Ford Changing Dealership Model for EV's

[TitanMike]

https://techcrunch.com/2022/06/02/fo...t-a-set-price/

Needless to say many Dealers aren't happy.

As I read this there will be no more huge flooring plans where the Dealer orders what he thinks will sell, usually more fully loaded vehicles than basic. They also like to add "2nd Stickers" with additional Dealer installed options (out here undercoating is popular even on top of the factory coatings) or just plain additional markup on popular vehicles.

If Ford successfully implements this model customers will "build" their new vehicle without the assistance/push of a salesman and no more negotiating games with the salesman going back and forth to "his manager" while haggling.

From Ford's perspective I can see some economies. No more huge numbers of vehicles sitting around the country just dressing up the dealer's lots with all that money tied up. Customer orders, pays (or finances), then takes delivery from the dealer.

Dealers also no longer have the monthly interest payments for flooring plans.

What the Dealer's are no doubt complaining about is the inability to "pack the Deal" with all kinds of profit enhancing add-ons.

Should be interesting, especially as the sales of fossil fueled vehicles is reduced by government mandate.

[Reverse_snowbird]

It was bound to happen. You can buy a used car online from several apps and have it delivered to your home or pick it up in a 'tower.'
I found my new KIA online through the manufacturer's website that allows you to pick your model and options then displays which dealer has your choice in stock and lists things like financing options. My local dealer had it so I walked in, told them what car I wanted, test drove it, financed at 0%, traded in the old car, and was out the door in less than 2 hours. A friend bought a different make from a dealer in another state, had it shipped to their home through an online app.

With the shortage of truck right now, people are ordering their new trucks with options through the dealers. It's not much of a leap to eliminate the dealer from the ordering process. Last time I went to our KIA dealer for service their 20+ sales desks were staffed by 2 people. Over the years, I've watched our local dealers expand their service departments dramatically. Looks like that trend will continue.

[Oaklevel]

I am not surprised but..............

I guess never say never but the new EVs are considerably priced above what my DW and I will ever be able to afford............so to us it really does not matter. We probably bought our last new car in 2017.

[Flybob]

This is what Tesla has been doing for years. Most Tesla sales are completed without ever uttering a word to the dealer. As a result of Covid this has extended to deliveries. You simply go to the dealer when notified, check out the car drop off your check if not financing thru the dealer and drive away. What is interesting is that several years ago major auto makers sued Tesla for adopting this model thereby threatening dealership existence.

[aircommuter]

Originally Posted by Flybob

This is what Tesla has been doing for years. Most Tesla sales are completed without ever uttering a word to the dealer. As a result of Covid this has extended to deliveries. You simply go to the dealer when notified, check out the car drop off your check if not financing thru the dealer and drive away. What is interesting is that several years ago major auto makers sued Tesla for adopting this model thereby threatening dealership existence.

I think it is a little different as Tesla owns the dealership? At any rate if dealers profit goes down they will make it up somewhere. Those EV mandates are likely a pipe dream. They just ramped up coal use since oil and NG prices are higher. They are a long way from being able to run millions of cars and trucks on electricity, and if they ever do the price of electricity will soar to match.

[Flybob]

Originally Posted by aircommuter

I think it is a little different as Tesla owns the dealership? .

Likely the next move.

[aircommuter]

Originally Posted by Flybob

Likely the next move.

Case tractor started doing that years ago, but then they went back to individual dealers again. More exposure especially for parts. The aftermarket was selling parts at more locations so the factory sales went down. Attachments were a big sales item too.

[Tabasco_Joe]

Originally Posted by TitanMike

https://techcrunch.com/2022/06/02/fo...t-a-set-price/

Needless to say many Dealers aren't happy.

As I read this there will be no more huge flooring plans where the Dealer orders what he thinks will sell, usually more fully loaded vehicles than basic. They also like to add "2nd Stickers" with additional Dealer installed options (out here undercoating is popular even on top of the factory coatings) or just plain additional markup on popular vehicles.

If Ford successfully implements this model customers will "build" their new vehicle without the assistance/push of a salesman and no more negotiating games with the salesman going back and forth to "his manager" while haggling.

From Ford's perspective I can see some economies. No more huge numbers of vehicles sitting around the country just dressing up the dealer's lots with all that money tied up. Customer orders, pays (or finances), then takes delivery from the dealer.

Dealers also no longer have the monthly interest payments for flooring plans.

What the Dealer's are no doubt complaining about is the inability to "pack the Deal" with all kinds of profit enhancing add-ons.

Should be interesting, especially as the sales of fossil fueled vehicles is reduced by government mandate.

I question how well this will work.
A lot of people buy based on impulse at the dealership.
Some people will even buy a higher model simply because the color is available in that model on the lot.


If Ford tries to set prices across dealerships, it may be seen as price fixing.

[yukongold]

IMO, this would be awful for the consumer if it became the industry standard. On-line purchasing can be optimal for some things but - again IMO - some things just need to be touched, felt, sat in, and otherwise experienced first-hand before purchase. A vehicle is one of them. How would you comparison shop when no dealer has inventory?
From the article: "In the future, dealers won’t hold any inventory, he added. Instead, the vehicles will ship directly to the customer, with remote pickup and delivery." How would you know, before-hand, that this car/truck just "feels right" when you sit in it? How would you know if you are satisfied with all of the variables that go into a car/truck experience without a test drive? Things like performance; ride comfort; sound levels; braking; etc.. And, as Joe said, what about us impulse buyers? I have, more than once in 50+ years of auto ownership, walked into a dealership "just to look" and driven out with a new vehicle.

Dealerships would become nothing more than repair shops - - - and I already have an independent shop that I use and trust more than ANY dealer shop I EVER used.

[1100mike]

Saturn had fixed price, lasted what, 15 yrs?

[Semperfi24]

Didnt Saturn do this back in the late 90s. The idea of "this is the price, and this is what you pay". To eliminate haggling and all of the back and forth. Kind of like, you dont go into Best Buy and negotiate a price for the television, there is a price sticker on the television, you pay that or you go somewhere else...

[Tabasco_Joe]

Originally Posted by Semperfi24

Didnt Saturn do this back in the late 90s. The idea of "this is the price, and this is what you pay". To eliminate haggling and all of the back and forth. Kind of like, you dont go into Best Buy and negotiate a price for the television, there is a price sticker on the television, you pay that or you go somewhere else...

My brother bought one and he negotiated the price down a bit.

I wonder if price haggling for autos isn't part of the American culture.
Most people negotiate some discount. The dealer still makes a lot of money. And the buyer thinks he got a great deal and is a fantastic negotiator.