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Ford Authority

Ford CEO Jim Farley Wants 100 Percent Digital Sales, Fixed Prices

As Ford prepares to split itself into two distinct entities – Model e, which will focus on EVs, and Ford Blue, which will handle the ICE side of things – Ford dealers have also been asked to specialize in one or the other, or even other parts of the company’s business as soon as next year. As Ford Authority reported in early March, the forthcoming reorganization may also require that dealers sell EVs at fixed prices  with zero physical inventory in scaled-down spaces. Now, Ford CEO Jim Farley has given his strongest statement yet indicating that this will indeed be the way that FoMoCo dealers do business at some point in the future.

“We got to go to nonnegotiated price, we got to go to 100 percent online,” Farley said while speaking at the 2022 Alliance Bernstein Strategic Decisions Conference. “The vehicle, there’s no inventory, goes directly to the customer, 100 percent remote pickup and delivery. But then we have this opportunity to use our physical presence to outperform them.”

Farley’s comments indicate that Ford will indeed continue to shift more toward online sales and fixed pricing, which has been expected for some time now, but his last sentence also reveals that the automaker plans to leverage its dealer network as an advantage over some competitors like Tesla and Rivian, which only sell direct and do not operate any physical dealerships – only locations that service those vehicles and offer test drives.

This concept isn’t entirely foreign to Ford, which has taken online reservations for a number of recent products, and is already selling the Ford F-150 Raptor and the Ford Mustang Mach-E EV crossover directly to customers in China. Additionally, as Ford Authority reported last week, all Ford dealers are expected to offer pickup and delivery service as soon as next year.

We’ll have more on Ford’s efforts to retool its dealership experience soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Greggt

    Death for the Ford dealerships, so sad!! Ford needs to do something with this guy before he totally destroys the company.

    Reply
    1. JDE

      Honestly, with no incentive to be around, the secondary market will fall apart or the parent company will lose a ton through missed issues with trade-ins because the remaining “dealerships” will basically say what’s in it for me to physically inspect the cars. While I understand the good of buying for one price, I know the bad of the hustle is required for the masses to buy into a no dealer presence. Best example I can cite is someone living near Wichita that has a broken tesla that can only have it transported to Kansas City to be repaired, because their is no Dealer repair network to fall back on. I hope Chris Farley’s relative thought it all through, I can see how this might implode if not handled correctly.

      Reply
    2. Tom kennen

      Agree. What happens if my truck is totaled,stolen,or the motor blows up? I can’t just go buy a new one? I need to order one? So,what do I do in the mean time? I guess the answer is simple. I buy something else that day. Bad idea in my mind.

      Reply
    3. WillH

      More than just the dealership, it will be the end of Ford. They are wanting to go to an order only model as well. Which with ultimately can sales for Ford. Most of the Ford customers that know and have dealt with usually do not want to wait for thier vehicle to be built. It will ruin Ford and end the F series reign as top truck. And at the service level. The warranty is not going to mean anything if there is no dealership to do it. If they can’t sell it, the dealership is not going to be warranty center. Sounds like the CEO is a pencil pusher, who obviously does not know anything about the real world or the customers. Ford dealership I’ve worked at been family owned for over a hundred years.

      Reply
  2. GaryB

    I agree with the 100% online MSRP only model. Greedy dealerships tacking on surprise ADM and overpriced useless accessories (im looking at you $700 charge for “nitrogen” in the tires in an off roader). I dont agree with splitting dealers between electric or ICE though. Not enough room in my small town for two ford dealers. Itll get to you having to go into the big cities to find an EV dealer or get service for your EV. That is not going to inspire country bumpkins like me to bring an EV home.

    Reply
    1. Ed Witt

      Not sure there would be two dealers ….just one with two ways to buy.

      Reply
    2. Walter Raulerson

      I hope you told that guy stick it when they tried to charge $700. My dealership charges 0.

      Reply
    3. WJ

      So greedy manufacturers can set their pricing just as high as the current dealers are doing using “market adjustments”. If you want a Ford step up and pay whatever FOMOCO decide they want to charge. Looks like the China model is taking over the US at all levels

      Reply
  3. Joe

    Wait till customers mess up their orders and are missing equipment that they thought was standard and then not taking delivery. They now have to re-order and take months more since there is no dealer stock.

    Reply
    1. Joe

      They miss a option or option package they wanted. They think some things are standard and end up not ordering that option. Customers are not experts, they will make mistakes.

      Reply
      1. Kenny D

        JOE…. You are 100% “CORRECT”. Mistakes WILL BE MADE by the “HUMANS” that Place the Order’s!!! SORRY “ROBERT” People are HUMAN and do Make Mistakes!!! AND JOE IS 100% RIGHT!!!! However, In your Case, It Appears that “YOU” BIG FELLA have NEVER MADE ONE???? Comical. BOBBY….

        Reply
    2. Walter Raulerson

      Dealerships will probably “help” the customer do the ordering for a “small fee” Don’t think they aren’t already figuring out ways to stick it to the customer. They also could get credit for the sale because of dealership zones and watch service fees sky rocket. Ford will probably make lots of options standard equipment so there are less options.

      Reply
      1. Kenny D

        CHANGE of T U N E There Robert??? “EH”.

        Reply
      2. Lurch

        Dealers have always known how to milk every teat on a cow. I think they’ll find a way to survive.

        Reply
    3. WJ

      Do not think you are going to be able to “reject” delivery. Lawyers will see to that in your purchase contract

      Reply
  4. Blueoval Ralph

    Another Farley Wet Dream! He’s on Another Planet!

    Reply
  5. Mark B

    Robert, well said. I agree with you 100%. This must be done for the company’s survival and vitality in the future. Most younger customers are already living in this world, heck, many of us old farts are also.

    Reply
    1. Joe

      65% of the buyers are over 40. The yound folks can’t afford the average payment of $829.00 on a Mach E.

      Reply
  6. Francois

    That’s too bad. I really do enjoy the negotiation process. In over 35 years of car purchase experience I have NEVER paid sticker for any car.

    Ever.

    That includes the Shelby GT350 I bought brand new in 2020.

    Especially in this day of every dealer and their brothers advertising significant discounts in Autotrader and all the rest of the online sites. You can easily pit dealers a couple states away with the local guys. It’s how I got a discount on the Shelby, I ended-up buying in the next state. The leisurely 2 hours interstate ride was well worth it to get the exact combination of color and options I wanted + over a thousand bucks discount to boot.

    I will definitely miss that.

    Reply
    1. Francois

      I mostly agree. Your pre-requisites and homework were all necessary in the pre Internet / mostly local shopping days, I’ve done all of the above several times.

      These days, waiting until initial frenzy is satisfied is still more necessary on some models of course. Getting any kind of real discount on the red hot / limited production GT350 in 2016 would have been quite the feat.

      For most cars though, the ability to pit dealers against each other nationwide = significant savings no matter what if you play the game. The dealers know it and hate this fact: There’s always at least one somewhere who feels compelled to compete on price, is willing to discount, and next thing you know it’s an online race to the bottom (Of profitability).

      That’s my wedge.

      I got over $3,800 off the sticker and 0% financing on our 2019 Edge ST. That was the first year for that car, and it was selling well. We did get it in December and that helped to get Ford subsidized financing but it was still first model year on the car. I did 0 homework on that one outside of shopping online for a few weeks. The online prices varied quite wildly and that was my leverage. That one was bought in my local metro area. Pretty awesome deal.

      They had my GT350 on the lot for 1 day when I was fortunate enough to find it. It wasn’t even cleaned-up yet. I snagged it / gave them money before my competition found out it was available and with a discount to boot. I had to fight to get them to honor the discount once they figured out what they had but I did get it. On their part they turned the car out of inventory in less than a week which is worth incentives to them. A win win.

      Reply
  7. Joe

    Mach E still do need service, brake fluid flush every 3 years, cabin air filters at 20K, transmission fluid at 150K, Coolant replacement at 200k, tires cost more. Less, but you will spend money on them. Also as the battery ages the range will be reduced where a ICE vehicle will still go as far.

    Reply
  8. imanjunk

    No matter the brand I will never buy a car if I can’t first sit in it and test drive it…period. So they better have one on hand at the dealer or some location close by.

    Reply
  9. Howdoesitfeel

    There’s seems to be a bit of misunderstanding concerning the Dealership model with respect to legacy Auto manufacturers and how this news affects that. Forgive me if I’m explaining something that everyone knows. But, dealerships operate legal cartels that disallow new dealerships from opening in certain areas or within certain distances to other dealerships. Tesla actually tried suing ( I know in Michigan specifically, among other states, where I live-to be able to sell online) because you can’t or couldn’t sell new cars outside of a dealership and you can’t open up new dealerships in most places, because of the laws. These laws don’t affect used cars which is why used car lots are much more common. This has a net negative benefit to manufacturers and consumers who would rather have the option to purchase a car at a flat readily accessible price with no strings or hidden fees attached. The dealership owners lobby pushes back on this every time there has been an attempt to change the current model and if you’ve been paying attention to Congress they aren’t exactly known for their efficiency or effectiveness. I’m not sold on requiring dealerships to pick one type or the other in terms of ICE vs EV because the existing laws would create a situation where it can become an imposition on those who want to buy one or the other type and can’t easily get to a dealer that sells that type. I’m a millennial and I’m not entirely sold on the EV thing, I think it mostly operates as a way for manufacturers to nickel and dime customers for features that were standard or at the very least transferable. Direct to consumer and online model is better, the fact that Farley is adapting shows why Ford has been able to stay on the cutting edge with respect to technology, design, and market share. Remember they’re the only company not to take money from the ’08 bailout.

    Full disclosure, my father is a Ford retiree. I have no other affiliations with the company, though.

    Reply
  10. R. Walker

    If there are no dealerships, what will people do when they want a new car? Sell your used vehicle on your own? You won’t be able to trade it in correct? No dealership.
    What if I am looking for a nice used car? Will Ford maintain certified used car lots?

    Reply
  11. David Middleton

    Ford will go by the wayside like pontiac,Oldsmobile and mercury people want to look at car drive them I understand greedy dealer markup but you got to remember one thin you are the customer they need you you don’t need the I tell them that right off the bat also I tell them there is 500 dealers between here and Mississippi River on will deal with me if they dont I will walk away the ford dealer in my home town Kingsport Tn has found that out on several occasions I will not even buy from them because of their stupidity but they are 5 more for dealers in this are to but I my self and not buying sight unseen that may be ok for people that want these ev cars but for me no inventory on lot no sales from me I been a ford truck man for years but I got to ram or gmc if ford does this and alot of people I know have talked about this and they say the same .

    Reply
  12. Mrx19

    Don’t forget the millions on the line for the huge dealer groups. They will spend it on lobbying and lawsuits that will take years to work their way through the court system. Combine that with the large number of states the have laws forbidding manufacturers selling direct and the coming recession and Farley has a long road ahead of him.

    Reply
  13. Tony

    Less than 2%( and California is the majority) of the market – how can honestly believe this is a true sampling. People in the USA want their product now in most cases- ex: Amazon same day delivery- why on earth would anyone purchase a $50-$60K vehicle without seeing it and driving it- by the way EV’s do need maintenance- I suggest you read the owners manuals for the Mustang Mach E and Tesla’s-

    Reply
    1. Walter Raulerson

      Happens every day this might be the extreme but people are buying the Corvette without driving it and since there aren’t any cars/trucks on the lots they have no choice but buy by just seeing it.

      Reply
  14. MIKE BARANOWSKI

    This guy is on drugs ! The only and I mean the only reason he wants to do this is to make more money for the shareholders, oh and increase the absolutely obscene salary he receives. Now here is the thing, who is going to be hurt by this ? The poor consumer. Sure there will be no negotiations on the inflated set price ! Only morons pay sticker price!!!!!!
    I cannot believe how many dopes here actually think it’s good to be fleeced !
    He will eliminate competition, which helps the consumer. What a sick world!!!

    Reply
  15. R. Walker

    If there are no dealerships, where does one go to trade your vehicle in for a new one?
    Where do you go to buy a Ford certified used car?

    Reply
    1. R. Walker

      Sorry for the repeat. Disregard

      Reply
  16. Rob

    Well debated by individuals with actual intellect on the subject! Much better than the usual class wars bashing anyone who has made something of themselves. Bravo Gentleman!

    Reply
  17. Kenny D

    Well, we will see what come to pass in the Near future, Meantime, I’am OUTTA Here!! Too much Schooling from someone who seems to “KNOW IT ALL”…. Asta La Vista, BABY!!!! Gonzya….

    Reply
  18. JDE

    How will Ford handle the secondary market? Not many people can buy brand new and many rely on a trade in to be able to afford as new as possible. With the high cost to enter and the probable massive reduction in value of outdated tech with 50% batteries, how does that promote additional sales if they do not feel the vehicle hold value and the cost up front is too high to begin with?

    Reply
  19. John Kerr

    Ford definitely overprices their msrp stickers. If Fomoco sticks to that msrp sticker then the customer will definitely will be the looser in the long run. Ford and other manufactures need to learn that all customers are not doctors who can afford 100000 vehicles.

    Reply
  20. AugustineMendoza

    When you do anticipate Ford implementing the online orders for EVs? Will it start this August with the Mach-E orders?

    Reply
  21. Joe’s Wrong

    Gotta love the effort by “Joe” and his pro-dealership stance! 🙂

    Reply
  22. Mike

    To me, Farley is instilling dealerships to go EV, or die. Just like what Cadillac has done, as a way to reduce the total number of dealerships.

    Reply
  23. Ray e

    Whoever agrees with this must have never been in sales , we have been the front line forever , and know they want to wipe us out ! But if they fail they will need us again! I hate this world

    Reply
  24. Truzak

    So how does one test drive a vehicle if there is no inventory? If there is no dealership?

    I waited 9 months to purchase a vehicle because I was not able to test drive one because none were ever available at a dealership.

    Reply
  25. Michael Torres

    I believe Mr. Farley is correct and companies need to cut out the middleman and games dealership play with over MSRP pricing as investors flipping vehicles for profits destroy the ability for a loyal Ford buyer to afford vehicles they have waited to purchase for years. Ford knows if they upset their loyal customer base they could lose them forever and that’s not a risk they want to take. Today you have to pay $25,000 over MSRP to buy a new corvette and $20,000 to buy a Cadillac Escalade. Think of all that money needed to run a dealership we as customers can all save on our final price paid.

    Reply
  26. Rant Rater

    It’s neat that Henry Ford started the early workings of what a dealership is. And the changes are turning away from the model.

    As long test driving is possible, I’m all for it

    Reply
  27. Robert Logsdon

    The wholesale/retail system for autos is an outdated dinosaur of capitalism. I welcome set pricing. Why should I have to negotiate with a misleading salesperson? And the dealership setup is also outdated.

    Reply
  28. Chris

    Wow. I’ve never seen a thread with so many people suffering from psychological problems. The long-winded responses that drone on are wacky, wacky. Do these people realize we don’t have time to read all that BS? Keep the comments short and we’ll read them. Yes, Ford is in big trouble with Farley.

    Reply
  29. Mark A Hoffman

    This guy will put ford out of business!!! I know my generation likes to go into the dealership and test drive and get the hands on feel along with the negotiations and people interface. I will never by online without hands on. That’s why Carvana will ho under before ling!!!

    Reply
  30. D.M.

    Just dandy, before you do some more dumb junk, could you just build my bronco? Been waiting over two years now… any time now would be great.

    Reply
    1. A J P

      Hey D.M.
      I’ve been waiting 2 years for my Bronco and finally just got a text from Dealer..
      It’s ready, it’s here, it’s beautiful…
      BTW.. Tacking on 10% over Sticker…
      Be Careful What You Wish For!!!

      Reply
      1. Not Chevy

        You waited 2 years? Sounds to me your dealer sold your car. order a few more and sold them. then your order came in. Problem is dealers ordering their stock and sit on lot with markups taking build a costumers could ofHad. Problem isn’t Big Jim it’s most dealership that abuse ford customer with markups and whatever. His move might work. But I don’t like our fords getting nice upgrades in China. Ford is American don’t forget where you’re from.

        Reply
  31. LWAP

    Tesla tried this. That’s why they can’t sell vehicles in Michigan. You know, Ford’s home state! Carcar is in over his head.

    Reply
  32. A J P

    Hey D.M.
    I’ve been waiting 2 years for my Bronco and finally just got a text from Dealer..
    It’s ready, it’s here, it’s beautiful…
    BTW.. Tacking on 10% over Sticker…
    Be Careful What You Wish For!!!

    Reply
  33. Wes

    As reported, Ford is going to charge dealerships up to 1 million for charging equipment for Ford EV’s and another 1 million for Lincoln charging equip. WHY if there is no inventory?

    Reply

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