The last couple of years have been tough not only on automakers and consumers, but also dealers. With the chip shortage and other supply chain issues forcing automakers to slash production and demand remaining high in spite of record prices and a general lack of incentives, dealers have preciously little inventory to sell, after all. That doesn’t figure to change any time soon, but now, Ford dealers will get rewarded for selling vehicles quickly, according to a bulletin seen by Cars Direct.
FoMoCo is adding what it calls a “fast turn component” to Ford dealer incentives, which will pay $250 in dealer cash for vehicles that are sold within 15 days of hitting the lot, $150 for cars sold in 16-30 days, and $100 for vehicles moved in 31-60 days, while anything taking over 60 days to sell results in no bonus. This is a big departure from the pre-COVID days when the bulk of incentives were applied to vehicles that had been sitting on lots for over 60 days.
In addition to this new incentive program, The Blue Oval is also changing its dealer floorplan assistance program, which provides funds to offset the costs of stocking new vehicle inventory. Starting on April 1st, vehicles that have been on lots for more than 75 days will no longer be eligible for reimbursement. “The current FPA program was built to serve a business model based upon high inventories, but Ford’s ongoing efforts to reduce complexity and keep dealer stock at manageable levels requires that the program be adapted to this more dynamic approach,” the bulletin reads.
Both of these changes align with Ford’s plan to significantly trim inventory and speed up turns moving forward, which will in turn increase profitability. The chip shortage prompted this permanent change to the automaker’s business, which includes a shift toward more of a build-to-order model, a reduction in dealer inventory, and fewer configurations of each vehicle sitting on lots.
We’ll have more on Ford’s business strategy soon, so be sure and subscribe to Ford Authority for around-the-clock Ford news coverage.
Comments
Incentivizing sales is fine, but that $250.00 will be part of the final amount I’d negotiate at the point of sale for a vehicle.
The service department of a dealership is making fat profits on work done after the sale, which is fine with me. But pass that incentive on to the consumer, now that we know it exists.
I will never buy another Ford because of the 6.2 gas burner cost me out of pocket money
THE LOCAL DEALER NEEDS INVENTORY FIRST, BEFORE YOU START QUICK SALE
Is Ford corporate aware that the local dealers have NO inventory to turn?
Would that make dealers realize that they cannot mark up beyond MSRP? Will this rule change their obnoxious behavior of marking up?
Ram, Kia, and Hyundai will start cranking up production once the shortages subside which will mean they will gain market share. Ram has already closed in on Chevrolet’s No 2 truck spot and even if they don’t become No 1 they will gain market share at the expensive of Ford if customer’s have to wait too long for their new truck. The time between ordering, producing, and delivering to the customer needs to be shortened otherwise Ford will not be successful with this new plan.
What they aren’t telling you is they took away the Floorplan assistance which was 1.5 percent of msrp sustainability more so there’s no reward here theve taken a billion dollars away from there partners looool. Greed at its best
Wow a whole 250 I mean if they had the ability to sell ten cars a day sure but a dealer is lucky to be able to sell 10 new cars a week now because of inventory
Tough on the Ford Motor Company??? They earned 17.9 billion in profit last year. LMFAO!!!
Dealerships now are adding a market value adjustment to a lot of vehicles based on supply and demand. Recently I was at a ford dealership looking at a Ford broken. It listed fir 30000 but after market adjustment of another 10,000.00 it was over 40. That vehicle will sir until it rust before I would buy it.