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Global Economy

With threats against high car prices

The surcharges that many US car dealers charge customers when buying a new car are a thorn in the side of car manufacturers. Anyone who sells new Ford vehicles well above the manufacturer's recommended retail price must expect severe consequences. The Wall Street Journal reports that Ford CEO Jim Farley announced this in a conference call with analysts.

Corporations fear for their customers

According to Farley, Ford knows exactly which dealers are selling their vehicles with high markups. This is the case for around ten percent of the nearly 3,000 Ford dealerships in the United States. Dealers who stuck to the increases should no longer be supplied with models that are in high demand.

General Motors had already threatened its dealers with similar steps in January. Car manufacturers fear losing customers in the long term as a result of the high prices.

Dealers and customers are allowed to negotiate

According to research by market analysts JD Power, price increases on new vehicles in the US ranged from $700 to $10,000 last year. A spokesman for the US Automakers Association, NADA, said the price increases were the result of current low supply and high demand in the market. In principle, dealers and customers are free to negotiate the price of a vehicle among themselves.

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