl Brauer, executive analyst at iseecars.com, said in an interview. “If you’re really creative, you can almost always find a way to make a buck on something people want to buy.”
Galhotra said Ford’s internal pricing data shows that more than 90 percent of its dealerships are charging around sticker price on key new models.
“The issue we’re trying to address is around a very small part of the network,” he said, “and we’ll work with them to get it right.”
Jack Madden Ford in Norwood, Mass., initially planned to charge an extra $2,500 on Lightnings but removed the fee after customers complained, owner Jack Madden said in an interview.
“The pushback was pretty strong,” he said. “We collectively decided that we’d sell them for whatever the retail price is and we’d live with that. A lot of people are angry about it, and management at Ford feels it’s the wrong thing to do.”
Madden said the store planned to charge the markup because of low inventory. The dealership sold 77 vehicles in December and received only 10 vehicles from Ford for the month, he said.
The automaker has warned that the chip crisis likely will linger through the rest of this year and is pushing a custom order-based system to make up for the lack of available inventory.
“If the market in general is not supplying the base-level demand the buyers want, everything goes up in price, and in that environment the hot-ticket cars are that much more desirable,” Brauer said. “The forces on demand versus supply going on right now are only adding to the potential for this kind of behavior.”
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