FCA trying to counter Demon dealer markups with allocation
Posted on June 29, 2017
When the original SRT Hellcat was released, dealerships south of the border made a lot of money by marking up what was one of the most anticipated cars at the time. This meant buyers paying way over sticker price for their car. FCA want to avoid all that for the Challenger SRT Demon. Which is why they are introducing an allocation system.
The idea is to provide the product buyers want at a price they expect. The SRT Hellcat, in some states were being bid on by buyers. The lucky winner finally paying way over the odds for the car. That is only good for the dealership, not the customer and certainly not the reputation of FCA. That all changes this time round.
Demon dealer allocations
As you would expect, Car Nation Canada played no part in such bidding wars and wouldn’t have entered into them with the Challenger SRT Demon either. The good news is that we won’t have to. FCA have put some criteria down for dealers to be eligible to stock the Demon.
U.S. dealerships wanting to stock the Challenger SRT Demon have to:
- To be eligible to order a Challenger SRT Demon, dealers must have sold more than one SRT Hellcat in the previous 12 months.
- Allocation will be based on a 60/40 mix of sales performance of SRT Hellcats and Chargers/Challengers.
- Dealers may order only the number of Demons they are allocated.
- To qualify as a verified sold order (which establishes the price paid), an acknowledgment document must be completed and signed by the customer and dealer and be notarized.
We expect the same or similar criteria for Canadian dealerships wanting to sell one of the 300 Challenger SRT Demon being allocated up north. FCA have yet to announce their plans for here.
Dealerships that qualify for allocation will then need to sell close to or below MSRP to be prioritized for production. Once you buy your Challenger SRT Demon, a copy of the order acknowledgement has to then be sent to FCA. If the price paid was on or close to MSRP, production will be allocated. If the price paid was above MSRP, production will be scheduled but not until after all other orders have been completed.
The idea is to prioritize those Challenger SRT Demon sold at the expected price. Any dealership inflating the price will have to explain why there will be a significant delay to production and convince a buyer they need to wait the extra months to get their new car they paid over the odds for.
It is a fair system as long as the pricing is set fairly. I don’t yet know what FCA will be charging dealers for the Challenger SRT Demon so cannot comment on the fairness of the system. In theory however, it seems to be a good idea.