Press - January 2017

A million Rand golf and a Ferrari priced BMW M4 GTS: The price of exclusivity.

Quite a few manufacturers have dabbled in the game of limited edition vehicles, especially those who already produce coveted cars. BMW for instance has been doing this for years, remember the M3 CSL? Or even the M3 GTS? We didn’t get the latter in South Africa but we did get the former. If my memory serves me correctly, the CSL retailed for R965 000. In 2004 that was a heap of cash, hell in 2017 that price is still not cheap.  The M3 GTS was around the R1.7mil mark when converted into Rands, so it too was not a cheap car. Manufacturers can justify this though as these special editions are often faster, better and most importantly very exclusive. It doesn’t come as a surprise then that you’ll pay around R1.2mil for a used CSL (if you can find one), because these cars have become collector’s items.

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Of late though, something quite interesting has been happening. With many special editions coming in to SA, we’ve seen prices sky rocket with certain cars. This is not the manufacturer charging these prices though, but rather the dealerships, independent ones for that matter. See what usually happens is this, when a special car is offered to the public, those in the know have already put their names on the list. Some have even paid for their car in full. As a result before you know the allocation has been spoken for and the cars are sold out. This has been the case with the Volkswagen GTI Clubsport S. In the case of the new BMW M4 GTS,  specific customers were invited to purchase the cars, no one could simply say they want one. The interesting thing though is that as these cars arrive, the inevitable happens and you see them advertised on a private dealer’s lot for a ridiculous premium. Of course the accredited retailers hate this because since they are regulated by the manufacturer, they cannot sell the car for more than the recommended retail price.

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Going back to the VW Golf GTI Club sport S and the BMW M4 GTS, there are currently one of each available at a dealership. The GTI is selling for R999 000 and the M4 for R3.5mil. Yikes. The question is though, is it wrong for these dealerships to do this? Some may say so but if you think about it, it’s business. We as car lovers will lament and say this is hurting the market but from a business perspective it’s a simple case of supply and demand. Have you ever been stuck in traffic on a hot day? We all have. Chances are you’ll notice a man selling cans of Cokes and other fizzy drinks, you’ll also notice that he’ll be selling those beverages for around R20.00. That price can get you a two litre coke and some change, but when it’s hot and you’re literally stuck you’ll probably buy it. Can you blame the man for selling the drinks at that price? No, he saw that there will be a demand of cold beverages in a congested road and he supplied at the price he saw fit to sell it to you. He may be selling it for double what Pick and Pay sells it but since you’re the one dying of thirst, he’s got the power and at the same time he isn’t forcing you.

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The same goes for these cars. We may look at those prices and say “this is day light robbery”, but it’s only a robbery if there’s a gun to your head. If there’s no gun, it’s just business, good business at that. We forget that most of the people who can afford the likes of a BMW M4 GTS, have gotten to that position by taking opportunities and maximising their profit. The difference now is that they’re doing it with things we are passionate about, so we tend to feel very strongly about it. Chances are that the Clubsport S and M4 GTS will not sell for that price, but profit will still be made. The person buying those cars at those prices may seem like a fool to most of us, but for that buyer it was a hot day and he really wanted that Coke. It’s all relative after all, for multi-millionaires spending a couple hundred thousand more, or even a million for what you really want, is the same as us spending R12 more for the coke. So next time you see a limited edition car at a used car lot selling for double the price it should, remember that it’s all business and the price you pay for exclusivity.

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