Dealer asked for ADM to move up list

[TomE]

I do want to point out that I have been saying this all along only to be met with criticism that “the lotus dealers are more trustworthy”. The fact is dealers are in this business for a profit and this is not a surprise at all to me. Look at it from their point of view. If they are allocated 20 cars, they make another $200k in pure profit. I also find it hard believe lotus is upset or disappointed, there is plenty they could have done to prevent this.

The fact, Lotus did nothing to help keep track of where customers are in line and left it up to the dealers to keep “lists”. Nobody had visibility to the lists, nor where they actually were. I’m sure we can all provide 100 things lotus could have done to prevent this so to say they are disappointed is rubbish.

What on earth is to gain from turning any dealer in? What is lotus going to do if the person loses their allocation? Build them a special car?

It sucks but this is pretty common in the US. For example, if you order a New G-wagon right now, you pay 100k over sticker and it’s a 2 year wait.

Also, the “communication” from lotus and some people here are all over the place. For example, lotus and insiders such as TomE said that you are guaranteed a FE as long as you order before March. Apparently, that is wrong. The US is getting 700 FEv6 units. This is probably what the dealers are saying and using as leverage to get their extra cash. Yet, another thing that Lotus can fix by just communicating!

Lotus is in the business to sell cars, they did and they are happy. I can assure you they are not disappointed or they could have or would have done something about it. I don’t doubt some people in the company are disappointed, but not lotus as a company.

I’m sorry but you are wrong and like many are assuming Lotus has absolute control over what the US dealers do. Consumer regulations in the US specifically prohibit manufacturers from “interfering” in how cars are allocated and sold. This is why manufacturers have to sell cars to dealers according to a formula and then dealers sell their (now owned by the dealer) cars to customers. The various contracts between Lotus HQ, Lotus USA and each dealer cover this. This is also why you see the same issues in the US with other brands where demand exceeds supply.

Lotus does have data on every deposit declared by US dealers and the customer who made it - provided the dealer submitted it when asked. What Lotus can’t do is use this information to dictate to dealers about which customers get what when and at what price - that’s illegal. Lotus didn’t make those rules, US consumer protection did.

I agree there has been a massive change of tack on V6 FE numbers and information I was sharing last week about March is now no longer true. So yes my credibility and everyone’s understanding gets messed up by Lotus changing tack. I’m not happy, but probably not as unhappy as US people waiting in line for cars.

As I’ve said before, I believe Lotus the company and its senior people do want to treat people as fairly as they can … within constraints that at times are not in their control, as is the case with the US market.

 

[SloAlfa]

So far. On this forum. That has shared. That we know of. There will be

I suppose walking away is an alternative, but I do want the car. And hence my question if anyone else has been asked. Making up numbers, maybe they only got 20 cars for 2022 and #10 dropped out and he's asking everyone >#21 to buy into it. I didn't ask for that kind of clarity. I do agree though that #21 on the list should then get the car at MSRP.

He did clarify I can stay put in line and get my car at MSRP.

It does smell nefarious though - that he's willing to prioritize an ADM customer, and hence push an earlier order into 2023.

I would add that if there was complete transparency... like I was actually paying the ADM in exchange for an order# / allocation with Lotus corporate, I probably would have bitten. But the offer was just to move up in the opaque "dealer list".

Anyways, it seems like I got my answer: I seem to be the only guy who has gotten this call.

Im 100% that you are not the only one that has and will get this call. You are the only vocal one so far. Plus, if anyone has been offered and taken up on it, they will obviously get immediately challenged on here about their moral compass and be labeled a unethical person by some. Lol.

I say you do what you want, it’s your money and your life. If you feel the need to blame someone, blame the dealers and lotus and go drive your new car.

 

[SloAlfa]

I’m sorry but you are wrong and like many are assuming Lotus has absolute control over what the US dealers do. Consumer regulations in the US specifically prohibit manufacturers from “interfering” in how cars are allocated and sold. This is why manufacturers have to sell cars to dealers according to a formula and then dealers sell their (now owned by the dealer) cars to customers. The various contracts between Lotus HQ, Lotus USA and each dealer cover this. This is also why you see the same issues in the US with other brands where demand exceeds supply.

Lotus does have data on every deposit declared by US dealers and the customer who made it - provided the dealer submitted it when asked. What Lotus can’t do is use this information to dictate to dealers about which customers get what when and at what price - that’s illegal.n Lotus didn’t make those rules, US consumer protection did.

I agree there has been a massive change of tack on V6 FE numbers and information I was sharing last week about March is now no longer true. So yes my credibility and everyone’s understanding gets messed up by Lotus changing tack. I’m not happy, but probably not as unhappy as US people waiting in line for cars.

As I’ve said before, I believe Lotus the company and its senior people do want to treat people as fairly as they can … within constraints that at times are not in their control, as is the case with the US market.

For the record, I never said they had absolute control. I said they could have communicated better or thought of better ways to control this and still stay within the consumer laws. Im sure all of us could think of several ways. Again, I’m sure the few people you get to talk to are disappointed but I can assure you Geely and the private equity firm is not. Kidding yourself if you think they do.

 

[cdn_alien]

Not sure I follow... Wouldn't the person in slot 3 always be the person in slot 3? If spot #20 gives up their place in line, it's not like the dealer offers up their slot for $10k and then moves them to position #1.

I think we're all speculating on the acceptable ways in which this situation may be ethically acceptable. But the OP didn't ask, and we don't know if a single slot came open to create this opportunity, or if this is ADM is being asked of many other customers.

 

[Porter]

This dealer is unethical and no one should trust them. I strongly encourage the OP to disclose the identity of the dealer that made this request.

All ADM "markups" are requests for bribes. Period. This is the only industry in the United States where retailers are able to hold consumers hostage on goods by demanding an extra arbitrary payment in order to agree to complete a pending transaction. The US CFPB and FTC should be involved in this, I have no idea why they aren't taking action on this problem yet.

Think of it this way... the ADM isn't the same on every car and it isn't a percentage of product value. It's an arbitrary number being invented on the spot by sales management. Can you imagine if you were buying a house, and the closing agency looked you up and down and said, "We'll finish this closing paperwork for you today, but only if you pay us an extra $50k on the deal." People would burn them to the ground.

 

[cdn_alien]

There are two ways that Lotus could deal with this situation that I have not heard much discussion on.

I know that the US Dealers Association has a lot of pull, and operates practically as a unionized monopoly. Lotus says they have a team of people evaluating the possibility of direct selling to the consumer, much like Tesla does at shopping malls. This would cut out the dealers altogether, and would be a big undertaking by Lotus because now they need a service network that the spurned dealers may not be interested in. As of LOG back in Sept 2021, I do not believe that Lotus has made a decision on this yet.

The second way to eliminate this problem, of course, is for Lotus to increase production. Lotus Managing Director has always said that if demand is high, they may consider a second shift on the production line. If the supply met the demand, there would no longer be any need for deposits, ADMs would go away, we would all buy our cars at MSRP, and Lotus would be one step closer to profitability.

I've simplified the situation, but they are in the realm of possibilities.

 

[Nova]

@Nova personally I value integrity over shiny objects but that's just me.

I am certain, absolutely certain, that you sacrifice "integrity" over shiny objects on a daily basis. This is one of the fundamental requirements of being an adult in polite society. Of course, there are limits, and people will make judgment calls on what they let slide and what they won't. If you would have behaved differently in this situation, good for you; but your claim to moral superiority is rather subjective.

 

[Porter]

I know that the US Dealers Association has a lot of pull, and operates practically as a unionized monopoly.

I think the term you are looking for is "cabal".

The dealer association is grossly unethical. They openly collude together to strongarm the manufacturers and abuse consumers in dozens of different ways. They're able to do that only due to hyper-protectionist regulation that they have bought and paid for in state legislatures over a period of many years. It's disgusting.

I fully appreciate the difficult position that Lotus has been placed in as a result of the inordinate and artificial market power exercised by dealers in the United States. The right response is to entirely refuse to fulfill dealer allocations if they charge customers any form of ADM. That's what Ford and GM are actively pursuing right now, because the dealers are destroying their brand image and customer goodwill by cynically abusing customer trust.

 

[Nova]

This dealer is unethical and no one should trust them. I strongly encourage the OP to disclose the identity of the dealer that made this request.

All ADM "markups" are requests for bribes. Period. This is the only industry in the United States where retailers are able to hold consumers hostage on goods by demanding an extra arbitrary payment in order to agree to complete a pending transaction. The US CFPB and FTC should be involved in this, I have no idea why they aren't taking action on this problem yet.

Think of it this way... the ADM isn't the same on every car and it isn't a percentage of product value. It's an arbitrary number being invented on the spot by sales management. Can you imagine if you were buying a house, and the closing agency looked you up and down and said, "We'll finish this closing paperwork for you today, but only if you pay us an extra $50k on the deal." People would burn them to the ground.

That's not really an equivalent scenario. The closing company does not actually hold title to the home. If a title company did that, the seller/buyer would simply go to a different closing company to transact the sale. In this case, the dealership holds ownership of the car. The equivalent scenario would be if the home seller suddenly started asking for more money than the listing price - which does happen all the time, especially if it is a multiple-offer situation. Remember, there is no sales contract at this point and everything is still a negotiation.

 

[TomE]

There are two ways that Lotus could deal with this situation that I have not heard much discussion on.

I know that the US Dealers Association has a lot of pull, and operates practically as a unionized monopoly. Lotus says they have a team of people evaluating the possibility of direct selling to the consumer, much like Tesla does at shopping malls. This would cut out the dealers altogether, and would be a big undertaking by Lotus because now they need a service network that the spurned dealers may not be interested in. As of LOG back in Sept 2021, I do not believe that Lotus has made a decision on this yet.

The second way to eliminate this problem, of course, is for Lotus to increase production. Lotus Managing Director has always said that if demand is high, they may consider a second shift on the production line. If the supply met the demand, there would no longer be any need for deposits, ADMs would go away, we would all buy our cars at MSRP, and Lotus would be one step closer to profitability.

I've simplified the situation, but they are in the realm of possibilities.

Correct on the direct model. Lotus didn’t have the bandwidth to tackle this at the same time as totally overhauling the UK dealer network and distribution model. It’s a much more complex issue in the US.

Current info being shared on allocations and timeframes is already based on second shift starting by end of this year. They now have to work out if they add a THIRD shift. Demand has been completely unprecedented - and for a car with no press drive reviews yet. Amazing, but also of course frustrating for people keen to get cars and not wanting to wait too long.

 

[ksegg]

Pardon my French.

But fuck everything about ADM's. It's vile and needs to be outlawed in the U.S.

 

[Porter]

That's not really an equivalent scenario. The closing company does not actually hold title to the home. If a title company did that, the seller/buyer would simply go to a different closing company to transact the sale. In this case, the dealership holds ownership of the car. The equivalent scenario would be if the home seller suddenly started asking for more money than the listing price - which does happen all the time, especially if it is a multiple-offer situation. Remember, there is no sales contract at this point and everything is still a negotiation.

Consumers don't go to dealers wanting to buy a car from the dealer. The consumer wants to buy the car NEW from the manufacturer whose logo is on the sign. The dealer is inserting themselves into the middle of that transaction by legal fiat. It boggles the mind that they are even able to sell cars as "New" when an ownership transfer has already occurred. It's a self-evident fiction.

To be more blunt... they are a bridge troll in a transaction between two other parties, and are forcing an ownership transfer first from the manufacturer to themselves, and then to the consumer. NEITHER of the other two parties wants this. It's absolutely undesired by everyone other than the dealer. The only reason it's not considered tortious interference is because the NADA have rigged the game legally in their own favor through corrupt influence on state laws.

The entirety of the franchise dealer system in the United States needs to be upended through changes to federal law, and until then no auto dealer should ever be given benefit of the doubt as a trusted party in any transaction.

 

[TomE]

For the record, I never said they had absolute control. I said they could have communicated better or thought of better ways to control this and still stay within the consumer laws. Im sure all of us could think of several ways. Again, I’m sure the few people you get to talk to are disappointed but I can assure you Geely and the private equity firm is not. Kidding yourself if you think they do.

I’d be genuinely interested to hear what you think could be done differently by Lotus to control this and stay within the regulations and contracts. Plenty of people at Lotus have looked at this and don’t have a short term solution. The long term solution is the wholesale and complex overhaul of the US dealer network already mentioned.

 

[Porter]

I’d be genuinely interested to hear what you think could be done differently by Lotus to control this and stay within the regulations and contracts. Plenty of people at Lotus have looked at this and don’t have a short term solution. The long term solution is the wholesale and complex overhaul of the US dealer network already mentioned.

Here's a great way: blanket refusal to fulfill product unless the dealer agrees contractually to not demand ADM bribes from Lotus's customers.

 

[Nova]

Consumers don't go to dealers wanting to buy a car from the dealer. The consumer wants to buy the car NEW from the manufacturer whose logo is on the sign. The dealer is inserting themselves into the middle of that transaction by legal fiat. It boggles the mind that they are even able to sell cars as "New" when an ownership transfer has already occurred. It's a self-evident fiction.

To be more blunt... they are a bridge troll in a transaction between two other parties, and are forcing an ownership transfer first from the manufacturer to themselves, and then to the consumer. NEITHER of the other two parties wants this. It's absolutely undesired by everyone other than the dealer. The only reason it's not considered tortious interference is because the NADA have rigged the game legally in their own favor through corrupt influence on state laws.

The entirety of the franchise dealer system in the United States needs to be upended through changes to federal law, and until then no auto dealer should ever be given benefit of the doubt as a trusted party in any transaction.

I'm not defending dealers or the dealer framework. I am generally very skeptical of government regulations that restrict free commerce and harm the voluntary nature of capitalistic exchange. However, given the context we are in, which is that the dealer framework enjoys exclusionary protection through law, it's entirely consistent that people will maneuver within this system to their own selfish advantage. It's naive to expect otherwise.

 

[Nova]

Here's a great way: blanket refusal to fulfill product unless the dealer agrees contractually to not demand ADM bribes from Lotus's customers.

That sounds like price-fixing, which is generally illegal in the US. As a rule, parties may not collude to set pricing. Even with the so-called MAP pricing, that only affects advertised prices. Dealers are generally free to sell a product at whatever price they want. Even there, violations of MAP must be addressed with unilateral policies on the part of the manufacturer - they cannot appear to work with the dealer on MAP compliance.

Again, I'm generally against regulations that restrict private party agreements. I feel like a manufacturer should be able to dictate the price that their products are sold at. But the reality is the reality, and we have to expect that people will behave in their own self best interest.

 

[Porter]

That sounds like price-fixing, which is generally illegal in the US. As a rule, parties may not collude to set pricing. Even with the so-called MAP pricing, that only affects advertised prices. Dealers are generally free to sell a product at whatever price they want. Even there, violations of MAP must be addressed with unilateral policies on the part of the manufacturer - they cannot appear to work with the dealer on MAP compliance.

Again, I'm generally against regulations that restrict private party agreements. I feel like a manufacturer should be able to dictate the price that their products are sold at. But the reality is the reality, and we have to expect that people will behave in their own self best interest.

It's not price fixing. Price fixing would be for dealers (who are ostensibly in competition with one another) to collude together to artificially raise prices, which is what I'm arguing against. As a good example, a few years ago in the DC area the local Ford dealers colluded with one another to set ADM bribes on the Focus RS for the whole area, and proudly told me so to my face. I wasn't in the market for one at the time or I would have dedicated some personal energy to involving the FTC.

More detail about what is and is not price fixing: https://www.ftc.gov/tips-advice/com...itrust-laws/dealings-competitors/price-fixing

For Lotus to be "price fixing" they would need to be colluding with their *own* competitors (other car manufacturers) to artificially raise or otherwise rig the pricing. That's obviously not what we're discussing here.

 

[jmn444]

adm sucks, but honestly if supply is fixed, the end result would be private individuals with cash flow buying the supply and re-selling in the secondary/used market for immediate profits. at least IMO, end result will be the same.

if this dealer is the one i'm thinking, they told me (when I asked) that there would be a market adjustment when allocations came in. I picked another dealer 100% because of that. There have been sooooo many posts and threads about msrp in writing since all this started it's hard for me to understand how people would be surprised this is happening now.

oh well... I'm cheap and patient so will wait for msrp/base/whatever till it's available haha

 

[SloAlfa]

I’d be genuinely interested to hear what you think could be done differently by Lotus to control this and stay within the regulations and contracts. Plenty of people at Lotus have looked at this and don’t have a short term solution. The long term solution is the wholesale and complex overhaul of the US dealer network already mentioned.

sure.. here is one.. COMPLETE visibility to the lists, where people were in line and maybe someone other than the individual dealers manage the phone calls to confirm orders. It's 700 phone calls for god sake.. I have a call center that makes 4000 calls per week with less than 35 people.. Not hard.

Lotus could have easily handled that with a little technology and an outsourced call center. it's a simple database and maybe a third party to manage the lists as they were created from the dealers. The issue here is all dealers got to make their own rules on deposits, how they "tracked" it etc. They "registered" them but all that served was so Lotus could gauge interest.

We have no way to know where we are ACTUALLY in the list with the dealer.. We have no way to know if anyone ahead of us ACTUALLY dropped out (if they even did).

Unified Registration process
Third Party Verification and Confirmation
Unified Deposit Amounts and process

Pretty fricken easy to me..

1. Customer calls or visits dealer
2. Dealer Registers while customer is there and takes first Deposit
3. Dealer and Customer sign binding purchase agreement (legally locking in price)
4. Customer gets actual Confirmation number and email stating where they are in line.
5. Lotus Allocates however they want to each dealer (dont care)
6. Third Party starts calling each customer and letting them know they have a car.
7. Customer decides if they want the car
8a. If yes / Second Deposit (non refundable) is taken from third party and customer is informed on next steps
8b. If no / Customer first deposit it refunded and the spot is now open and the next person in line is called.

Overall not that hard to manage the lists and not let the dealers use the lists and shift them around to the highest bidder.

 

[TXEMIRA]

adm sucks, but honestly if supply is fixed, the end result would be private individuals with cash flow buying the supply and re-selling in the secondary/used market for immediate profits. at least IMO, end result will be the same.

if this dealer is the one i'm thinking, they told me (when I asked) that there would be a market adjustment when allocations came in. I picked another dealer 100% because of that. There have been sooooo many posts and threads about msrp in writing since all this started it's hard for me to understand how people would be surprised this is happening now.

oh well... I'm cheap and patient so will wait for msrp/base/whatever till it's available haha

Brutal on top of brutal.

100% of US customers would pay the $1,500 shipping cost to get the car sooner. There is no dealer to customer loyalty so why should there be any customer to dealer reciprocity?

Service? OK, maybe, but what percentage of folks would even go to a dealer, the same dealer, and how many of those dealers would do anything bad just because the car wasn’t purchased there?

All rhetorical but still all sad.