Ford moving towards custom orders, away from huge inventories

[velocirooster]

Honestly, if moving toward the custom order model wouldn't adversely impact the cost to the buyer, i think i'd prefer this, only when the ordered car is known to me. If there's a test drive model, that would possibly solve the unknowns. I do wonder if Zach@Granger is willing to share his take rate on custom order versus stock sales for Mustangs.

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[shogun32]

The salesman is a friend of ours and gave us a great deal.

>9% off MSRP + ford cash?

I think dealers should get a couple of cars for testing and that’s it. You order your car from them and pick it up in a couple of weeks when is ready.

more like 5-7 of each model - between color, engine, trim combo. But dealers of any decent size will pre-order plenty so they have product to sell RIGHT NOW. If a purchase is going to take 6-9 weeks to arrive I suspect a non-trivial percentage will screw it, and go buy used or another brand that isn't run by idiots.

I bought off the lot because it was there and the price was agreeable. Color didn't matter (F150) only engine (3.5TT), cab (crew) and lockable rear diff. I naively bought a PP1 car without realizing the total joke the package was. In hindsight I should have put 6.5' bed on the criteria but meh, I'll live. Maybe once the market un-distorts I'll trade to an STX trim instead of XLT. Car/Trucks is just sheet metal and wheels.

 

[br_an]

A friend of mine is buying a Tesla, and this is pretty much how they work. They only have a few models, and most of the options are in software, so it's easier to only have a few cars and still provide test drives than from a company like Ford.

They were laid back, easy to deal with, but my friend ordered it in mid-July and won't get it until November. He then decided to delay the order and get it in January just to get a 2022 model. There's something to be said about going in and getting a car when you need it, especially if it's not some sort of specialty car and the common features are all you need.

Dealers have always made more money from used cars, but if this goes through, my guess is that they'll focus a lot more on the used market.

I was wondering if the Tesla model might be making an impact. I'm not sad to see the Dealership model being disrupted

Relevant 'Adam Ruins Everything'... Just for fun

 

[Hi-PO Stang]

I never bought a new car off a dealer lot. All six of my Mustangs were custom ordered. I was never disappointed by a custom order yet. I think Ford is wise to have the majority of its customers order their cars instead of buying off the lot. Dealers must spend a lot of money on loans to have so very many cars on a lot. Even with custom orders we still need dealers to perform the Dealer Prep on the car before the customer takes the car home. I do not see dealers being eliminated by custom orders. Dealers will always have some new cars and trucks on display so you can see the new designs and features.

 

[Angrey]

The dealer model is in it's death throws. Tesla challenged it (and won some, lost some). There's absolutely no credible reason why you should have to order a vehicle through a 3rd party (aka dealer). You should be able to spec and buy the vehicle of your choice directly from the manufacturer. This would serve manufacturers better (in the long run) and customers better.

The stranglehold dealerships have on the law is about as anti-freedom as not being able to purchase cable channels ala carte. It's amazing people don't wake up to the idea that it's a cartel that lobbied for laws that end up fleecing consumers.

 

[Schwerin]

To be honest, this is the way most of the world operates. Very limited on hand inventory and you order the way you like. In Japan, Europe this is very common.

Apple is AMAZING at this. Its why their inventory guy is now CEO.

 

[Stang565]

From what I read they will still have an inventory of 50-60 days on Dealer lots. You can tell Ford is losing a ton of money to incentives though and I’m wondering how many other manufacturers will follow this model?

 

[shogun32]

Apple is AMAZING at this. Its why their inventory guy is now CEO.

since when? Apple is like the original Ford, you can have any feature you want that's already included in our 2 standard models, and any color you want as long as it's white.

Apple is the very epitome of "you'll take what we give you and LIKE it."

 

[Dave2013M3]

The issue with Japan and Europe is there just isn't the space to have these huge mega dealers. A lot of Japanese dealerships are really just the size or even a smaller footprint than a BestBuy. This even includes the service bays.

Here is a google shot of a Honda dealer in Fujisawa, a pretty large city in Kanagawa prefecture. Note the new car inventory on the left .

 

[articrandom]

This is how it has been done in Europe. Dealerships barely have any inventory. You order your car and hope it doesn't take months to arrive. Once in a blue moon, you will find a car with similar specs to the one you have that is in stock and you will get a deal so the dealership can get rid of it quickly. I think it also has to do with the fact that most European buyers keep their cars for a long time. They don't usually swap cars every 3-5 years since they buy their cars at their own liking.

 

[Schwerin]

since when? Apple is like the original Ford, you can have any feature you want that's already included in our 2 standard models, and any color you want as long as it's white.

Apple is the very epitome of "you'll take what we give you and LIKE it."

Since Cook took over Inventory and Supply in 1998. They have always been very good at managing inventory down to the needed screw so that they NEVER have more on hand than they need and never run out of stock. Limiting configuration is part of what allows them to run inventory so lean, and hence, profits.

There are literal essay papers and articles about it.
Apple: Kings Of Inventory Management - Apple Maven (thestreet.com)
Inventory Management Leaders: Apple Inc. (clearspider.net)
Apple's secret sauce for success is inventory management - PhoneArena
Supply Chain Management: An “Apple” Inventory Management lesson a day, keeps the competitor away! (cmuscm.blogspot.com)
Apple Supply Chain - The Best Supply Chain in the World (tradegecko.com)
A Look at Apple’s Supply Chain Management | Dynamic Inventory

 

[shogun32]

They have always been very good at managing inventory down to the needed screw so that they NEVER have more on hand than they need

sure, just TRY to do that in the car space.

 

[Schwerin]

sure, just TRY to do that in the car space.

I'm sure Tesla is doing something similar.

The car industry is always going that way. Look how many features are "package" based.

You basically pick i4 or v8, then what 3 or 4 Packages you want.

With a Mac Air, Pro or Desktop then pick what upgraded CPU, RAM, Storage you want

 

[shogun32]

The car industry is always going that way. Look how many features are "package" based.

not nearly enough. There should be 2 trims 301A or 401A, 2 engines, 2 trans, perf-pack and non, and 8 colors and hardtop vs soft. But that's still 2x2x2x2x8x2 = 256 combos (32 if you discount color). Versus Apples count'em 2 (or is it 4) for the iPhone.

Then Ford has how many different CUV/Sedan/Truck models? It's insane the sheer variety of what they are offering. But they manage to make money at it, so props to them.

Inventory "mismanagement" routinely costs Ford profits by having to offer incentives. Cutting options to a half or better yet a quarter should improve margins considerably and I actually doubt it'll chase off buyers, especially if by simplifying they knock the prices down to more sensible levels.

 

[5.Oh Crush]

Goodbye dealerships. If I have to order only , then I expect no dealers. No extra fees.

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