Ford speaks

[Rapid Red]

Ford Dealerships Fret Over 'Brutal' Changes Coming with Electric Vehicle Rollout

By Andrew Jose June 29, 2022 at 2:53pm




Car manufacturer The Ford Motor Company plans to change how it will sell electric vehicles. The changes have alarmed some dealers in the traditional franchise model.


Ford CEO Jim Farley suggested at the Bernstein Strategic Decisions Conference on June 1 that the company wants to move to a 100 percent online sales system for electric vehicles, according to TechCrunch and the Wall Street Journal.


Farley said at the conference that Ford dealers will have zero inventory going forward, TechCrunch reported. Instead, customers will order their vehicles directly from the manufacturer and have them available for remote pickup and delivery.


“Their business will change a lot,” Farley said, according to the outlet. “There will be a lot of winners and losers, and I believe, consolidation.”


“We’ve got to go to a non-negotiated price. We’ve got to go 100% online so that the inventory goes directly to the customer with 100% remote pickup and delivery,” Farley further stated at the conference, TechCrunch reported.




The Wall Street Journal reported that such changes had been alluded to by other Ford executives in recent months. The updated EV sales plan is set to be released in September, according to the outlet.


Farley spoke with around 300 dealers this week to discuss their concerns over the new electric vehicle sales model Farley talked about at the conference, according to Ford National Dealer Council chairman Tim Hovik, the Wall Street Journal reported.


“We are going to create a better experience for EV customers—shopping, buying and especially the ownership experience—with our dealers. It will require change, and we’ll do it together,” a Ford spokesman told the Wall Street Journal.


Thanks to massive lobbying efforts, car dealers enjoy protections in all 50 states that guarantee their role as a middleman between a car buyer and the manufacturer, preventing companies from directly selling vehicles to consume
Virtually all states require auto manufacturers to sell new vehicles through local franchised dealers, protect dealers from competition in Relevant Market Areas (RMAs), and terminate franchises with existing dealers only after proving they have a ‘good cause’ to do so,” a 2015 policy brief from the Mercatus Center at George Mason University stated.


“These state laws harm consumers by insulating dealers from competition and forestalling experimentation with new business models for auto retailing in the twenty-first century,” the brief said.


Despite the existence of such laws, companies like Tesla have managed to circumvent dealership laws in many states by selling online to the customer and having their showrooms function strictly as galleries where customers can see the products but not buy them on-site.


Dealership owners speaking to the Wall Street Journal on the changes at Ford said that dealers have an important role in working with customers on their car purchases, such as offering them servicing, repair and education.


According to the dealership owners and their lawyers, the franchise protection laws in several states could make it difficult for Ford to regulate vehicle prices.

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[Bikeman315]

Ford Dealerships Fret Over 'Brutal' Changes Coming with Electric Vehicle Rollout

According to the dealership owners and their lawyers, the franchise protection laws in several states could make it difficult for Ford to regulate vehicle prices.

No real surprises here. Ford is going to have a fight on their hands. But I find this sentence very interesting. I wonder which states prevent Ford from controlling prices beyond MSRP?

 

[stanger1]

And this is our future? And the future is bright? Not!

 

[Rapid Red]

One thing it should stop is that dealer gouge, for the pleasure of letting them sell the car to you.

Was ready to pay cash for a 350r, then I got the. It's so special you need to grease my palm another 10k. Laughed in his face and walked, never looking back.

 

[Vlad Soare]

And this is our future? And the future is bright? Not!

For the time being only kitchen appliances are planned to be sold this way. Our future still looks fine.
Well, when I say "our" I actually mean "your", since for us in Europe it's been custom order or nothing for a long time already. The days of going into a dealership and driving a new car home on the same day are long gone over here.

 

[Rapid Red]

For the time being only kitchen appliances are planned to be sold this way. Our future still looks fine.
Well, when I say "our" I actually mean "your", since for us in Europe it's been custom order or nothing for a long time already. The days of going into a dealership and driving a new car home on the same day are long gone over here.

No problem here ordering the car I want. That's the way I roll.
Going to a dealer and finding something to drive home always feels like you're getting someone's hand-me-down.

 

[paulm1]

One thing it should stop is that dealer gouge, for the pleasure of letting them sell the car to you.

Was ready to pay cash for a 350r, then I got the. It's so special you need to grease my palm another 10k. Laughed in his face and walked, never looking back.

Did the same thing in march at my chevy dealer when i went to order a 22 C8, he said, " we're getting 15grand over list market adjustment". I said not from me, bye. Made an appt at smith ford in hacketstlwn nj and bought a new 21 gt off the lot for sticker.

 

[WItoTX]

I read this last week or two weeks ago. The whole industry will shift that way thanks to another American car company, Tesla.

The dealerships have dug their own grave. They probably have 15 more years, but their time is limited.

 

[BleedNBlue]

There is a fairly large dealer (multiple manufactures) in the STL area that is wanting to sell. He is wanting to sell because he is getting old and none of his kids want the business. Unfortunately his business is worth almost zero because of the cost (liability) that is owed to his union workers (pensions, etc).
Point being, I do not believe unions will allow this to happen to unionized manufactures. Union guys tend to stick together. Tesla has been able to use this business model because it is not unionized.

 

[baazooka]

This will affect a LOT of businesses in the future. I still wonder where all the infrastructure for home charging and charging stations will come from to allow the kind of volume they are talking about.

 

[Mspider]

Sounds amazing to be able to custom order a car without salesman input.

Then purchase it without the finance department push you on overpriced extended warranty and wheel and tire plans.

The middle ground would be showrooms/service centers. A place where you can order the car with help and test drive demo. Like of what Tesla does.

 

[Earlsays]

Special order/wait for it/it arrives/pick it up really isn't that bad. Last summer, I wanted a nice Herman Miller chair for work - I sit 8-10 hours a day 5 days a week, and those office depot chairs, even a "nice" one just didn't hold up under hard use...I went to the Herman Miller store, sat in a chair, wanted to buy it right there. They don't sell that way. It's only a showroom. I placed my order, had to wait a month or so, because of backorders, but it was absolutely worth it. People will grow accustomed to these changes, and ultimately, I think it will be a good thing, you'll get exactly what you want.

 

[PoCoBob]

Be careful what you ask for, because you may get it. How many posts/threads on this forum talk about which online parts supplier is best (Steeda, CJ Pony etc). People can say whatever they want about not supporting Walmart or Chinese crap, but they speak louder with their wallets. Ford is just reacting to the new reality where people will go to a store to pick the product they want and then go home and search for the same product online at the lowest price. Brick and mortar buildings cost a lot to operate and maintain and profit margins are going down trying to compete with online sellers. Something has to give at some point.

 

[Strokerswild]

I relish the thought of the day I can order any Mustang without an ADM or other such bullshit.

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