Penske Drops No-Haggle Pricing at Pilot Store
According to Automotive News, Penske Automotive Group ended its no-haggle pricing experiment at its Toyota store in Surprise, Arizona. Toyota of Surprise was the pilot for a no-haggle pricing model since the spring of 2014, the auto-industry trade publication reported. Penske pulled the plug in the second half of 2016, citing failed expectations in cost savings and sales-volume growth.
Applying to new and used vehicles, as well as trade-ins, financing and insurance products, the no-haggle program switched sales associates' compensation from commission to salary. Under the program, the sales associates handled each transaction, from greeting the customer to closing the deal in the finance and insurance office.
Penske chose Toyota of Surprise as the pilot store because it had just begun operations, with most of the sales people coming from retail backgrounds outside automotive. This simplified the training process.
Penske Automotive Group is the second-largest dealership group in the country, according to Automotive News. It sold nearly 234,000 new vehicles in 2015. With the termination of the no-haggle pilot, Penske returned to the traditional sales model with commissioned salespeople company-wide.