As part of Ford’s upcoming reorganization that will see it split itself into two entities – Ford Blue for ICE vehicles and Ford Model e for EVs – the automaker’s dealers are being asked to specialize in one of those two areas by as soon as next year. Ford dealers that choose to sell EVs may be forced to do so with zero inventory and fixed prices, but thus far, the automaker has faced some pushback in that regard. Things are far from settled when it comes to these rules, and recently, Jim Farley referred to the whole process as a “stress test” for Ford dealers while speaking with Morgan Stanley.
“So what we’re doing with the dealers – which is NOT easy – is we’re stress testing each other’s ideas around standards. Once we put in those standards, we can go to this leaner model for purchase and still have a physical follow-up where things go wrong…when they do. Which they will, they’re cars.”
It’s clear from these comments that there is a great deal of uncertainty surrounding Ford’s new business model for dealers, as it’s unclear what standards will ultimately survive this “stress test.” Farley has been quite adamant about installing a fixed price, zero-to-low inventory business model to this point, but as Ford Authority reported last week, dealers may retain their ability to set their own prices, after all.
Ford has also faced pushback from its Australian arm, which recently said that it “has no plans to move to an online or fixed-price sales model,” noting that it sees its “dealers as vital to the success of the Ford brand, and an important touchpoint for customers to experience our brand.” This, despite the fact that Australian dealers – like their American counterparts – continue to mark up vehicles, including the all-new next generation Ford Ranger, as Ford Authority reported back in May.
We’ll have more on Ford’s new business model soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
Plans for the new business model strike me as absurd. Why would Ford want to divide itself into separate ICE and EV business units? What’s the advantage, especially when there are also hybrids and PHEVs? And for dealers to have opt for one or the other? Why? However, I do like the idea of more efficient online ordering if they can somehow pull that off. The historical model of large local new car inventory has often proven to be very wasteful.
I assume that auto franchise laws may define autos in a way that doesn’t clearly include EVs. This may be the path for Ford to eventually get to a full direct-to- consumer model.
I agree with you Dee..I don’t rven own a Ford yet ( but I did buy 1000 shares of Ford and not very recently..I totally believe in the long term on that, however)…but heck nah- you’re right! What in the world is this crazy business model ( imho)..I say this not ever being in the auto industry but it seems so short sighted and – EXACTLY .why wouldn’t all dealerships sales ppl be required to sell every single type of vehicle? Absurd at least. Fyi I’m hoping to buy a Lightning next year ( tried for a Maverick just for now..there aren’t any) .I currently drive my 2nd Prius.
Mr Farley..please take a little vacation.? You’re over thinking now it seems. Don’t panic ..your long term plans are outstanding ( and why so many recalls? Is there some major issue in the Mach E department with talent?)
Please…consider some down time..We are certainly not going full EV overnight however getting off of BIG OIL and fossil fuels asap is extremely important and a short to long term goal…as much as possible asap.. right ✅️….people want your products..if this is truly the case ..evs only on line..other companies vehicles in the storeroom- that’s just strange decision making Mr Farley. With all due respect which you mightily deserve ✨️
Oops I certainly don’t think Mr Farley is an ” idiot ” however..absolutely not!
Keep up the excellent job 👏 👍 Mr Farley…it’s exceedingly stressful for you right this minute.
I think this new business model is absurd. I usually buy a new ford yearly if not multiple units per year. There is no way buying on line should ever replace the personal interaction with the dealers. I live in a rural area between North Carolina and Georgia and the local dealers are the best I have ever dealt with. When Ford fails, this will be looked upon like when Coca Cola introduced the new Coke without anticipating how the market responded. Just my 2 cents!
Disagree…a salesperson/ dealership has absolutely nothing to do with the vehicle design, assembly, quality, warranty, or MY decision as what I vehicle I will purchase. If the saleperson quits or dealership goes under, it’s still FoMoCo whom consumers will hold accountable.
No problem Mr. Farley. You switch to your new “business” model and I will switch to a new Manufacturer. Easy solution for arrogance of a manufacturer.
I agree, I ordered a Bronco, gave up, there wasn’t even a unit to drive.i bought a Ranger instead. Another headache to find a unit to drive then a bigger headache to find a unit that was equipped as I preferred. I had to tweak the zip code to look outside my area for stock. I only considered units in stock, units in transit sometimes took months to get to their dealers. My search took me 150 miles away toba large dealer who had 500 vehicles in stock, and 12 Rangers. And of course I paid MSRP. Small dealers are getting screwed, this strategy will backfire for sure. Fortunately I was Focused on Ranger, I drove the competitors trucks, the Ranger is awesome. No complaints I got 28 mpg hwy on a trip, and the truck is rated 24 hwy. Pleasant surprise.
There is no question, beyond the shadow of a doubt that Farley is an idiot! Write this down and look at it once he takes Ford down the Joe Biden path of complete failure and gets fired. I sell Fords, so I see the “sausage” being made if you will. Not a week goes by that Ford doesn’t come up with something more confusing and more complicated for the dealer or customer to navigate. I’ll tell you unequivocally that it never once benefits the customer in any way, shape or form. Farley has mastered the very fine business skill of over promising and under delivering. He’s really figured out how to introduce a new vehicle, take hundreds of thousands of reservations/ orders and then completely and utterly fail to deliver. He’ll deliver 5 percent of what’s ordered, then introduce a new vehicle only to repeat the process. Forget about getting the gold standard of a Super Duty truck. After all why focus on the number one selling truck series of all time, the F-series??!!
He mentions customer satisfaction as a main goal. That rings about as true as the statement “we’re from the government and we’re here to help” I wouldn’t let this guy mow my lawn.
I’m all about change, but this is a disaster one being whos comfortable ordering something online your elderly sure won’t be nor me middle aged I need to see and drive exactly what I’m buying. Your putting so much stress on your sales people and dealers already with chip shortages. As far as split its probably a ploy so the hard working assemblers won’t get profit sharing on certain vehicle’s. You better take a look at the economy no ones going to be buying big trucks be wise and bring back sum mid size cars. Jus my thoughts
I tried the “search all dealers” trick back in October while looking for a new Mustang. Ended up ordering it the way I wanted it. The 6 plus month wait was filled with zero communication, no responses and stress on both myself AND the selling dealership. It appeared that Ford cared less for a “14 straight new Ford” loyal customer. As it stands now, I received my 2022 Mustang Convertable in May. Absolutely love it. Did however pay for a long extended warranty. Figured to keep this one as Ford will no doubt ruin the rear wheel drive muscle car we have grown to love. Gonna drive this one till Uber takes me to the Senior Citizen Center for the last leg of my journey. I wish all of you Potential Ford Buyers the best of luck. The road ahead out of Dearborne is filled with potholes.
Robert, I can appreciate your sentiments. I can also add that my Father was a 35 year GM employee and drove Fords 32 of those years. He often said “when you see how they are built, you dang sure don’t buy one! I have had nothing but new Fords myself. That said, I waited 45+ driving years to get my Mustang. Getting it in my sixties and retired makes that my “till death do we part” car. With the costs going to the moon, and fixed-income constraints, buying large and new is a day now gone. As far as electric products go, I will buck that bronc as long as humanly possible. Mustang is garaged, warranted and my “ride off into the sunset” Pony.
Will let you carry the “new and best thing torch” from here on.
Cheers, Chad
I think the orders only idea might have been possible a year ago, but after Fords complete disaster of ordering. We ordered an Explorer in December. Was built in January. Then went on hold and we could get no information about what or when from Ford. Then ford finally sent an email that it was fixed and ready to ship on May 1 Eta a couple weeks later. Each week the date would slip another week with no info. Dealer called while i was there and was basically that Ford doesn’t care and wouldn’t even make a call. Finally got here June 15th. Found out Fords down to hiring trucks with flatbed trailers to save money in shipping. What I can say with certainty after this is that I’ll never order another Ford. Off the lot or I walk. I also know our order is not the exception as everyone I talk to is unhappy with Ford.
Go back to the 70s and 80s where you had the choice to get the vehicle off the lot, the way someone else decided it should be equipped, or you ordered exactly what you wanted and it was delivered in 6 weeks like clockwork.. ( because they actually had the parts as advertised, in their possession !!! ) I started a business and needed 5- dark blue f350 4×4 trucks and no one in my area had any. I had to go two states away to get the first two and 3 other locations to get the others. All 5 where f350 4x4s and all 5 were totally different as far as the options and features. So of course the animosities ran wild…( Why did that person get the one with power windows, premium sound, carpeting,power seats with the best motor. ) I started a new business and had 3 existing trucks, but hard work paid off and we landed most all of the contracts we had bid on and needed to get the trucks fast . I would order my personal vehicle and equip it how I want, just like my parents did and their parents before them. But back then, the dealers could tell you- the if, and, what, where, and why if you asked. Today they are clueless about everything because they are selling you something that has soooo many inconsistency and variables ( and don’t forget the manuferacturer of the product doesn’t have or even ordered the materials, parts, components ect.. to build it ) and those suppliers have to go order the parts for those parts to build what they get orders for. Ya the days of manufacturing parts inventories are over with…. We will make it when you order it inventories. The new warehouse is on the back of the truck that is on the way to the factory. God forbid something happens to the truck on the way, the function is screwed up all the way down the line to the consumer. ( And everyone has to come up with a scapegoat and pass the blame down the line.. Joe Biden has shown us the effects of change, I can tell you that I don’t like it and it isn’t or hasn’t shown any signs of being the best choice. Sure there is a right way and wrong way to do something, but why not focus on perfecting what it is that you actually do before you totally change . Look at some of the old vehicles that are still around 50, 60 + years later that will be around long after some of the products they offer us now. What do they actually think will happen in the next 10, 12, 13 years from now ? Think about it, there is going to be all these electric vehicles that are being sold today sitting in dealer lots because no one wants to buy a e used evehicle that needs a ( god only knows how much $ in 10 years ) replacement battery and Will have to pay a disposal fee to get rid of the old one. I can tell you now this hole battery thing is another environmental disaster waiting to happen. When was the last time you took the old batteries from the TV remote or the 9 volts from the smoke detectors in your home to the proper disposal center to throw away ????? I bet never. Ya, you are not supposed to throw away your batteries in your home trash that is taken to a land fill because of the toxic and hazardous chemicals they contain.. no big deal right, ??? Look at the plastic bottle is doing to our aquatic environments and the animals that rely on them for life.. yep, idiots Will be dumping the old batteries from the evehicls anywhere and everywhere. People will buy property in the middle of nowhere and dump till they can’t dump anymore and then either cover it up or just abandon the spot and move to the next on, which could be the same place your drinking water comes from, through or under. Yep, we are heading for our own destruction from dumb recessions, not being prepared, I feel sorry for my children. They are the ones who will suffer from the horabille and stupid thing our leaders are doing to this country and the world.
Bravo
Hey Robert Walter, Keep dreaming and living in la la land buddy. You’re responses are comical. Keep up your great full time job refuting reality on this comment board. Bravo dude.
I agree with several comments. Personally, on line purchases are ludicrous unless you’ve already test driven the car and know it’s comfortable, responsive, etc. I’ve been looking at cars for a year and most new models seats and head constrains are so uncomfortable ( push your skull forward and tilted to an unnatural and severely uncomfortable position) I couldn’t buy the cars. What up with that?? Why would I want to buy a car sight unseen??? I won’t be buying a FORD I guess. Dealers need to stop gouging but they should have the choice of what types to sell and service.
I would never buy a vehicle unseen, to me that’s just stupid.
In my opinion, Ford motor Co needs to start worrying about how to put vehicles on the lot for customers to purchase, and let’s not forget about quality and reliability “SUV’s” which they score very low in.
That’s what they need to be concerning themselves with.
I really want a new car, but I’d rather buy something lightly used than pay the dealerships insane markups… Got quoted $15k over the msrp last week! Something needs to he done about dealerships and their lobbyists. If Tesla can bring cars straight to the market then dealerships ought to be too, I’m tired of lining some greedy middle man’s pockets. There is no need for dealerships to continue to exist!!! Down with the dealerships!!!!!
Tesla model is go test drive a vehicle. Like it? Order it exactly how you want from website – color, options, etc. no price haggling, no having to accept a color you don’t like or a missing feature. It’s so popular, cars are backed up a year. Want something pre-built. You can do that too – no price haggling – but slim pickings these days since demand is so high. No dealers. Just service centers. Old school car manufacturers are toast unless they adapt. Reality is reality. Dealership model is dying. That’s my take. But those new ford ev f150s look pretty nice.
I cannot wait until I am able to buy a car without dealing with a dealer. The whole “negotiated price”, the sales people that usually don’t know anything, the little guy in the booth they always have to ask, the hidden fees, the markups. Dealerships are the worst part about owning a car. Going to a dealership is akin to paying taxes. I don’t like to see anyone lose their job, but dealerships are the worst part of ownership.
40 years ago I got a job driving a garbage truck in Estes Park, Colorado. The entire fleet was Ford. I asked the boss’ son why the boss liked Fords. Answer: “He prefers GM.” “Then why is the whole fleet Ford?” “There is a good dealer in this town.”
I need the dealer for parts, service, and especially to fight corporate bureaucracy when a warranty claim is needed. I don’t need the horrible dealer buying experience.
Ford tried bypassing the dealers twenty years ago. They purchased 44 stores across the
country usually buying all the stores in one market area…They failed miserably , they tried to
manage the customers like they do their employees and their machinery….Right now
they are trying to price fix your cost of buying a car. Do you think that is to a consumers advantage???????????????????????????????
As much as people want to pout about the “dealership experience” involved with buying a new vehicle it is absolutely to the consumers advantage. Well, during normal times when the supply chain is not all screwed up. With this new business model you WILL pay full price for every car. You will NOT be able to haggle. Historically people with any kind of negotiating skills could save 5-10% off of MSRP by negotiating and making dealerships compete for your business. That will be gone. So you young lazy people that think talking to people is just too much work and would rather click away at a computer mouse to get through life are costing yourselves and everyone else money.