Global Business

New Car Negotiation Roleplay

This roleplay involves the negotiation between a Honda Car Dealer Salesperson and a Car Buyer. Car Buyer has decided he likes the curb appear and excellent gas mileage offered by the 2019 Honda Civic EX-L and wants to purchase it without any additional options.

Common Facts: Value information on a Honda Civic EX_L is readily available online at websites like www.kbb.com. MSRP is $25,630. Dealer Invoice is $23,900. KBB states a fair price for this car is $23,450 (with a fair range of $22,400 to $24,500). The 2010 model of Honda Civic EX-L with some new attractive features will be made available soon.

Car Dealer Salesperson additional facts: Car Dealer has many Honda Civic EX-L on its lot because it over-purchased them in anticipation that they would be a big seller this year. In fact, Toyota and Nissan similar models have been outselling Honda. This puts Car Dealer at risk of losing the holdbacks that car manufacturers provide to Car Dealers when they meet their sales goals. In this instance Honda provides a holdback of $1000 per car, but if Car Dealer completely meets its goal, which it currently is not going to achieve. Car Dealer has a sales goal of 1000 Honda Civics so it has $1M at risk (1000 cars X $1000 each). Car Dealer is willing to take losses on individual sales of Honda Civics in order to ensure it will earn its holdbacks; however, sales below invoice impacts its salespersons commissions.

Car Buyer additional facts: Car Buyer really loves the 2019 Honda Civic EX-L. He looked at similar Toyota and Nissan models and did not like them. This is also his first new car purchase so he is excited to buy a new car, which he needs ASAP because his old junker needs significant repairs before it can be driven. He also wants a certain color selection, difficult to find (he has tried 8 other Honda dealers) and this particular Honda dealer has the color selection he likes in inventory.