challenger-hellcat

Dodge has a winner on its hands. The 707 horsepower Hellcat engine available in its Challenger and Charger cars has created strong demand from customers. Normally, that would be a good thing, right?

Here’s the problem. As usual, whenever demand exceeds supply, markets get distorted. Each dealer is allocated just one Dodge Hellcat per month. But some dealers have been taking so many deposits on the cars, they won’t be able to deliver them all until after the next presidential election, if ever. And would you believe some dealers have the nerve to mark the cars up thousands of dollars over MSRP with so-called “market adjustments”? Shocking!

According to Car & Driver situation has gotten so bad that Gualberto Ranieri,  senior vice president of communications for Fiat/Chrysler/Alfa Romeo, the parent company that owns Dodge, posted on the company’s blog that “an isolated number of dealers have taken a far greater number of orders than they could reasonably expect to fulfill.” He goes on to say, “Specifically, this handful of dealers appears to have accepted large numbers of SRT Hellcat orders without regard to available supply,” he writes, “and without advising their customers that orders may not be filled, if at all, for many months or longer.”

He advises prospective Hellcat buyers to ask the dealer these specific questions:

  • Is the dealer an authorized Dodge dealer?
  • How many Hellcat orders does the authorized dealer have pending and where would I be on the list?
  • Based on the dealer’s prior 90-day Dodge sales and previous Hellcat scheduling, when can I expect to receive my Hellcat order?
  • Does the authorized dealer require a deposit for a Hellcat order?
  • Is the deposit refundable and at what point in time? Please consult your state law governing the vehicle orders and the return of deposits.

When a manufacturer starts telling its customers to check local laws, you know the problem is serious.

Dodge’s brand manager, Tim Kiniskis, told Automotive News back in September that he is very unhappy about dealers who mark up the price of his cars. “If you want to market-adjust the car, that’s your right. But if your days-on-lot goes above the other guys that are selling them at MSRP, they will end up earning the allocation because their days-on-lot will be lower. They’re turning the inventory. I want this car out in the marketplace so that somebody is sharing it with 50 of their friends and elevating the brand. That’s what I want—not sitting in your showroom with a rope around it.”

To cope with dealer mark-ups, the manufacturer won’t ship another Dodge Hellcat to a dealer who has an unsold car sitting on its lot for more than 5 days. Without additional charges, demand is so strong that virtually all available cars are sold as soon as they are delivered to dealers.

At a time when Tesla is grappling with state laws that forbid direct sales to customers, many people are starting to root for Tesla to win its battle with greedy dealers. Such shenanigans will certainly hasten the day when car dealers go the way of book publishers and others who have been blown away by innovations in the marketplace.