INEOS will NOT protect order holders in the US from dealer markups

[Max]

INEOS will not be doing anything contractually to prevent dealers from marking up your order.

INEOS will NOT protect order holders in the US from dealer markups​

Order...I ordered my Grenadier and then check it for correctness and then received a contract verifying the price and the changes if any in the order...then signed it...how can an order be marked up if the prices are set...and isn't a contract a formal agreement...don't you sign a contract with the dealer...what am I missing?

 

[globalgregors]

I appreciate your enthusiasm, but I think we all do know, because this has played out over and over again across every franchised manufacturer. Tesla is the only one who's had the courage to pursue a better business model. If they don't have any developed policy on this ahead of time, dealers will be quick to mark up without consequence and it will only hurt the consumer.

Tesla capitalised as a ‘clean technology’ company that just happened to make cars. A crucial early funding contribution came from the US Government:

Dept of Energy:
In January 2010, the Department of Energy issued a $465 million loan to Tesla Motors to produce specially designed, all-electric plug-in vehicles and to develop a manufacturing facility in Fremont, California to produce battery packs, electric motors, and other powertrain components for powering specially designed all-electric vehicles.

It is only more recently that the market has reevaluated Tesla and regards it (somewhat more narrowly) as an automotive manufacturer. The combination of the grey area (auto company or something else), the sizable financial interest, and the prospect of light vehicle fleet electrification, contributed to exceptional treatment. This as I understand it in many but not all states.

From outside the US it’s tempting to conclude that the dealer model exists because you permit state reps to be purchased by corporate interests (via lax campaign finance regs). Is Tesla’s exceptional status not just another corporate interest influencing regulators? It just so happens on this occasion in the opposite direction, and perhaps at the federal level. (Again, from outside) The US system shows little care for the interests of consumers.

Or are you saying that Sir Jim needs to [courageously] bust out his chequebook and call up some congressmen and/or state reps?

 

[Max]

I have a sneaky feeling someone has opened a can of worms and slid away with them...interesting

 

[DaveB]

INEOS will NOT protect order holders in the US from dealer markups​

Order...I ordered my Grenadier and then check it for correctness and then received a contract verifying the price and the changes if any in the order...then signed it...how can an order be marked up if the prices are set...and isn't a contract a formal agreement...don't you sign a contract with the dealer...what am I missing?

 

[globalgregors]

I have a sneaky feeling someone has opened a can of worms and slid away with them...interesting

To be clear, it’s not like things are much better over here, in the grand scheme of things… Hambach production wouldn’t be happening if the French government funded the MB withdrawal in the way ours did for GM.

After $2b from taxpayers, GM let Holden 'wither'

Prime Minister Scott Morrison has expressed anger at General Motors' decision to dump the Holden brand, lamenting that $2 billion of taxpayer funds had been pumped into the automotive group.

www.afr.com

 

[Boston Boy]

I can give you an example from Ford, who has started cutting back allocations from dealers that are price gouging.
INEOS could also allow customers to move their orders, if a dealer attempts to mark up their purchase.
They could also have rules around customer-named orders and dealer-orders, and impose tighter control over named orders.
They could have a "preferred dealer" certification for dealers who commit to higher standards.

There's a lot they could do that would satisfy me. These are just a few examples. Throwing your hands up and saying, "we can't do anything" doesn't interest me. I'm interested to hear if and when they reply. I'm guessing they won't because they probably haven't developed policy about any of this yet. Until they do, I don't need another headache with dealers.

I'm not sure how I was wrong. The email said what the customer service rep said was technically right. Good faith is great wishful thinking. I am not convinced the executives at INEOS know just how disgustingly greedy and dishonest US dealers are.

this sucks and I am re-evaluating whether or not I buy a Grenadier. It is a money issue and an anger issue. How can they have you sing a contract with Ineos, but let Billgoat Gruff under the bridge (the dealers) put a mafia arm on you. How is this order and markup issue being handled in European countries? If Ineos lets buyers "own" the build and move the actual purchase and delivery to a dealer of choice that would give the buyers have leverage power with the dealer. When I bought my Touareg I bought it from a Pennsylvania internet dealer, flew down from Boston and drove it back.
I bought two Volvo wagons in their European delivery program. My financial dealings were solely with Volvo. I gave the check to the Dealer but the price was set by Volvo. Another is dealer add-ons: "Here's your Grenadier but we've added a seat protection spray and armorall on the tires and that will cost you $5000"

 

[globalgregors]

View attachment 7805498

Different specification LOL. “You’ll get what ya get, ya mug!”

 

[Solmanic]

Correct me if I'm wrong, but there is a key difference between Tesla and Ineos. Tesla OWN and operate all their dealerships, hence the central pricing & ordering. For Tesla everything comes from the mothership. By comparison, whilst Ineos are rolling out an agency model in some countries like Australia, they don't actually own the shopfronts. These are all independent, and in most cases already established dealers for a range of other products (vehicles, equipment, overlanding modification etc). They have presumably signed up to the agency model with Ineos to sell the Grenadier alongside their existing stuff in a special, branded corner of the shop, but the actual premises is still theirs.

 

[DaveB]

this sucks and I am re-evaluating whether or not I buy a Grenadier. It is a money issue and an anger issue. How can they have you sing a contract with Ineos, but let Billgoat Gruff under the bridge (the dealers) put a mafia arm on you. How is this order and markup issue being handled in European countries? If Ineos lets buyers "own" the build and move the actual purchase and delivery to a dealer of choice that would give the buyers have leverage power with the dealer. When I bought my Touareg I bought it from a Pennsylvania internet dealer, flew down from Boston and drove it back.
I bought two Volvo wagons in their European delivery program. My financial dealings were solely with Volvo. I gave the check to the Dealer but the price was set by Volvo. Another is dealer add-ons: "Here's your Grenadier but we've added a seat protection spray and armorall on the tires and that will cost you $5000"

It hasn't happened yet
Everyone keeps jumping up and down about things that haven't happened yet
Ineos haven't even appointed US dealers yet and yet those dealers are putting on markups, for orders that haven't even been placed, at prices that haven't been defined.

 

[globalgregors]

Correct me if I'm wrong, but there is a key difference between Tesla and Ineos. Tesla OWN and operate all their dealerships, hence the central pricing & ordering. For Tesla everything comes from the mothership. By comparison, whilst Ineos are rolling out an agency model in some countries like Australia, they don't actually own the shopfronts. These are all independent, and in most cases already established dealers for a range of other products (vehicles, equipment, overlanding modification etc). They have presumably signed up to the agency model with Ineos to sell the Grenadier alongside their existing stuff in a special, branded corner of the shop, but the actual premises is still theirs.

Not sure how valid it is, but much of the argument around the valuation of Tesla pivots on the idea that the vehicle is a device, via which capabilities and experiences are made available to the owner on a subscription basis (eg like a phone). Tesla in it’s language has ’stores’ not ‘dealers’ courtesy of a direct sales model.

I think the regulatory reasoning around this exception is based also on the concern that traditional retailers will discourage EV sales. EVs reduced maintenance requirements means they are less profitable to the dealership than ICEs.

This obviously won’t apply for the initial Ineos Automotive products, but perhaps things might change once they’re into FCEVs…?

 

[Sulley]

Hello, following up, I did hear back a second time to my follow up questions:

1. He cannot disclose what plans they have to deal with dealers who break that good faith. Understandable. I hope those plans exist.

2. Customers will be permitted to move their order to a different dealer up to a certain point. Obviously not once it’s on the truck. Given that many dealers today surprise you with markup at time of delivery, I don’t expect this to have much effect. It’s also more than likely that there won’t be any other dealers in one area for quite some time.

3. INEOS is not legally allowed to control prices. Ironically the laws in the US to prevent price fixing by manufacturers (to keep them from preventing dealers from discounting) are now also preventing manufacturers from preventing markup. In other words, there’s only so much INEOS can do, and they have greatly limited themselves by going with the franchise model.

Someone else on this thread made a great point about what happens if you put down a deposit, then are surprised with ADM when you go to take delivery. I hope that INEOS will give you your deposit back and do the right thing - but it’s also entirely possible that this could end up being abused by dealers to force customers into purchases at high markup. Only time will tell.

To answer your Bronco questions, the hustle works like this: dealers can only order a set number of vehicles for dealer stock, and the rest must be attached to a name. If the customer walks away, they can sell the vehicle to anybody. So dealers are surprising their customers either with huge markups, adding ridiculous financing points, ordering their vehicles with missing options, lying to them about damage, being rude to them or resorting to many other underhanded tricks to get the customer to walk away. Once they’ve done that, they can turn around and sell the Bronco at any markup they can get for it and to anyone. It’s a disgusting practice. Ford has threatened to crack down in many ways and seems to be starting to do some things in the background. One person I know of talked to Ford and they found him a replacement vehicle, sent it to another dealer that took care of him. But Ford is huge, and has the resources to clean up this mess. A company like INEOS really needs to prevent the mess in the first place, or they’ll quickly go underwater.

 

[BD1]

Hello, following up, I did hear back a second time to my follow up questions:

1. He cannot disclose what plans they have to deal with dealers who break that good faith. Understandable. I hope those plans exist.

2. Customers will be permitted to move their order to a different dealer up to a certain point. Obviously not once it’s on the truck. Given that many dealers today surprise you with markup at time of delivery, I don’t expect this to have much effect. It’s also more than likely that there won’t be any other dealers in one area for quite some time.

3. INEOS is not legally allowed to control prices. Ironically the laws in the US to prevent price fixing by manufacturers (to keep them from preventing dealers from discounting) are now also preventing manufacturers from preventing markup. In other words, there’s only so much INEOS can do, and they have greatly limited themselves by going with the franchise model.

Someone else on this thread made a great point about what happens if you put down a deposit, then are surprised with ADM when you go to take delivery. I hope that INEOS will give you your deposit back and do the right thing - but it’s also entirely possible that this could end up being abused by dealers to force customers into purchases at high markup. Only time will tell.

To answer your Bronco questions, the hustle works like this: dealers can only order a set number of vehicles for dealer stock, and the rest must be attached to a name. If the customer walks away, they can sell the vehicle to anybody. So dealers are surprising their customers either with huge markups, adding ridiculous financing points, ordering their vehicles with missing options, lying to them about damage, being rude to them or resorting to many other underhanded tricks to get the customer to walk away. Once they’ve done that, they can turn around and sell the Bronco at any markup they can get for it and to anyone. It’s a disgusting practice. Ford has threatened to crack down in many ways and seems to be starting to do some things in the background. One person I know of talked to Ford and they found him a replacement vehicle, sent it to another dealer that took care of him. But Ford is huge, and has the resources to clean up this mess. A company like INEOS really needs to prevent the mess in the first place, or they’ll quickly go underwater.

Get your contract signed by the dealer before delivery after you place the order. Standard operating procedure. The Bronco people who did that did not have issues. A couple of slimy dealers tried to mark up a signed contract but these generally got reversed by social media pressure. I only saw a couple of these. A couple of people who did not sign their contract got screwed by slimy dealers.

But if you had your dealer sign the contract you should be fine and not surprised by ADM on delivery.

Supposedly there is a lot of interest and competition for ienos dealerships. I expect they will be on their best behavior (at least the first year). You can guess that Ineos is telling them how they want them to operate if they want to retain their dealerships.

Everyone just needs to relax and see how it plays out. It is out of our control.

You can decide not to buy one if you don't like the price and terms.

 

[Max]

A company like INEOS really needs to prevent the mess in the first place, or they’ll quickly go underwater.

Only to 800mm and then they might just drive themselves away...time will tell.

 

[Shopkeep]

The flip side is if the Grenadier is not a smash hit in the US then you can go to your dealer and NEGOTIATE A DISCOUNT, something we will be unable to do in most markets (we are stuck paying full RRP/MSRP).

 

[Dso715]

I’m hoping pricing isn’t gonna go crazy but based on areas they focused on with the first demos way back when who knows. They went to Atlanta, Miami, Tampa,LA and I think Seattle. Not sure these places are 4x4 areas that would be a representation of people who use as intended. . Seems a little more Lifestyle approach. I live in Maine. Don’t think they are focused on outdoor folks thus far. Hope I’m wrong. Great work here on site. Lots of information. It’s a bit of a love hate. Sometimes I wish I was in dark.

 

[DDG]

All of these concerns and questions are unanswerable until pricing and dealer representation is announced. An American buyer will NOT have a contract with Ineos. Technically we will have to place our order to Ineos through an authorized dealer. It should be possible to know, at the time of placing that order, what the price will be. But not guaranteed. A dealer can (and have repeatedly) make an adjustment to that final price paid at delivery by adding on a “market adjustment”.
No point in worrying about any of it until we know who we are negotiating with. Am I missing anything?

 

[Reducs]

I’m hoping pricing isn’t gonna go crazy but based on areas they focused on with the first demos way back when who knows. They went to Atlanta, Miami, Tampa,LA and I think Seattle. Not sure these places are 4x4 areas that would be a representation of people who use as intended. . Seems a little more Lifestyle approach. I live in Maine. Don’t think they are focused on outdoor folks thus far. Hope I’m wrong. Great work here on site. Lots of information. It’s a bit of a love hate. Sometimes I wish I was in dark.

We're seriously thinking about moving to Maine at some point and are thinking this might be the perfect vehicle provided we can get it serviced without a drive to Boston. I'll be closely following your experiences!

 

[Dso715]

We're seriously thinking about moving to Maine at some point and are thinking this might be the perfect vehicle provided we can get it serviced without a drive to Boston. I'll be closely following your experiences!

Won’t have to go to Boston. Plenty of guys up here that are able to fix as needed. Hopefully that components that have been put into platform will be reliable based on past performance. Maine is a great place. The sign entering says” Welcome Home. The way life should be”. You just need to slow down and relax.l here Was in line tonight at store and the women in front wanted to tell cashier about her day for 5 minutes. It’s just the way it goes sometimes. They are some of the best conversations.

 

[Max]

Get your contract signed by the dealer before delivery after you place the order. Standard operating procedure. The Bronco people who did that did not have issues.

No point in worrying about any of it until we know who we are negotiating with. Am I missing anything?

I agree that there is no point worrying but BD1 is on the right course no matter who, why and where it is going to happen...sign a contract...happy motoring

 

[Sulley]

The flip side is if the Grenadier is not a smash hit in the US then you can go to your dealer and NEGOTIATE A DISCOUNT, something we will be unable to do in most markets (we are stuck paying full RRP/MSRP).

It will be. It looks like an incredible vehicle. Appreciate that they are unapologetically old school, but they’ll find their US stride in a couple iterations and then it will be unstoppable.