Automakers agonize over every penny when pricing a vehicle, but give billions of euros away in incentives and margins to sell it. Our data-driven analysis illuminates the status quo of car pricing and how automakers can outperform it.
Several factors contribute to the industry’s pricing problems. Automakers usually determine vehicle list prices with a cost-plus approach and comparisons to competitive pricing, but do not fully take into account customers’ perspective.
The issue
Current pricing practices in the automotive industry result in significant discounts higher than dealer margins, requiring intensified OEM support
Source: Oliver Wyman distribution cost data base
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