I'm a salesman for Perth Motorsport. Most of the time, there is room to move in cars. However, sometimes when a price is low enough and the salesman is telling you that they are unable to move on the price (not even a dollar) then he is also telling the truth.
In fact, sometimes certain cars are sold at a price in which the company isn't making any money at all. But the theory is, lose a couple hunj now rather than lose a grand later. Last week i had a family test drive a BA XT Falcon advertised at $7,490, they came back after the test drive and they loved the car and were keen on it. Then they offered me $6000 on the spot. I basically told them we need as advertised for the price because we were actually losing money on that car. He then insisted on making a final offer of $7000. In this case, we were already losing a few hundred by selling as advertised and by him making offers, he was basically just asking us to burn up even more money than what we were already.
If you are looking at making an offer on the car, it's always good to make a REASONABLE offer. If you smash a salesman with a ridiculous offer, the salesman will give you one back. If you start at a reasonable offer, then the salesman and his boss will take it into reasonable consideration.
At the end of the day, price movement all comes down to
1) How much the dealer paid for the car
2) How many expenses went into the car (incl. warranty and servicing)
This is the case with 2nd hand cars. Not too sure on the situation with major/brand new dealers. But be wary of most major dealers, they will try and get as much money as they can off you.
And it always helps to be nice to the salesman you speak to
Be rude to one, and he will not be willing to help you on price.