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Hyundai, Genesis, Subaru warn their dealers about markups

Six weeks ago, word got out that Ford's VP of sales for the U.S. and Canada wrote one of those "It has come to our attention..." e-mails to the automaker's dealer body. The VP's problem was dealers trying to get reservation deposits for the Ford F-150 Lightning well above the official $100 fee. The tomfoolery resulted in interactions "with customers in a manner that is negatively impacting customer satisfaction and damaging to the Ford Motor Company brand and Dealer Body reputation." Two weeks later, GM told its dealers to cut out the reservation gaming and the markups on the 2023 Chevrolet Corvette Z06, banditry that's been going on for two years. Two weeks ago, Ford was back at it, this time about markups on the Bronco. Last week, Asian automakers swept into the melee, with Hyundai and Genesis, Subaru, and Infiniti writing letters to their dealers to deliver some variant of, "Stop pissing off the customers." Automotive News reported an SVP at Hyundai Motor America and the COO at Genesis Motor North America sent letters to their dealers expressing disappointment at "certain pricing practices which, if left unchecked, will have a negative impact on the health of our brand." One of the practices mentioned was dealer markups, another was the bait-and-switch, with dealers advertising one price then charging a higher price once the customer showed up at the lot. The letters acknowledged that dealers are separate companies to the automakers and have the right to set their own prices. The automakers cannot interfere with that; their leverage is distributing allocations and perks such as advertising support and financial incentives. So, like a movie boss letting the protagonist go on a technicality, the brands wrote, "we cannot stand idly by watching the actions of the aforementioned dealers undo all the efforts we collectively have put into making these brands what they are today." Jalopnik got tipped to a letter Subaru of America CEO Thomas Doll sent to that brand's dealers. Doll's polite yet insistent tone was the result of a letter a loyal Subaru owner sent to the automaker's VP of Customer Advocacy. In the market for a third brand-new Forester, the owner said they encountered a "tax" labeled a "Low Inventory Surcharge" of as much as $6,000, putting the Forester out of reach.

2015 Subaru BRZ tS First Drive [w/video]

The Subaru BRZ is a brilliant driver's car: lightweight, rear-wheel-drive, tactile, nimble and fluid at speed. In terms of qualities that allow for dazzling point-to-point performance, it lacks only power and intense mechanical grip. In the US, options for tuning the BRZ to amplify its strengths or diminish its weaknesses are mostly found in the aftermarket. In Japan, meanwhile, driving enthusiasts can start with the factory-tuned model you see above: the BRZ tS. Designed and built with the engineering prowess of Subaru Tecnica International, the limited-edition tS is tuned for track competence over and above that of the base model. The intent of the tS wasn't lost on me as I stared over the front fender towards Turn 1 at Japan's Suzuka Circuit. Not just a proper place to test STI's claims of increased handling brilliance for its BRZ tune, but a perfect one. Suzuka is challenging – fast and technical in equal measure – and a playground for sorting out the margin of improvement from the standard that BRZ I know so well. Wait, Why Am I Here? Of course, Subaru didn't invite me and a half-dozen other motoring journalists to Japan for an academic exercise in JDM hotness. We were there at the behest of STI, as a first step in what will undoubtedly be a deliciously drawn-out expansion of the performance brand in North America. STI started life as the motorsports division for Subaru-parent Fuji Heavy Industries. But chances are good that you, like me, first encountered the three-letter-logo as a Cherry Blossom Red punctuation mark at the end of a WRX road or rally car. The world came to know STI through Subaru's 1990s WRC dominance and prominence in the Gran Turismo franchise. But outside of Japan the significance of the initials was known more as the designation of the top-dog Impreza, rather than a motorsport and performance engineering unit. The company is set on changing that and building STI into a performance brand that's as easily recognizable in America as M and AMG are today. That message was delivered a body in the STI Concept car at the New York Auto Show earlier this week, but as I mentioned then, we don't expect Subaru to turn up with a production-ready BRZ STI next year. First STI will deploy its parts catalog to the US, removing the half-hearted Subaru Performance Tuning parts business in the process. Next, according to a vague timeline presented in Japan, Subaru will offer a car like the tS to US customers in approximately 18 months.

How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.