Ford Dealers Told To Prepare For A Brutal Future

[Bedub76]

I would be happy to see dealers disappear. Blood sucking middlemen. Shopping, negotiating, traveling, more negotiating, reneging, leaving, driving some more, negotiating, etc.... I think Ford has the right idea. One price, centralized purchasing, no BS. I will end up paying more but at least I don't have to deal with another dealer.

Sponsored

 

[LSchicago]

A gas powered car can’t be ordered and paid for online?

Currently all ICE vehicles must be bought through a dealer. No factory direct sales.

 

[LOL WUT]

Currently all ICE vehicles must be bought through a dealer. No factory direct sales.

Interesting! I figured there were some union issues but didn’t realize ICE vehicles had to be bought through a dealer. Thanks for sharing!

 

[Mspider]

In the past I liked buying cars at dealerships. But the pandemic really started to make me hate them. With markups, dealership installed accessories, and the finance guy always trying to upsell (happen before pandemic as well).

I think it would be awesome to custom order exactly the car you want and do all the paperwork online. Ford service and delivery centers will still exist.

 

[GeorgeC]

This is the way of the future. The demographic that is comfortable with the dealer model, kicking the tires and haggling price is rapidly becoming a vanishingly small part of the landscape. The demographic that expects to have every bit of information, including the exact configuration of the vehicle, the exact price they will pay, and when it will be delivered to them all available on their phone, without ever talking to a human is on the rise.

They don't want to be "sold" a car, they want to "buy" what they want, when they want it and how the want it. The internet sales model is giving them that power. I have seen this behavior in my own (adult) children not just with auto purchases, but really any kind of purchase. The market will demand this and the manufacturers who read what the consumer wants and adapt the fastest will win out.

Dealers will morph into service centers and will still make tons of money. And of course, there will still be a thriving used car market not only for dealerships, but used car lots as well. I do see CarMax and Carvana redefining that market to more of a "buying" transaction though too. Again, that is what the market wants.

I am far more disturbed by the trend of manufacturers moving towards a subscription model for features and options in your vehicle. You need to pay a monthly fee for all the wiz-bang electronically controlled options like voice navigation or parking assist sensors or they become disabled. The absolutely last thing I want is another set of hands picking my pocket every month!

I sold cars for a while in 2002 at that time there was a lot more profit in used cars. I sold motorcycles for a couple of years and it was the same deal there. On new BMW's there was a 2500 profit average on a new motorcycle. We sometimes got kick backs on certain new models if they wanted to move a lot of them. The guy who owned our dealership was a crooked sob but if you paid msrp and dealer prep he would bend over backwards to take care of you. If you came in for an oil change or service he would hand you the keys to a new demo and tell you go ride for an hour and your bike will be ready when you get back. If you wanted a big discount you would get it but every time you came in for service he would put the screws to you. When I sold jap bikes the finance guy would kill you I saw a young kid ending up paying about 25k for a 12k bike paying really high interest on the loan and phony protection warranties etc..

 

[mustanghammer]

During the 90s I worked at a small independent repair shop and read all of the trade publications that the owner subscribed to. I seem to recall that Ford at that time attempted to consolidate Dealers around the the service process. If I remember correctly they were going to buy up dealer franchises and create fewer mega dealer/service centers that Ford controlled. I think this coincided with the creation of the Quick Lane service concept. It was also at this time that the Motorcraft parts line changed to only provide parts for Ford/Mercury/Lincoln vehicles. Prior to that, Motorcraft made/marketed parts for all makes like AC Delco does. When I saw the news about changes for Ford EV sales it reminded me of what I read about back then.

The over all move to less inventory where you drive a representative example of a car and then order what you want makes sense from a business stand point. Personally, it affects the way I typically buy a new car. My strategy is the buy the last year of the out going model when a refresh is coming out. That is how I got a 2012 Mustang in early 2013 for a $6K discount and my current 2017 Mustang GT for a $5K discount and 0% interest. Both cars had set on the lot for 250-300 days and both were found at a small town dealership.

 

[paulm1]

https://www.newsbreakapp.com/n/0g0eUfiH?pd=07RIV2EE&lang=en_US&s=i16

Wish GM would do the same thing, it's why I'm driving a new GT mustang instead of a new C8, refuse to pay over sticker for an american car. I know car dealers in nj that said they've never made more money than they have in the past 2 yrs. Let em all become used car lots.

 

[aham23]

this is like Ford "telling" them they can not do ADM.

also toatlly agree that the days of under MSRP will be long long gone if there are no dealers with inventory sitting on their lots.

 

[Bikeman315]

this is like Ford "telling" them they can not do ADM.

also toatlly agree that the days of under MSRP will be long long gone if there are no dealers with inventory sitting on their lots.

Manufacturers will still have sales, rebates, & incentives. Deals will still be out there just in different ways.

 

[aham23]

disagree. at least the deals wont be the as good. time will tell.

 

[Bikeman315]

disagree. at least the deals wont be the as good. time will tell.

How can you disagree with something that hasn’t happened yet?

 

[Joe B.]

So, no more impulse buying. Back when bumpers were chrome, guys I knew here in Chicagland would go on car lot adventures and likely as not come back with a new Cutlass and payments. I'm sure that was a significant amount of how sales were made.

 

[2morrow]

To the original talking point...I'm not mad and kind of saw this coming with recent trends.

I actually enjoy the car buying process but have noticed terrible inefficiencies as well as a massive product knowledge vacuum among the sales force. Seeing this bold new strategy implemented might help some of these issues.

The issue of product testing will have to be sorted out. However if any of you had tried to test drive a performance car lately, it's not like your missing out on anything because you don't get to test drive them anyways lol.

Good luck Farley, we'll see what happens.

 

[LSchicago]

So, no more impulse buying. Back when bumpers were chrome, guys I knew here in Chicagland would go on car lot adventures and likely as not come back with a new Cutlass and payments. I'm sure that was a significant amount of how sales were made.

Back when Cutlass was king!

 

[ay1820]

disagree. at least the deals wont be the as good. time will tell.

The law of supply vs. demand always wins out. When demand cycles low, so will the prices.

We only “think” we are gaming the system now because we have an illusion of control when we negotiate with the dealer. In the end, the dealer will only cut a deal that makes them money, so there has always been a practical floor. If you cut the dealer out, then there is one less party that needs to make money on the deal and the floor can come down. Competition will still be there and the manufacturer will set the price to whatever the market will bear. If that means they need cut deals and offer incentives, they will (just like today).

Sponsored