Ford issues ultimatum to their dealers
09-15-22, 12:52 PM
#1
Lexus Champion
Thread Starter
Ford issues ultimatum to their dealers
Comply if you want to keep selling EVs
This feels like a giant crap storm brewing I predict Farley will cave to the dealers and not much will change.
Ford Gives Dealers Six Weeks To Decide If They Want To Continue Selling EVs
In what will certainly send shock waves across the industry, Ford dropped a bomb at its annual dealership meetings in Las Vegas this week. InsideEVs was one of only a handful of news outlets invited to get an early look at the new Model E dealership rules, which included a presentation from Ford CEO Jim Farley.
In short, Ford is telling its dealer network they have to invest, evolve, improve, and offer new services if they want to be a Model E dealership and sell electric vehicles. Model E is a new division that was created when Ford split the company into three arms: Ford Blue Oval, Ford Pro, and Ford Model e. All of Ford's fully electric vehicles now fall under the Model e umbrella, while plug-in hybrids and regular hybrids are part of Ford Blue Oval.
Ford is giving its dealers until October 31st of this year – less than two months – to make a decision that will have huge implications for the future of the franchise. The company is offering its dealers three options:
In what will certainly send shock waves across the industry, Ford dropped a bomb at its annual dealership meetings in Las Vegas this week. InsideEVs was one of only a handful of news outlets invited to get an early look at the new Model E dealership rules, which included a presentation from Ford CEO Jim Farley.
In short, Ford is telling its dealer network they have to invest, evolve, improve, and offer new services if they want to be a Model E dealership and sell electric vehicles. Model E is a new division that was created when Ford split the company into three arms: Ford Blue Oval, Ford Pro, and Ford Model e. All of Ford's fully electric vehicles now fall under the Model e umbrella, while plug-in hybrids and regular hybrids are part of Ford Blue Oval.
Ford is giving its dealers until October 31st of this year – less than two months – to make a decision that will have huge implications for the future of the franchise. The company is offering its dealers three options:
- Become a Model E Certified Elite dealership
- Become a Model E Certified dealership
- Discontinue selling Model E vehicles effective January 1st, 2024
09-15-22, 01:05 PM
#2
Super Moderator
1. Fewer, higher-quality dealers
2. An end to ADMs
#2 is the big one. Dealers tacking on huge ADMs are pissing off customers and driving them away from the brand, which hurts Ford as a company, along with other more honest dealers through "guilt by association".
One of the requirements of the Model E agreement is that dealers will not sell cars for over MSRP. Of course, Ford can't legally prevent them from doing so. But the agreement allows them to stop shipping cars to dealers that violate the agreement.
09-15-22, 01:38 PM
#3
Lexus Champion
Thread Starter
Ford's initiative is already a half measure
People can cross shop now that doesn't stop price gouging. Dealer to dealer price differences nullifies the entire EV sales structure Ford is trying to emulate. "Everyone gets the same price (MSRP) except different prices depending on dealer, shop around".
Exactly like it is now.
The new rules for Model e dealerships require dealers to post set prices for the electric vehicles online at Ford's website. Customers can view the set pricing, complete the purchase online, and even schedule home delivery. But ultimately, it's the dealer's decision what the set pricing will be for the vehicles, and there will likely be price variation from dealer to dealer. Customers will be able to cross-shop different local dealers' prices online, and then choose the one with the lowest set price. The dealers must honor the set pricing for every purchase, and Ford will be checking the purchase orders to make sure that happens.
Exactly like it is now.
09-15-22, 01:45 PM
#4
The dealership sales model is costly due to the added cost component. Ford's margins already pale in comparison to Tesla's. The dealership is part of that.
Customer's trust in dealers is pretty much zero.
The Internet has changed the car market in so many ways. CEO Farley knows what he is doing; I wish him and his company well.
VW blew it when they canned Diess.
Customer's trust in dealers is pretty much zero.
The Internet has changed the car market in so many ways. CEO Farley knows what he is doing; I wish him and his company well.
VW blew it when they canned Diess.
09-15-22, 02:57 PM
#5
Pole Position
What they're trying to stop is the practice of adding undisclosed ADM at the point of delivery. Because you can choose any dealer when you order, it's not that hard (subject to your local market) to place the order with a sensible dealership. What's been happening is vehicles have been ordered, assumptions made/represented that the selling price will be MSRP, and when a VIN is created once the production is scheduled and the order can't be moved the dealership whips out the surprise ADM. Both my Fords (and my Land Rover for that matter) were at MSRP, but many others were not so lucky. I think Ford is really telling dealers to follow some basic rules or risk Ford selling the Model E division vehicles the way that Tesla sells them. The separation into divisions prepares them for that. If the Model E division were to spin off, it would likely not be bound by franchise rules and they could be sold the way Tesla, Lucid, Rivian and others sell vehicles.
09-15-22, 03:56 PM
#6
Lexus Fanatic
Ford probably can prevent dealers from selling over MSRP.......Saturn and Scion did so without any problems. But, like those two companies, it will take a new franchise-contract. If you wanted to sell Saturns or Scions, you signed the contract and promised to abide by a no-dicker/MSRP policy. Violation of those terms could mean loss of the franchise.
09-15-22, 06:36 PM
#7
Ford probably can prevent dealers from selling over MSRP.......Saturn and Scion did so without any problems. But, like those two companies, it will take a new franchise-contract. If you wanted to sell Saturns or Scions, you signed the contract and promised to abide by a no-dicker/MSRP policy. Violation of those terms could mean loss of the franchise.
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09-16-22, 12:29 AM
#9
Lexus Test Driver
Since they can't get them out the door fast enough supply is limited while demand is high as everyone knows.
I hope they can ax the dealers that abuse the situation and get the rest of them in line.
09-16-22, 06:21 AM
#10
Lexus Fanatic
I like this guy's attitude about dealers...
09-16-22, 07:07 AM
#11
Lexus Fanatic
09-16-22, 07:23 AM
#12
Lexus Fanatic
09-16-22, 09:44 AM
#13
Lexus Fanatic
This has to be a US site
How long you should expect to wait depends on the Toyota model and spec that you’ve ordered. For Toyota hybrids and plug-in hybrids, wait times are commonly around one year. For the Toyota RAV4 Prime and Prius Prime, wait times are now 18 months to close to two years. Keep this in mind if you’re in the market for a Toyota plug-in hybrid.
09-16-22, 12:13 PM
#14
Lexus Fanatic
I'll let Jill clarify it, but I think she is talking about those along waits for a factory-order.
I waited 4-5 months for both my factory-order Lacrosse and Encore GX...and that was before the computer-chip shortage was really screwing things up.Obviously, most vehicles sitting on the lot not already marked sold, or being reserved for someone, are fair game....write your check and take one home.
09-17-22, 08:36 AM
#15
Lexus Fanatic
Toyota/Lexus have always had long factory order times