Team-BHP - View Single Post - GM cars, price details, & How do dealers make money?

tsk1979 · 3rd May 2006, 11:45

One word, spare parts.
A part which the company gives to the dealer for rs 20000, is sold to customer for 48000.
Case in point. Original Bosch alternator(Skoda) is available in open market for 18000rs. Now if you go for the dealer price, they would have got it for 15000rs. The cost passed on the user is 48000rs.
Also look at labour charges. They make a lot of money there.
Consumables : They buy oil in bulk. So it costs them around 60% of what the user pays

Every time a car is sold, its more than just the margin, its the whole contract. Why do companies void warranty if service is not done from Authorized dealers? The reason is that the dealers will revolt if such a thing is ever done.

Now come to think of it what is a service. Change the oil, attach the computer to see any oroblems(99% no problems), and clean air filter if required and then wash the car. Bill 700rs for just the labour. Heck they even make money on free services due to consumables.

Spare part pricing is profitable even in economy cars. A tata indica glow plug, which is actually a glorified heater costs close to 300rs. check in open market, glow plugs of similar quality cost 120rs or so. The dealers get them for around 70-80rs/plug.

3rd May 2006, 11:45	#15 (permalink)
tsk1979 Team-BHP Support Join Date: Feb 2005 Location: Noida, New Delhi Posts: 8,839	One word, spare parts. A part which the company gives to the dealer for rs 20000, is sold to customer for 48000. Case in point. Original Bosch alternator(Skoda) is available in open market for 18000rs. Now if you go for the dealer price, they would have got it for 15000rs. The cost passed on the user is 48000rs. Also look at labour charges. They make a lot of money there. Consumables : They buy oil in bulk. So it costs them around 60% of what the user pays Every time a car is sold, its more than just the margin, its the whole contract. Why do companies void warranty if service is not done from Authorized dealers? The reason is that the dealers will revolt if such a thing is ever done. Now come to think of it what is a service. Change the oil, attach the computer to see any oroblems(99% no problems), and clean air filter if required and then wash the car. Bill 700rs for just the labour. Heck they even make money on free services due to consumables. Spare part pricing is profitable even in economy cars. A tata indica glow plug, which is actually a glorified heater costs close to 300rs. check in open market, glow plugs of similar quality cost 120rs or so. The dealers get them for around 70-80rs/plug. __________________ Reclaiming.....!