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

[bigleonski]

If so, that would be a big dent in their claim of service never being too far away - especially in Australia.

Not so sure @Krabby. On Google they seem to be around the place but I can’t recall ever driving past one. I think here they must be private branded operators that are just part of a Bosch network? The Ineos dealers all have their own service centres and I’m sure Ineos will come up with some other arrangements. A bit more difficult that just looking for a Toyota sign over here, but Ineos will sort something out.

I hope

 

[bigleonski]

I had no idea. It’s pretty easy to be ethnocentric as an American so it never really crossed my mind. There are a variety of mortgage options here and we opted for a 30-year fixed interest rate.

Yeah we also have very different legal structures around housing loans as well, hence our financial system didn’t fall into the mess you guys did during the GFC. For example if it all gets too hard we can’t just toss the house keys back to the bank and tell them it’s their problem. If we default and the house is sold with a debt remaining, we’re responsible for the balance - full recourse. You’d think that was hard on the owners, but it instills a different mindset, and Australia has the (or close to) highest home ownership in the world. Home ownership is something very high on most Australian’s priority list. Housing prices are high though and in today’s market it’s getting harder and harder for our kids to achieve.


Oh, is should have mentioned we have 30 year loan terms for housing, it’s just that fixed rates generally only run 5 years max.

 

[Krabby]

There are so many unknowns for NA - in fact 99.9% of our situation is unknown - but next month much Information should be forthcoming. My wife is bothered at the thought of a multiple hour drive to get to a dealership for servicing but I hope that won’t be the case for us. We’re on the NJ coast and I think there should be at least one relatively local dealership. But for folks in Iowa, 4-5 hours could be a reality.

 

[bigleonski]

Yeah your demographic spread is wider than ours - probably 95% of our population clings to within 100km of the coastline. But the problem with that is if you’re 2,000km from the coast you are pretty much on your own or a good drive away at least.

 

[DCPU]

If so, that would be a big dent in their claim of service never being too far away - especially in Australia.

The Ineos statement that "We’re looking to expanding this network as we continue to aim for you to be within 45 minutes/50 km of a fully accredited IAL workshop." doesn't really stand up for the UK. I'm over an hour/90km from my closest IAL workshop; and Ineos have indicated they're not looking for more locations.

 

[bemax]

The longest you can fix an interest rate in Australia is 2-3 years

That’s hard.
In Germany we usually fix the rates over min. 10 years especially for mortgages.

 

[Flewks]

The Ineos statement that "We’re looking to expanding this network as we continue to aim for you to be within 45 minutes/50 km of a fully accredited IAL workshop." doesn't really stand up for the UK. I'm over an hour/90km from my closest IAL workshop; and Ineos have indicated they're not looking for more locations.

For the Aberdeen area in Scotland we have the option of Inverness or Edinburgh. Both 2 hours min. travel. West coast residents may have to travel further.

 

[Deleted User Account.]

That’s hard.
In Germany we usually fix the rates over min. 10 years especially for mortgages.

Australia definitely incentives both saving and not buying too much house on loan.

 

[AZGrenadier]

That would definitely lead to people buying more within their means. I think 30yr fixed mortgages has been the norm since the signing of the Declaration of Independence. That may be a stretch though. It definitely lowers payments and allows for significant housing inflation. Problem is so many people don’t understand the impact of interest rates.

 

[DaveB]

For the Aberdeen area in Scotland we have the option of Inverness or Edinburgh. Both 2 hours min. travel. West coast residents may have to travel further.

No intelligent person could expect a dealership within 45 minutes of every potential buyer.

 

[DCPU]

No that's why for Oz Ineos have relaxed the aim to 1hour/100km...

 

[IG_in_AZ]

No intelligent person could expect a dealership within 45 minutes of every potential buyer.

View attachment 7809287

Clearly that sign is on the wrong side of the road! We'd have to read it in our rear-view mirrors.

 

[DaveB]

Clearly that sign is on the wrong side of the road! We'd have to read it in our rear-view mirrors.

It's also in metric so only the other 99% of the world would understand it.

 

[curb-optional]

INEOS has no choice. US dealer franchise laws, state by state, are written to protect the financial interests of dealers. Period. If INEOS tries something else, they are subject to long and costly lawsuits. It is unrealistic to expect anything different for a new, small player in the US auto market.

I know it's unrealistic: but why can't Ineos lease space, hire staff, and *presto* have US based sales and service centers? Is an auto manufacturer prohibited from owning a physical dealer & service center network as well? I know what is probable: lawyers ruin all inexpensive and simple ways of conducting business, and instead find ways of making whatever you want to do 5x more expensive and needlessly complex, as ultimately it's within the business of law to manufacture complexity and then profiteering off of it. Let's make dealership laws really difficult to navigate then charge billable hours to interpret it all! Oh well, if dealers get greedy and try to charge lots extra for a new IG, SUVs will pile up at their dealerships. Then consumers will not drive them away without discounts.

 

[Krabby]

Is an auto manufacturer prohibited from owning a physical dealer & service center network as well?

YES. Automobile manufacturers cannot sell cars directly to customers, hence they cannot own a physical dealership. Certainly in NJ and I believe for many other states as well.

 

[curb-optional]

YES. Automobile manufacturers cannot sell cars directly to customers, hence they cannot own a physical dealership. Certainly in NJ and I believe for many other states as well.

thanks. I am actually OK with the dealership model. I'm not worried about price gouging. When the Bronco came out, it was huge news, and ford has so many dealers, all likely clamoring for product. By contrast, this is a small production foreign car model. If a dealer gets greedy, they could lose the sale. And, if they exploit the brand, even if Ineos can't sell directly, can't Ineos drop the dealer from being an authorized seller? If they price gouge, they get dropped? That would seem to keep the dealer within a boundary on pricing.

 

[FourLew2]

INEOS has no choice. US dealer franchise laws, state by state, are written to protect the financial interests of dealers. Period. If INEOS tries something else, they are subject to long and costly lawsuits. It is unrealistic to expect anything different for a new, small player in the US auto market.

How does Tesla do it?

 

[pioneerofthenile]

I'm not even that worried about this.

with all the problems people have reported they may not sell that well at msrp, let alone adding adm.

it's already expensive and priced many out. unless Arnie is seen driving around in one, like he did with the hummer around y2k, unknown brands that have exhibited electronic and build problems costing 6 figs won't fly out the door.

 

[vjmvjm]

How does Tesla do it?

They can't sell in all states. They've been involved in lawsuits in several states, which cost a lot. They find loopholes, like placing showrooms in Native American reservations in New Mexico. If Ineos volume was similar to Tesla, then they might be able to do the same. But I understand that they are limiting annual US sales to 6,500 (that's what I remember, or maybe it was 7,700) to qualify for exceptions for federal regulations (small volume manufacturers). Worldwide production is initially projected to be 25,000 to 30,000 worldwide. Tesla monthly sales in the US alone are greater than the projected annual worldwide sales of the Grenadier.

 

[40man]

They can't sell in all states. They've been involved in lawsuits in several states, which cost a lot. They find loopholes, like placing showrooms in Native American reservations in New Mexico. If Ineos volume was similar to Tesla, then they might be able to do the same. But I understand that they are limiting annual US sales to 6,500 (that's what I remember, or maybe it was 7,700) to qualify for exceptions for federal regulations (small volume manufacturers). Worldwide production is initially projected to be 25,000 to 30,000 worldwide. Tesla monthly sales in the US alone are greater than the projected annual worldwide sales of the Grenadier.

The small volume limit is 5,000 or less per calendar year. It isn't automatic. A manufacturer has to apply to be covered on an alternative standard. Over 5,000 and the entire line would have to meet CAFE averages, and since the IG would be far below that standard, they'd pay thousands in penalties for every one sold.

Until they get a hydrogen and/or electric model, sales in the U.S. will be limited, which makes the dealer expansion rollout difficult. So I don't expect expanded service centers any time soon.