For a period of several years following the pandemic, Ford dealers faced their fair share of trials and tribulations – much of which stemmed from a simple lack of inventory. That has since changed in a big way, with Ford dealers now dealing with inventory levels that are far higher than the industry average, which isn’t ideal, either, given the costs associated with carrying inventory. However, Ford CEO Jim Farley has long been a proponent of adopting a sales model more like the ones used by companies like Tesla and Rivian – which sell vehicles online at fixed prices with basically no inventory on lots. That hasn’t come to fruition yet, but it seems as if Ford dealers are facing some big changes in 2025, regardless.
According to The Detroit News, Ford envisions a future in which dealers will carry far less inventory, and will focus more on things like digital shopping. It’s a delicate balance for certain, as more and more consumers are either shopping for a new vehicle or purchasing one online, though those same customers also typically like to test drive vehicles before buying one, too. As such, Ford is working on the details of these changes, trying to figure out the best way to make the purchasing process easier for consumers while also leveraging the strengths of its dealer network.
“In order for retail to be successful, we need our dealers to believe in it,” said Ford Land’s Jennifer Kolstad, who called such a move “contentious.” “It comes back to predictive design. We need to be able to prove to them that the money they will invest with us will do something effective, like sell more cars, but also sell more cars to women, minority groups, and others that maybe we haven’t addressed effectively in the past. If I just sort of set it diagrammatically: Enter showroom, come to see food and beverage, let’s say and more, like a hospitality moment, as opposed to product. Product is, of course, the inevitable outcome of this. But there may be a way that’s more effective in allowing customers to govern their own journey. In the past, the salespeople kind of were like pulling people around a showroom. I guess that’s one big shift is that now customers do self-govern.”
These moves come after Ford ditched its Model e Certified program last year, which was a controversial idea aimed at modernizing the process of selling EVs, more akin to the ones that Tesla, Rivian, and other companies already use. Following immense pushback from Ford dealers, the Model e program was ultimately scrapped, but FoMoCo has remained adamant that it needs to modernize its dealership model, regardless – both in the U.S. and other parts of the world.
Comments
Streamlining the purchase process is smart, but reducing inventory will just lead to less discounts which will lead to less sales and more inventory.
Ford needs to get some leadership with half a clue, their issue is not that they’re not reaching the right customers, it’s that their prices are too high.
Reminds me of 1982 when interest rates were at nearly 30%. We had only 30 vehicles on the ground. We could get new vehicles from the factories in about two weeks. The customers loved it as they knew that nobody else had test driven their cars.
That is not a good thing when it comes to someone that just had their vehicle totaled and now want a new vehicle with the options or color that they desire. It is not on the lot and would need to wait for weeks or months to have it ordered from the factory.
I saw that happen recently and the person had to settle for something less than what they really wanted to buy, as no dealer had what they wanted, or was willing to trade, so it could not even be traded from another dealer.
If there is not going to be much inventory on lots, then ford needs to step up on customers being able to customize vehicles being ordered. Going to Costco is fun because the parking lot is filled with trucks that are all basically the same color – now which one is mine. Want a lightning with a SuperCab – well good luck with that.
The trouble is, if Chevy/GMC and Ram don’t follow this same path, then they’ll have all of the selection on hand, which leaves Ford Dealers at a possible disadvantage. The public is still not conditioned for ordering their vehicles, more so they are overly reconditioned after Covid/Chip timeframe, to really appreciate inventory levels (immediate satisfaction) coming back.
I go to the dealership to buy a vehicle THAT DAY. And I want to test drive it. I use AutoTrader to check inventory and prices. This model is yet another way to gouge and will be an immense failure.
Anything that gets dealers and their deceptive sales tactics and pressures out of the equation is just fine by me. I’ve bought and sold/leased a couple of dozen vehicles in my lifetime. Bought three Fords (Mustangs – Ford had captive audience in that market) from three different Ford dealers. Worst three dealers in my lifetime? You guessed it – all three Ford dealers. Subaru, Honda, Toyota? All a pleasure to deal with. It seems that the tactics and pressures from the “Big 3” dealers dating back to the 50’s and 60’s are permanently baked in to their DNA.
Ford leads in recalls 3 years running. Jim Farley should be replaced. At least bring the manufacturing jobs back to the US.
How about customer focus groups, or polling existing customers on what they might like to experience. As seen in the above comments, there are clearly issues with the current process. Maybe when it finally lands, it’ll be an amalgam of sorts. I would think that Tesla customers view their purchases from a slightly different perspective, than Ford customers may.
After reading Jennifer Kolstad’s idea for being successful in retail, I feel much dumber. I can’t remember reading or hearing any greater word salad in quite some time.
Ford needs to produce products that attract those customers, not try to copy sales processes of other companies. They build one car, Mustang, that is why these customers are leaving for Hyundai, Kia, Toyota, Honda and others. Rivian is losing money and they aren’t allow to sell in most states in any other way than digitally. This article makes little sense in the real world.
Jimmy boy need to go and someone with a brain needs to be in. I really don’t no how much longer the share holders will out up with this idiot .
No bailouts for the overpaid CEOs and dishonest sales people!
$10000 goes to the CEO
$10000 goes to the dealership
$10000 goes to advertising
$10000 goes to stock holders in profit
Your getting a 10000 dollar vehicle for 50K