The things car makers do for love… Car companies in Germany traditionally offer journalists discounts of about 20 percent on new vehicles. Until now, this offer's been restricted to one car per year. Ford's cutting that clause: Automobilwoche reports journalists can now buy as many popular models for a bargain price as they want, and enjoy. Or, more to the point, flip 'em on the market for a few percent profit, and repeat. Other makers are expected to follow suit. Historically, journalists are considered a small but influential group– "opinion leaders" in the marketing argot. "Just like taxi drivers: not a large audience, but they are important, so they are worth some special consideration," says a German VW dealer. How much consideration? VW's generosity is worth 15 percent for new cars and 10 percent for pre-owned. The quoted dealer thinks VW's vig may soon reach Ford's levels: up to 25 percent, depending on model. Mercedes-Benz also grants 15 percent for journos. Porsche is parsimonious, offering no more than 10 percent. Most makes are (for the time being) stricter than Ford: Mercedes requires a minimum holding time of six months, and allows no more than two purchases per year. We're looking into the situation stateside, but we know Ford offers scribes the Ford employee discount…
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Wow, news to me.
Are these transactions publicly posted anywhere?
If such a situation DOES exist in the United States (i.e Big discounts for journalists) will this be declared when reviewing cars or any news articles?
Our local Ford dealer recently had Customer Appreciation Day. Buy one Excursion, get one free. No one took them up on the offer.
Does this apply for trucks? On top of the 50% discount I dug up (given to the general public)?
KatiePuckrik:
If such a situation DOES exist in the United States (i.e Big discounts for journalists) will this be declared when reviewing cars or any news articles?
It DOES exist. TTAC hereby requires that any journalist who accepts a special discount on a purchase from a manufacturer declare it to us. They will then be prohibited from reviewing that manufacturer’s products, OR their interest will be declared.
RoweAS, I know you know that the Excursion hasn’t been available on Ford dealer lots for several years… you meant Expedition, right? (and if it was true I’d be there in a heart beat, to replace my 2000 Expe… for the haters out there, we tow a livestock trailer with it).
MK: I know of no journalist who has ever declared this. I do know of some who, despite possible preferential treatment, do not hesitate to write about problems they have with their own cars — Gavin Green of CAR is one who comes to mind. But in general, the whole thing smells highly fishy to me.
While we’re at it, here are some more examples of good ol’ German corporatism.
Politicians of more than local importance can expect a 20% discount.
If you work for a supplier of an auto manufacturer, you will also get a good price. This sounds innocuous but I think it’s notable that for decades, you could not really do business with Daimler if you drove a foreign-built car. So you were expected to take advantage of whatever’s on offer. Daimler for the longest post-war time had the company-car market cornered with this kind of technique.
To end with a positive note, people with disabilities can also expect around 20%.
So by the time you add taxes, tag, registration fees, etc., the 20% discount pretty much leaves you with the printed sticker price, right?
Wild Bill, it was just a sarcastic remark. I was just pointing out how dire the situation is and how slowly inventory is being moved. I actually love Ford and hope they will find their way out.
BlueBrat: certainly not; the discount is off net.
This is like payola. It is absolutley SHAMELESS. For years I have been reading these blogs, watching the smug German car fans trotting out these German mags and their reviews as some sort of proof of German car superiority. If Ive said it once, Ive said it a thousand times, I dont trust the bias of German car mags.
And now I know why.
What a racket. These are bribes, payoffs, German mfrs are essentially paying for PR. Up to 25%, we’re talking potentially tens of thousands of dollars. It would be unbelievable if it werent so easy to believe.
Thank you for the insight into this.
Martin,
das ist nichts neues. American manufacturers have been very clear about showing up on their property in anything but an American-badged vehicle. Early in my career, I was warned to not show up at a Ford factory in my sister’s Honda CRX Si. There were signs everywhere warning people of the dire concequences if they did. Never mind if I showed up at a GM factory driving a Geo…now that would be allowed.
Anyway, wasn’t aware that journalists garnered such nice perks. Maybe I should dust off my desire to write!
Sorry, but I don’t really see the issue here. From what I understand based on the small blurb here (sorry, can’t read the original in German), this is a blanket offer to any journalist. Not a limited offer to select journalists. If you select the group that benefits, then I suppose you can expect that those selected would give you preferential treatment . . . or else they might not be selected next time. But if you offer it up to any and all in a particular class, then you’re just as likely to provide this to a person that will write a critical review. In fact, it seems that the offer is to generic ‘journalists’, not ‘automotive journalists’ . . . not sure why it’s a problem to give the sports columnist or the crime beat reporter a discount.
If this is done as an effort to influence a person who’s job is to write unbiased reviews of your product, that’s bad. But if it’s an effort to get your product in the hands of a bunch of people who are constantly out-and-about the town, speaking with lots of people, perhaps seen as ‘local celebrities’ . . . then I see no foul.
I might be interested in knowing if my local restaurant reviewer used a coupon that he clipped from the local paper when he was reviewing a nearby pizza place, but I would not consider it any kind of an ethical issue.
dkulmacz,
you understand it correctly and you have a point — auto makers are not bribing anybody in a direct manner.
It still looks bad to me, for several reasons.
Firstly, the situation lacks transparency; the public is not aware that journalists are getting preferential treatment. (The public may know that journos get treated to expensive trips and meals, but a car is a different kettle of fish).
Secondly, I would say that Ford crossed a line when they turned journo-friendliness into an invitation to buy and flip cars.
I am for full disclosure. If JJ Cramer owns a stock he is writing about, he has to say so. When Lieberman gets invited to a press bash, he says so. When a business journalist writes about GM, the public should know whether he gets his Escalade at 25% off. A car journalist who pays less than the public does for his daily transport should disclose this too. I am glad that this is TTAC policy.
Wow – I can’t believe I didn’t know this was the norm here in the US…
It makes me want to sift through my old issues of Car & Driver, match it up with state vehicle registrations, and potentially go punch somebody.
Now I see how Jeremy Clarkson can afford his “Exotic of the Moment”.
It seems like in two years he’s gone from a SL, Ford GT, to a Lambo Gallardo. I guess it certainly isn’t hurting on resale.
Clarkson wrote in his column that he returned his Ford GT to Ford, and that he has never personally profited from his job as an automotive journalist in that way.
Although I hate to see anyone’s life turned upside down by the IRS, at what point does a car discount for certain people become INCOME?!?
US automakers also have supplier discount programs. Not sure if the transplants do.
I can get you “journos” a 20% discount on a PT Cruiser if you’ll write nice things about me.