Ford Moving toward Build-to-Order, Away from Packed Dealer Lots

[wanted33]

Well folks, the times they are a changin'. I've special ordered most all of my new vehicles since 1986, and never had a problem. Of course I chalk that up to my local Ford dealer being good at what they do. When Farley said, "I can see a lot of incentives going away" I thought, "Well, hold onto your wallet" unless they start realistically pricing their vehicles. I'm old enough to know that pricing and incentives are all relative, and when manufacturers give you that $1000 incentive much of it has been baked into the price. Folks of my generation along with a couple in front and behind me are used to the game, and know you never pay sticker for your everyday run of the mill grocery getter. But with the younger generations being used to living their entire lives on line I can see this working. As more, and more of us older generations fall away the younger ones won't know any different.

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[JohnnyO]

I can see dealers stocking basic models to cater to the fleet/ commercial industry, plus mostly loaded vehicles in the most popular colors, but requiring that you order if you want to customize. It would suck if you needed a car quick, like if your current vehicle was totaled in an accident. Maybe they think they can get the lead time down to a few weeks.

This is the way everything is going so I guess cars should be no exception. The days of going down to Sears and coming home with whatever you needed are over.

I was a salesman at an Oldsmobile and Cadillac dealership in the 80's. We always had a lot of sold orders out there because the location was very limited in terms of space and therefore selection. The owner would prefer that you sold something out of stock since he was paying floorplan on it and it kept people from going to another dealer but a sold order was still a sale. At that time my county had 2 Ford dealers, 2 Chevy dealers, and 5 Olds dealers.

 

[vanapagan]

I see a simple economics and manufacturing problem with a mostly build to order model. Basically, efficiency. It is easier and more cost effective to build 1,000 units of a certain model with certain equipment packages in a particular day than it is to build 1,000 one up models.

Just the added cost of having to have parts on hand and staged when you are talking about large numbers of units is a costly nut in money and logistics. Why pay a UAW worker to sit around just to install a handful of option items when you can schedule a run where that worker is installing their part all day?

Batching up similar build orders to make it worthwhile will elongate fulfillment times too. Imagine being told that your order is being pushed out because you chose an unpopular option and they are waiting for more people to make the run worthwhile?

If Ford does go this route of build to order expect more options to be bundled together into larger packages like many of the Japanese manufacturers do.

Additionally, I think many options that were once factory installed only will now be available as dealer installed but that will require product redesign to accommodate. This way, Ford won't lose a sale for the customer who cannot wait weeks/months for a vehicle that is ordered and has to choose from something off the lot.

 

[puckdodger]

I could see dealers offering a temporary rental fleet if you order a car and need another immediately.

don't give them any more ideas....

 

[maxbottomtime]

don't give them any more ideas....

I didn't say charge for it haha. What the heck else is the dealer good for? Seems this minimizes their importance (which I'm not against).

While current prices are pretty rigid, there's also a level of haggling you aren't getting with direct orders. If cars tend to send 2K under MSRP regularly, and now 60% of sales are expected to be custom orders at full MSRP, then I suspect other makes will do very well.

 

[JohnnyO]

I see a simple economics and manufacturing problem with a mostly build to order model. Basically, efficiency. It is easier and more cost effective to build 1,000 units of a certain model with certain equipment packages in a particular day than it is to build 1,000 one up models.

That’s basically how I was told it works when I was a car salesman. They don’t change the color in the paint guns for every car, they make 50 red ones, then 50 white ones, etc.

 

[Motorpsychology]

In the EU, half or more new vehicles are customer order. Dealers here get factory or financial institution floor plan assistance on their inventory, but it doesn't cover after a certain length of time.
I don't think it would involve too much engineering change to accomplish going to a customer-spec business model. It's been done for decades in the fleet industry. Conversion Vans of the 70's-90's were done this way. Fire engines, cop cars, utility trucks, ambulances are still built this way. Raw chassis go to a bailment company. who installs the body and apparatus (cranes, hydraulics, etc) and they put their equipment on different brands of chassis.

 

[AzScorpion]

I didn't say charge for it haha. What the heck else is the dealer good for? Seems this minimizes their importance (which I'm not against).

While current prices are pretty rigid, there's also a level of haggling you aren't getting with direct orders. If cars tend to send 2K under MSRP regularly, and now 60% of sales are expected to be custom orders at full MSRP,

then I suspect other makes will do very well.

I would guess most if not all the other manufacturers are going to go this way too. This makes even more sense with Fords investment (Billions) into EV over the next few years. With the change over from ICE-EV/PHEV there will be a lot of holdouts who will still prefer an ICE vehicle. There's no way it would be cost effective for Ford (and the dealer) to fill the lots with both.

 

[AzScorpion]

That’s basically how I was told it works when I was a car salesman. They don’t change the color in the paint guns for every car, they make 50 red ones, then 50 white ones, etc.

Yes that's exactly how it is, they get painted in batches. I've seen the pictures and videos of the new Bronco's coming off the line. There's a mix of Rangers in there too and they're all the same color.

 

[spartan0078]

Damn right deals will go away. There's not gonna be anymore huge dealerships buying 100 trucks at once and getting a huge discount they pass on to us to get our business. ?

 

[jsphlynch]

That is the Tesla model now. You may be able to test drive a sample model, but otherwise I believe they are order only. Someone correct me if I’m wrong.

My brother was a day-1 reservation holder for the Model 3. When his number finally came up, he didn't have a the opportunity to test drive one from Tesla before finalizing his order. He actually ended up renting one through Turo before committing to the order. I thought it was a little odd to be paying for a test drive, but he was happy (and to be fair, at the time Tesla had a 7-day full-refund guarantee if you didn't like your car after taking delivery).

Online order is a model that will work for quite a large number of consumers, but as for me, I like to try out cars and shoes before purchasing.

 

[Porpoise Hork]

Damn right deals will go away. There's not gonna be anymore huge dealerships buying 100 trucks at once and getting a huge discount they pass on to us to get our business. ?

I started looking into selling the Ranger and going for an F150 and the salesman stated that Ford is all but demanding that it be special ordered and the only incentives they can apply are the trade-in offers currently available. He also stated that Ford is not allowing them to apply X-Plan pricing on any vehicle that is on the lot and would have to make special requests for special orders to ensure we get that pricing. He did state that to place an order I'd have to make a $500 deposit but that it's 100% refundable if I change my mind and decide to not buy it once it arrives. This is really going to change the car buying experience. The massive multi-acre dealerships will be a thing of the past. They'll probably be reduced to a fraction of what they are now.

Not to mention how this will impact people who need to replace their current car for various reasons but cannot wait for it to be built. With the dealerships having minimal on-hand stock they will either have to settle for something they don't want, or have to pay for a long term rental.

 

[RBTremor]

I think it COULD work if two things happen:

1. They shave the price to reflect the savings that they are getting from this model. Maybe offer an additional $1-2000 off for special orders while still doing things like X-Plan pricing.
2. They need to get more efficient at reducing the time to delivery. 8-12 weeks (or more) is too much for many people to wait in this instant gratification society.

Just ordered a 2021 Tremor and Ford is offering $1000 off to "Build your Own" orders and honoring A Plan.

 

[Grussell]

I think it COULD work if two things happen:

1. They shave the price to reflect the savings that they are getting from this model. Maybe offer an additional $1-2000 off for special orders while still doing things like X-Plan pricing.
2. They need to get more efficient at reducing the time to delivery. 8-12 weeks (or more) is too much for many people to wait in this instant gratification society.

8 to 12 weeks is also too much to ask when they aren't currently capable of delivering in that time period. I ordered in mid-April for a mid-July delivery that isn't scheduled to be built until next week and with the time to deliver to the dealer taken into account, I will be lucky to have it in early to mid-Sept. If it comes in the second week of September, that will be 20-21 weeks since it was ordered.

 

[Porpoise Hork]

If it comes in the second week of September, that will be 20-21 weeks since it was ordered.

When I asked the salesman how long for delivery on the F150 he said it'd be about 3-4 months...

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