EXCLUSIVE: A group of Subaru dealerships in Melbourne are removing haggling from the new car sales process.
Seven dealerships run by Trivett Retail in Melbourne have rolled out fixed prices on the back of a trial started in May 2020.
Dubbed the ‘Price Pledge’ philosophy, prices are calculated based on the average discount given to buyers on a particular model, along with available stock.
When stock levels are good, prices are likely to be lower.
Trivett (itself part of Inchcape, which imports Subaru, Citroen, and Peugeot to Australia) says prices will change regularly under the new model.
It’s trying to limit adjustments so they happen no more than once a month.
Because it only operates seven Subaru dealers, Trivett can still be undercut on price by other dealerships or dealer groups without fixed prices.
Trivett is willing to lose some sales from customers who want to haggle, but believes most people prefer the clarity of fixed prices.
The Trivett-run Peugeot and Citroen dealer in Melbourne won’t also adopt fixed prices, a spokesperson has confirmed.
“Customers are responding well,” a spokesperson for Trivett told CarExpert.
“The next step is to embed Value My Car into in-store and online customer engagement platform. This compliments the best price, first time Price Pledge philosophy, but expands the same ethos to include trade-in cars.
“This uncomplicated, simple and customer-centric approach to retailing is Trivett Retail’s first significant step towards a realignment with our customers.”
Melbourne was chosen for the fixed price trial during the second wave of COVID-19 lockdowns in 2020, described as a “once in a lifetime opportunity to test, learn and refine” the process.
The seven Melbourne dealers currently operating with fixed prices are Docklands, Doncaster, Mentone, Glen Waverley, Berwick, Essendon, and Werribee Plaza.
Trivett also operates dealers in New South Wales and Queensland as well, and has indicated it will roll out the Price Pledge elsewhere if it’s a success in Melbourne.
Trivett’s network of Subaru dealers is following Honda and Mercedes-Benz Australia in offering fixed prices.
Come July 1, 2021, the whole Honda Australia network will operate under an agency model where prices are fixed, and dealers act as sales agents for head office.
Under the current dealer sales model, Honda Australia head office orders cars from Honda head office and sells them wholesale to individual dealers.
Each dealership is a franchise, and each owns its own stock. When you buy a Civic from a Honda dealer at the moment, you’re technically buying it from that dealer rather than from Honda Australia itself.
Dealers are able to negotiate with customers on price in search of a sale, and can compete with one another within the Honda network.
The change to an agency model will see Honda Australia own all of its stock.
Dealers will no longer be able to undercut each other on price – all cars will instead wear a non-negotiable price tag set by Honda Australia, and dealers will be rewarded for each sale by head office.
When the change is made, Honda sales staff won’t be judged based on their volume. Instead, the focus will be placed on customer service.
Mercedes-Benz will make the leap in 2022, having trialled fixed prices on the EQC and EQA electric cars.