Fords future

[D Fresh]

I spent 12 yrs as a software vendor working with dealers; worked with 20yr dealer principals to salespeople who had 1 week experience. Same for service, fixed ops directors to greenpea service writers. 70 store groups down to small town dealers with no competition for hrs away. Was a magnificent education in the franchise dealer world, how they make money, how they are motivated, how they co-exist with their manufacturers, etc. I added it up once and I worked with over 300 unique dealerships in over 30 states.

There are some good people in the industry for sure, but by and large it’s unfortunate that a majority of the stereotypes are true. Many dealers are successful in spite of themselves, not because of themselves (they have a new commodity each year and you have to use them to purchase it). Most industry people even hate having to deal with other dealers to purchase their own cars even because they know how the game is played.

All that being said, there are may 10 out of those 300 I visited I would send my own mother to in order to purchase a vehicle, which is exactly the reason they will be out of business selling new vehicle someday sooner than later. Their only value was a pleasant client experience, and 90% fail at that so the public is rejecting them and OEMs know it.

Dealer shenanigans hurts OEM brand image which hurts profits because all they want to do is make and sell new vehicles. Many dealers do see that the OEM wants to squeeze them out, but the OEM has more power in their franchise agreement and will make it happen come hell or high water. Direct to consumer works.

I appreciate the insight and whole heartedly agree. In my mind dealerships are only there to answer one question, "how much?" And if I don't like the answer, I'm on to the next.

However, this new model doesn't work for me either. I research the hell out of my vehicle purchases. It was a roughly 8 month process for me to settle in on a Ranger, maybe 4 if I hadn't entertained a Bronco reservation for a few months before I came to my senses.

When it came time to buy I was ready for my truck. It was found and purchased in a matter of a week and a half. If I had to wait another 6-9 months for the ordering process, I wouldn't have done it. Period. I would have bought used or not at all.

Ford has absolutely proven with the Bronco, Mach E, and now the Lightning, that their version of build to order DOES NOT work.

And it doubly DOES NOT work with just in time supply chain setups and current product shortages.

People want a new car when they want it. Not 2+ years later.

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[MarkP]

Dealers can make money without being scumbags. I bought Dodge trucks from Jasper (Ga) Jeep in 1996 and 2003. They had a no-haggle price that was $something I don’t remember over invoice. It might not have been the best of all possible deals but it was a decent deal and a painless purchase. But direct-to-buyer is a model that can work if the states that have dealer protection laws can be circumvented.

 

[importfighter01]

I appreciate the insight and whole heartedly agree. In my mind dealerships are only there to answer one question, "how much?" And if I don't like the answer, I'm on to the next.

However, this new model doesn't work for me either. I research the hell out of my vehicle purchases. It was a roughly 8 month process for me to settle in on a Ranger, maybe 4 if I hadn't entertained a Bronco reservation for a few months before I came to my senses.

When it came time to buy I was ready for my truck. It was found and purchased in a matter of a week and a half. If I had to wait another 6-9 months for the ordering process, I wouldn't have done it. Period. I would have bought used or not at all.

Ford has absolutely proven with the Bronco, Mach E, and now the Lightning, that their version of build to order DOES NOT work.

And it doubly DOES NOT work with just in time supply chain setups and current product shortages.

People want a new car when they want it. Not 2+ years later.

This is exactly part of what stops them from making this change faster. They have not mastered just in time supply management (or at least an acceptable version of it).

I kind of wonder if they might do something like produce partial builds for warehousing then roll out the partials already painted your preferred color to a final assembly line where you get options built in (like a Lariat week vs XL week so max wait is 6 weeks or less or something). I know we have resident experts on these manufacturing procedures who could speak to that feasibility.

Or going a different direction I wonder if OEMs will produce like they do today (but leaner) and pay the dealers to “warehouse” their product. They already have a distribution network to the dealer locations and they know what sells best where. Someone non-OEM owns the real estate the dealership infrastructure sits on who could make money by having Ford pay them for the warehousing too. This would allow dealers to still make money as business operators yet have none of the overhead that a traditional dealer new vehicle sales model brings. Dealers could still have a used vehicle operation and service vehicles same as today.

Will be very interesting to see how it all works out…

 

[P. A. Schilke]

I kind of wonder if they might do something like produce partial builds for warehousing then roll out the partials already painted your preferred color to a final assembly line where you get options built in (like a Lariat week vs XL week so max wait is 6 weeks or less or something).

Hi IF01,

Can you imagine the size of a warehouse to house already painted bodies? We already weld bodies together and store them unpainted...so an order comes in and a unpainted body/pick up box are put on line, painted and then sent down the trim lines for spec'd options etc. So we already do something like you envision.... The delays are currently related to workforce and chip/part shortages which are extending delivery times.

A typical assembly plat when I was at Ford was 40 plus units an hour and on a double shifted plant of 10 hours a shift...(4 hours for maintenance) that is 800 units per day...so to go to an order based system where there is no dealer stock results in New Car Sales staff becoming Used Car sales staff...with used car sales people having such a poor reputation over all... UG!

Best,
Phil

 

[importfighter01]

Lol so true Phil on the staffing conundrum. Good to know with labor and chips the ordering situation could improve, I’m super curious how this will all work out in the end.

The manufacturers have a commodity people want to buy and a “middle man” neither the OEM or the end consumers are excited to work with…yet both parties “have” to work with. I feel most badly for the “good” dealers out there who don’t pull shenanegans like $1k doc fees, $400 window etch, $200 nitrogen, and a $400 pack. In their case it’s the many who can ultimately ruin it for the few. And sad thing is I witnessed many times the bad eggs bragging about how they snowed a consumer for their personal financial gain…

 

[Dgc333]

This is exactly part of what stops them from making this change faster. They have not mastered just in time supply management (or at least an acceptable version of it).

I kind of wonder if they might do something like produce partial builds for warehousing then roll out the partials already painted your preferred color to a final assembly line where you get options built in (like a Lariat week vs XL week so max wait is 6 weeks or less or something). I know we have resident experts on these manufacturing procedures who could speak to that feasibility.

Or going a different direction I wonder if OEMs will produce like they do today (but leaner) and pay the dealers to “warehouse” their product. They already have a distribution network to the dealer locations and they know what sells best where. Someone non-OEM owns the real estate the dealership infrastructure sits on who could make money by having Ford pay them for the warehousing too. This would allow dealers to still make money as business operators yet have none of the overhead that a traditional dealer new vehicle sales model brings. Dealers could still have a used vehicle operation and service vehicles same as today.

Will be very interesting to see how it all works out…

The issues happening now with delays in delivery are not the norm. I have purchased a lot of new cars over the past 50 years and the majority of them were factory orders. The typical time from order to delivery is 8 weeks with the shortest being 6 weeks for a 12 Focus we ordered right after the new Mk3 came out in 2011. The longest was 12 weeks for a Dodge Daytona Turbo ordered in 1985. That was a dealer screw up in that they didn't place the order for 4 weeks because the sales person quit and never turned the order in. My last ordered new vehicle was my 17 Mustang. It was ordered on 4/11, on 4/13 it was scheduled for the week of 5/8, it rolled off the assembly line 5/10 and I took delivery 6/10.

As far as dealers warehousing for the manufacturers that has been going on for years. There was a Buick, Olds, Pontiac dealership near where I live that used to have a couple of thousand new cars on hand at all times to supply all the other dealers in the area. Don't know how much they were compensated for having manufacturer owned inventory but it must of have been worth while. The Ford dealer about 15 miles from my house has about 1000 commercial vehicles on there lot now. Almost all of them are white and are identically optioned that are being shipped to other dealers as needed. They have almost no inventory of consumer vehicles.

FWIW, the Ford dealership where I purchased my last 5 new vehicles makes 2 to 3 times more on a used car sale than new. Back in 17 when I was ordering my Mustang I asked the sales manager what they made on each new car sales and he told me the average was $800 and they sold about 1000 new cars per year. The sales departments profits came from used car sales, extended warranties, tires for life deals, wax for life deals and kick backs on loans.

The people that will be hurt by dealers not having inventory are the ones that need a vehicle today. They will be forced to buy used if they can't wait 8 weeks.

 

[D Fresh]

This is exactly part of what stops them from making this change faster. They have not mastered just in time supply management (or at least an acceptable version of it).

I kind of wonder if they might do something like produce partial builds for warehousing then roll out the partials already painted your preferred color to a final assembly line where you get options built in (like a Lariat week vs XL week so max wait is 6 weeks or less or something). I know we have resident experts on these manufacturing procedures who could speak to that feasibility.

Or going a different direction I wonder if OEMs will produce like they do today (but leaner) and pay the dealers to “warehouse” their product. They already have a distribution network to the dealer locations and they know what sells best where. Someone non-OEM owns the real estate the dealership infrastructure sits on who could make money by having Ford pay them for the warehousing too. This would allow dealers to still make money as business operators yet have none of the overhead that a traditional dealer new vehicle sales model brings. Dealers could still have a used vehicle operation and service vehicles same as today.

Will be very interesting to see how it all works out…

Who knows how it'll end up. I'd be perfectly happy if I could go somewhere local, look around, pick and buy a Ford. From Ford. There's certainly no need for the dealerships. If Ford ran one or two "sales/service centers" with a few vehicles ready for purchase, but the majority ordered, a la Tesla, I'd be ok with that.

But I can't see how they can make that transition legally with dealership agreements that MUST be in place. Instead, I see dealerships morphing into these sales/service centers. I'd hope that in the process, the dealerships would lose control over their pricing. They'd almost function as a simple contractor to Ford, providing the location/staff only, similar to your second scenario.

Who knows. But if production can't get back to normal the entire industry is FUBAR'd.

 

[LT Dangle]

Lol so true Phil on the staffing conundrum. Good to know with labor and chips the ordering situation could improve, I’m super curious how this will all work out in the end.

The manufacturers have a commodity people want to buy and a “middle man” neither the OEM or the end consumers are excited to work with…yet both parties “have” to work with. I feel most badly for the “good” dealers out there who don’t pull shenanegans like $1k doc fees, $400 window etch, $200 nitrogen, and a $400 pack. In their case it’s the many who can ultimately ruin it for the few. And sad thing is I witnessed many times the bad eggs bragging about how they snowed a consumer for their personal financial gain…

I had to use a dealer that I would not have otherwise gone to when I bought my Ranger, (current/ inventory shortage BS) and Im thankful that they didnt get pushy about it but they tried doing the $2500 over MSRP BS due to lack of stock, and then once negotiated past all that... at pick up they tried the whole extended warranty nonsense, but not even the Ford one, they tried selling me on some in house thing.. and then tried to hit me with $650 for "new vehicle prep and detailing" ? ? ? ? ?

Dealers are getting out of control with all this BS. Thankfully, as I mentioned, they werent pushy about it but jeeeezzz. 650 to wash the car? GTF Ouutaaa Here

 

[Alpinist]

As I understand it, many if not most dealerships make most their money from the service department anyway. Take away the new cars sales, keep the service department. A dealership owner may not like that but I don't care about them.

Auto sales is just about the last remaining shenanigan-filled niche in a world that turned to more straight forward and transparent sales.

I'll add to the chorus - I've yet to meet a dealership sales person who knew any critical details about the product they sell. In 'sales' I suppose there's some tradition, pride and science behind 'close that deal, screw that customer.' How about they just accept a fair profit margin and ring me up at the register?

My most dishonest experience in a decade occurred this year at Sound Ford of Renton WA. Outright lies on the phone, 180 turns against verbal and written agreed upon terms and conditions.. basically got me in the door then said 'well, we're adding $1500 to the price, take it or leave it.' That was after a number of other outright lies leading up to. Why should that person, their boss and their company enjoy employment in this day and age? I'd love an answer to it.

Sound Ford is one of the worst dealers in the PNW. They're so anti-customer, I have no idea how they stay in business.

 

[deleriumtremor]

I had to use a dealer that I would not have otherwise gone to when I bought my Ranger, (current/ inventory shortage BS) and Im thankful that they didnt get pushy about it but they tried doing the $2500 over MSRP BS due to lack of stock, and then once negotiated past all that... at pick up they tried the whole extended warranty nonsense, but not even the Ford one, they tried selling me on some in house thing.. and then tried to hit me with $650 for "new vehicle prep and detailing" ? ? ? ? ?

Dealers are getting out of control with all this BS. Thankfully, as I mentioned, they werent pushy about it but jeeeezzz. 650 to wash the car? GTF Ouutaaa Here

It is strange, here we have two Ford dealers that are within maybe 15 miles of each other. One is like you described (actually a lot worse) and one is the opposite, no haggle, no lies, no trying to sell you stuff nobody needs, no nonsense. The really strange thing is the "old style stealership" dealer appears to sell almost as many cars and trucks as the more enlightened one.

It would appear some in the buying public just like the abuse, kind of a codependent thing.

 

[importfighter01]

It is strange, here we have two Ford dealers that are within maybe 15 miles of each other. One is like you described (actually a lot worse) and one is the opposite, no haggle, no lies, no trying to sell you stuff nobody needs, no nonsense. The really strange thing is the "old style stealership" dealer appears to sell almost as many cars and trucks as the more enlightened one.

It would appear some in the buying public just like the abuse, kind of a codependent thing.

Many just don’t buy enough cars to know a good experience from a bad one since a majority of exoerices are bad (compare bad experience to bad experience). But once you’ve had a good one, you know it and will not put up with nonsense anymore because you have been “enlightened” to what it can be like lol.

 

[Langwilliams]

The dealerships keeping some demo cars an "loaner" cars on hand could help with people that need a car right away for what ever reasons (like an accident). A fee could even be rolled into the new car purchase price if it's reasonable like you get the loaner for a month for the cost of a car payment.

There are 4 ford dealerships within 15 minutes from me so I think that keeps the abuse to customers down since they can almost walk to the next one. If you go in unprepared an not questioning any charges I can see them getting "the works" in the finance office. Unfortunate but true. I took a $399 hit for a "dealer installed plastic bed liner" that they throw in every truck at the place I sent but I got $7k off in rebates an Z plan so I didn't fight it.

I worked at a Chevy dealership for a few weeks when I first got out of the navy forever ago an they would get a Camaro SS or a ZR1 vette in an they'd charge 5 large over sticker. Low availability cars always had extra mark ups on the stickers. Now every car is limited availability.

 

[Gsxrdoug]

The more and more I read about stuff like this and everything else going on in the world the more I think I may be keeping this truck for awhile. Now mind you I usually only keep said vehicle 1-2 years, but with interest rates, mark-ups and all the other crap going on now, seems like a good time to grow up and keep a vehicle for awhile. Darn shame.

 

[AzScorpion]

The more and more I read about stuff like this and everything else going on in the world the more I think I may be keeping this truck for awhile. Now mind you I usually only keep said vehicle 1-2 years, but with interest rates, mark-ups and all the other crap going on now, seems like a good time to grow up and keep a vehicle for awhile. Darn shame.

Doug, I've never kept a truck more than 3 years and will be keeping this one longer. With the next gen Ranger coming out soon and all the crazy stuff going on it makes sense to keep it. Plus I really love this truck and so far it's been trouble free. I will get an extended warranty for added peace of mind with all the electronics on board. It'll be at least two years before I'd consider the next gen and hopefully the rollout isn't a mess like the Bronco.

 

[Gsxrdoug]

Your spot on Dave, I will also be looking for a Hybrid style Ranger in the future, but, want to make sure it has been through the paces.

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