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

[AzScorpion]

I can see a lot of incentives going away if/when they do this. You might now only see some smaller ones like if you finance through Ford credit or some end of the year ones if there's some dealer stock leftover. I would guess all the other manufacturers will get on board with this or I can see this backfiring on Ford. Why wait months for yours to be built when you can go over and buy directly off the lot somewhere else. Of course this is if you like the others product but for some not so fussy folks I can see them doing this.


https://autos.yahoo.com/ford-moving-toward-build-order-180000140.html

Ordering the exact vehicle—color, trim level, accessories, everything—that you want is how many Europeans have been buying their cars for ages. But the U.S. has been more committed to the model where shoppers go to the dealership and then drive home in one of the cars off the lot. The pandemic has changed how Americans interact with their local dealership. People are now choosing to do more communication online, and they're expressing less insistence on going out to take a test drive.

Ford noticed, and now the company wants to shift more future buyers to the vehicle ordering process, Ford CEO Jim Farley said on a conference call this week with reporters to discuss the company's second-quarter results. Getting more buyers to order a specific vehicle online can also help Ford's bottom line.

"We are really committed to going to an order-based system and keeping inventories at 50 to 60 days' supply," he said. "I know we are wasting money on incentives."

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[RecoilOperated]

I'm assuming they'll keep a decent supply on lots of the most popular configurations but the days of overflow lots with 150+ vehicles in stock are probably over.

 

[Rene Michaels]

I can see a lot of incentives going away if/when they do this. You might now only see some smaller ones like if you finance through Ford credit or some end of the year ones if there's some dealer stock leftover. I would guess all the other manufacturers will get on board with this or I can see this backfiring on Ford. Why wait months for yours to be built when you can go over and buy directly off the lot somewhere else. Of course this is if you like the others product but for some not so fussy folks I can see them doing this.


https://autos.yahoo.com/ford-moving-toward-build-order-180000140.html

I think you will see this happen more and more with manufacturers of any product. The old distributor/dealer model is antiquated and actually less profitable for many manufacturers. Direct-to-consumer via Internet is here to stay.

 

[JohnnyO]

Ordering the exact vehicle—color, trim level, accessories, everything—that you want is how many Europeans have been buying their cars for ages. But the U.S. has been more committed to the model where shoppers go to the dealership and then drive home in one of the cars off the lot. The pandemic has changed how Americans interact with their local dealership. People are now choosing to do more communication online, and they're expressing less insistence on going out to take a test drive.

Ford noticed, and now the company wants to shift more future buyers to the vehicle ordering process, Ford CEO Jim Farley said on a conference call this week with reporters to discuss the company's second-quarter results. Getting more buyers to order a specific vehicle online can also help Ford's bottom line.

"We are really committed to going to an order-based system and keeping inventories at 50 to 60 days' supply," he said. "I know we are wasting money on incentives."

Well, it would reduce inventory and interest costs.
About 20 years ago my dad ordered a new BMW. Turned out to be the biggest POS he ever owned but that's another story. What was impressive was that the order went from Pittsburgh to Germany, the car got built, put on a boat, and arrived at the dealer back in Pittsburgh four weeks to the day after he ordered it.

 

[janitorjim]

might be dealers become more of a used car lot (if that isn't where they are right now)

 

[AzScorpion]

I think you will see this happen more and more with manufacturers of any product. The old distributor/dealer model is antiquated and actually less profitable for many manufacturers. Direct-to-consumer via Internet is here to stay.

I think so to Rene especially with all the parts constraints now. Why waste parts on vehicles just sitting on a lot when you. can save them for direct orders? They'll have to have some dealer stock but not parking lots full like we're use to. Now hopefully they can get these orders to customers better than the Expedition/Bronco launches.

 

[RedlandRanger]

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.

 

[AzScorpion]

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.

I can see the build/delivery times getting shorter. Not having to produce dealer stock would shave off a lot of time for those with builds and should just about cut it in half. They say it only takes roughly 1 day to build a unit and now there wouldn't be a mass of vehicles waiting for transport either.

 

[Rene Michaels]

I think so to Rene especially with all the parts constraints now. Why waste parts on vehicles just sitting on a lot when you. can save them for direct orders? They'll have to have some dealer stock but not parking lots full like we're use to. Now hopefully they can get these orders to customers better than the Expedition/Bronco launches.

IT will cut down on waste like this:
https://boredombash.com/unsold-cars-go-to-die/

 

[Joeiconic]

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.

 

[canyonslicker]

Will warranty work be outsourced???

will there be just show rooms so you can touch, feel, sit, smell and not test drive??

it kinda makes sense on the surface but there are other unexpected consequences…

I wouldn’t have chosen the Ranger if I couldn’t interact with one first. However it looks as if the internet warriors have no problem with it…

 

[Joeiconic]

will there be just show rooms so you can touch, feel, sit, smell and not test drive??

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.

 

[RedlandRanger]

I think the other thing they are going to need to up their game on is the order tracker - right now it is pretty basic info and it is not terribly reliable.

Although I ordered my Ranger before I was able to test drive one, I only did that because I had high confidence it wouldn't disappoint me since it wasn't really a new vehicle. I did test drive one after I ordered mine but before it was delivered which confirmed my decision. I think that they will still need to have test drives available - I don't think there are THAT many people that will buy a vehicle sight unseen. Although I guess people are now buying houses that they've never stepped foot in, so maybe I'm just old fashioned.....

 

[Apples]

My experience with ordering what you want.

My first was a 1983 Mercury Cougar, with every available factory option except a sun roof, trailer hitch, and two tone paint. It was, according to the dealer the first V8. It has throttle-body injection to boot. Took 3 months to get, only to find out the rear brakes were 7 inch drums, and if the weather was cold (I lived in Denver, then), it wouldn't stop when backing up. The alarm quit, the push button entry system failed three times, and the list goes one.

I tried it again in 2003, but the dealer ordered the car twice, and still got it wrong. The first one that arrived after 3 months, was the wrong color! The second one didn't have automatic HVAC, even though it was on "my" copy of the build invoice.

If Ford doesn't do any better these days, perhaps they should transfer their EU VP, and let him try to straighten thing up!

Until then, nada for me!

 

[Langwilliams]

I think it may shift to a half order half lot inventory model. Too many purchases are impulse buys. I stopped in for an oil change for my fusion. Walked around the lot an drove a new ranger home.

Then there's the people that need a car in a hurry. An accident takes out their current car or it has a major failure like an engine or transmission.

Any car salesman will tell you if they "go home to think it over" it's probably a lost sale.

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