Ford Going 100% Online with Fixed-Price Sales For EVs

[Jeff Kershner]

CEO Jim Farley says direct delivery, zero negotiation, and fully online transactions are necessary for the brand's EV business.

A few items from the article...

The Ford brand will transition to exclusively online, fixed-price, delivered-to-your-door sales for EVs.
Current Ford stores will have to radically evolve.
Tesla showed that a successful automaker could fully rely on fixed-price sales.
Ford intends to massively scale back advertising for its EVs.

The summary article is the click below:

Ford Is Going to 100% Online, Fixed-Price Sales For EVs

CEO Jim Farley says direct delivery, zero negotiation, and fully online transactions are necessary for the brand's EV business.

www.roadandtrack.com

Original behind paywall:

Ford CEO says electric vehicles will be sold 100% online with nonnegotiable price

Ford boss expects car just for Uber, Lyft and a price war benefitting consumers, among other big changes in the auto industry.

www.usatoday.com

Several OEMs have been pushing for this direct to consumer approach for awhile now. How many more OEM's will consider this in the near future and will it be successful?

Just about every point of data AND personal experience currently points to the majority of consumers NOT wanting to purchase a vehicle 100% online. Will the consumer be forced into full online vehicle purchasing in the near future?

 

[Jeff Kershner]

Brian Pash wrote an open letter to Jim Farley

An Open Letter to Jim Farley

Dear Mr. Farley, Congratulations! Your interview at the Bernstein Strategic Decisions Conference has been shared on hundreds of media outlets.

www.linkedin.com

 

[Alex Snyder]

Brian's questions definitely show the lack of transparency with the dealer network on this one. Only reading the articles and Brian's letter, I am left with the impression someone at Ford said "Let them eat cake."

 

[John H]

Even from Farley's perspective, it's an odd position to take. Considering that publicly-traded auto manufacturers recognize revenue when vehicles are shipped to the dealer (before the car is sold to the consumer), it seems like Farley is a bit too excited to relinquish his ability to juice earnings. If Ford is selling D2C, when does it book revenue? Is it booked when the customer takes delivery?

Generally speaking, this may be fine when times are good... but when times turn bad, they won't have much of a leg to stand on.

 

[john.quinn]

26 years in automotive now... I guess I'm an OG... (I wonder if this is how @DougCDavis always felt... (ahhh... the good 'ol days).

New technologies and every potential "disruption" has been used to portend the end of the Dealer Model.

Every few years we hear about the next thing that will cause the demise of the dealership as we know it; the Internet, Websites, the iPhone, E-Signatures, Carvana, Autonomous Driving, now EV's.

I really think the OEM's like to rattle the cage every now and then -- dangle whatever carrot they can to keep the dealers "in-line," so to speak.

It's a power thing. I've been around for both sides of the argument, when the "power" was leaning in different directions:

"Hey, American Honda wants us to put up new signs and a new facia on the building??!! Can you believe those guys!! ahahahahaha...."

"Hey, new vision plan from American Honda -- get cranking boys -- Mr. CFO, where's the money coming from?"

Saber-rattling. Tactics. Ford is going to want new branding, new "space," new training... and they're going to want the dealer body to pay for it -- it's the beginning of the negotiation.

 

[ChrisR]

Whenever I talk to my DSM about delivery issues, he is thankful he doesn't have to be on the front lines with the end drivers. Legacy OEMs have ZERO clue what a direct to consumer sales process will be like.

 

[Alex Snyder]

Local businesses don’t know how to communicate.

Large corporations do.

When news of Ford wanting to kill dealerships broke… that is how the general public is interpreting this… glee broke out. Customers hate car dealers.

I’ve read this glee across all social platforms and heard from all of my non-industry friends. And I have had some time to ponder why they are reacting this way.

When people go to buy cars they hit the front line salespeople, BDC agents, and Internet Managers. Some are good, but most show how little training they received. They say things like “the market is allowing us to charge $5,000 over sticker” or “we can’t quote a number without seeing your trade.” Or “oh that’s our website; things work different here in the showroom.” I have gotten those last two multiple times, myself.

The logistics of buying a car are no different if you do it with a dealer, a private party, Carvana, Vroom, or Tesla. The difference is in how they spoke to you.

Dealers, our industry isn’t under threat because of processing fees. It isn’t under threat because you’re making money. We are all under threat because your people aren’t trained to say the things people want to hear.

The public has grown accustomed to coordinated messaging from Best Buy, Amazon, Apple, etc. Local businesses like car dealerships give so much more to the community, but nobody gives a shit when your words are poison.

Ford is going to say the right things to customers. They are going to get full sticker every time. Even though you’re getting full sticker for 2 years out of 100, the damage is deep. The only fix is a common tongue. If politics has taught us anything, the narrative means more than the action.

 

[BillKVMotorCo]

Local businesses don’t know how to communicate.

Large corporations do.

When news of Ford wanting to kill dealerships broke… that is how the general public is interpreting this… glee broke out. Customers hate car dealers.

I’ve read this glee across all social platforms and heard from all of my non-industry friends. And I have had some time to ponder why they are reacting this way.

When people go to buy cars they hit the front line salespeople, BDC agents, and Internet Managers. Some are good, but most show how little training they received. They say things like “the market is allowing us to charge $5,000 over sticker” or “we can’t quote a number without seeing your trade.” Or “oh that’s our website; things work different here in the showroom.” I have gotten those last two multiple times, myself.

The logistics of buying a car are no different if you do it with a dealer, a private party, Carvana, Vroom, or Tesla. The difference is in how they spoke to you.

Dealers, our industry isn’t under threat because of processing fees. It isn’t under threat because you’re making money. We are all under threat because your people aren’t trained to say the things people want to hear.

The public has grown accustomed to coordinated messaging from Best Buy, Amazon, Apple, etc. Local businesses like car dealerships give so much more to the community, but nobody gives a shit when your words are poison.

Ford is going to say the right things to customers. They are going to get full sticker every time. Even though you’re getting full sticker for 2 years out of 100, the damage is deep. The only fix is a common tongue. If politics has taught us anything, the narrative means more than the action.

Insert standing ovation GIF here.

 

[Rick Buffkin]

Hummm... This is how I see this going!