Ford has forgotten who the customers are

[Old Ranchero]

In a digital build-to-order world in which financing is something anyone can do in seconds using an online form and with online dealers like Carvana proving that direct-to-door sales models are very much viable and desirable, the real question is why you're paying so much for a middle-man in the first place?

You'd likely save 10% or more on your vehicle if you were able to just fill out an online form to order your vehicle directly from Ford and have it shipped straight to your driveway, no haggling required to avoid getting ripped off, fixed price.

Dealerships know this and have formed massive unions that have successfully lobbied lawmakers and government representatives to ensure that manufacturers can't sell direct and have pushed for what should be illegal double-taxation and other laws to discourage people from selling their vehicles private party. Only real benefit to manufacturers is that it makes it almost impossible for small startup competitors to sell their vehicles since they have to establish a dealership network, killing competition and innovation, but that again is certainly not a consumer benefit.

Fact is, that middle man costs big $$$ and isn't adding a lot of value to a customer that is just ordering and waiting for a vehicle.

direct to door sales is not desirable for EVERYBODY. Henry Ford invented the assembly line and they used a catalogue ordering system for sales (so did Sears and Roebuck, JC Pennys, others). The problem is; how do you know if you will actually like and want to keep a car if you never get to lay your hands on 1 and sit in it and drive it? We've all seen the posts on here from people saying they will just order and walk away if they don't like it or a life situation changes. At the same time people are complaining they don't like the process now and bail out or go make their 1st test drive when their order arrives- then bail out. How is Ford or any other car company supposed to accurately plan for expected sales and order well in advance all required parts to build expected numbers? What are they supposed to do with rejected arrivals?

Cal Worthington was a really interesting guy and created the modern showroom experience and sales model. This let people try out what they considered purchasing and make an educated decision that works for them before committing. They were also able to combine service (warranty important here) and financing as additional benefits that people could take or leave. It's not a perfect system by any stretch of the imagination, and yes there are some shady practices involved, but IMO (and others I'm sure) the idea of cutting out the "middleman" because younger generations are used to doing everything remotely and "easier" is foolhardy and short sighted here in the long run. Direct to home purchases also have negative aspects. Time will tell, but I think dealer showroom experience and direct to home purchasing can and should co-exist so people have the choice of selecting the method that works best for them.

Sponsored

 

[Old Ranchero]

Anyone services them, and Ford warranties them, that's the beauty of it. If you get into a car accident, you go to a repair shop and they replace bumpers, suspensions, headlights, repaint, etc. These usually aren't done at dealerships, and the bill goes to the insurance company who approves the billing for the work to be reasonable.

Ford can do the same, it doesn't have to be a dealership that sells cars in order to repair cars. In fact, generally speaking most people know better than to bring their out-of-warranty vehicles to a dealership for repairs and maintenance, because they'll be much more expensive than independent shops, and many of those independent shops are large chains too like Autocare USA.

Without the prohibitive laws in place, in the information age there's no reason that it shouldn't be more common to buy and sell used cars private party, saving everyone a ton of overhead, and those sales should be tax free because taxes have already been paid when that item was initially purchased. Double-taxation is not normal for the sale of used things, and if I sell you my refrigerator or gaming PC you aren't paying taxes on it a second, third, fourth, or fifth time. But yes, there are a multitude of independent options too like Carmax, Texas Direct, Autonation, Vroom, and numerous independent car dealerships that sell a wide variety of vehicles. You don't need manufacturer dealerships for anything.

The less middle-men are involved in any sale, the lower prices can be, all else equal. That huge dealership building, parking lot, all those emloyees, the insurance, taxes, etc all adds huge overhead costs that aren't necessary. And if you do want/need middlemen its best to use economy of scale, so no reason you couldn't buy your car through Amazon or Costco like any other commodity as they tend to be able to push through goods with less overhead.

This doesn't apply to car and vehicle sales or anything you have to register with the government to operate in public spaces. It's a beef I have long had as I am old enough to have bought and sold dozens of street vehicles and off road toys over several decades. EACH sale of a car for example the buyer pays sales tax to the city and/or state. New or used doesn't matter- sales tax paid on the sale and also new registration fees up front and annually. I have bought 10 year old cars that changed hands multiple times and sales tax is charged each time, though usually on a depreciation schedule until there is a bottoming out minimum fee in perpetuity. It's even worse here in Colorado as they reset the registration fee back to MSRP (no matter what you actually paid) if the vehicle is less than 5 years old

 

[JASmith]

The problem is; how do you know if you will actually like and want to keep a car if you never get to lay your hands on 1 and sit in it and drive it? We've all seen the posts on here from people saying they will just order and walk away if they don't like it or a life situation changes. At the same time people are complaining they don't like the process now and bail out or go make their 1st test drive when their order arrives- then bail out. How is Ford or any other car company supposed to accurately plan for expected sales and order well in advance all required parts to build expected numbers? What are they supposed to do with rejected arrivals?

Three different issues.

1) Car shows and manufacturer direct demo centers where you can also order a vehicle in-person in all major cities. After all, do you really want your vehicle to be sitting out in a parking lot under the sun and washed by some random kid at a dealership dozens of times with a bunch of random people racing your cold engine around to test it before its in your hands? We went to a Mercedes dealership a while back, and they had this kid using a high pressure water sprayer on a brand new Mercedes in the back washing the insides edges of the door, getting overspray all over the place. I'd much rather a Ford owned demo center with a little test track in the back and a indoor showcase of vehicles to look at and sit in be available, I like it and I order online or right there in the store to deliver to my house. My vehicle comes to me in pristine virginal state, unmolested.

2) Ford has to accurately plan for expected sales one way or another. Whether the vehicle sits in a Ford storage garage right next to the factory, or under the sun in a random parking lot of some dealership doesn't make a lick of difference in the overhead costs to the consumer. Actually, it would likely be cheaper and better protected at the Ford storage garage.

3) Rejected arrivals you would do the same thing as Carvana or Vroom or any of those are already doing. Shipping fees aren't refunded for non-defects, and they find another nearby buyer. For example, if you order a Maverick and don't want it, the next person in line for a vehicle of that trim that is closest to you would get it.

Ultimately, you have to consider that the consumer is ultimately paying costs one way or another, so what has lower overhead costs? The existing dealership model or direct sales "just in time" model? The world has learned with pretty much every other commodity that the latter is way cheaper.

 

[Meintc]

I never intended this to be a logistics discussion just the allocation system. That everyone would get a chance to talk about it. This has gotten way out of control. Everyone chill, have a Pepsi and be KIND.

I prefer Coke

 

[jc888888888]

direct to door sales is not desirable for EVERYBODY. Henry Ford invented the assembly line and they used a catalogue ordering system for sales (so did Sears and Roebuck, JC Pennys, others). The problem is; how do you know if you will actually like and want to keep a car if you never get to lay your hands on 1 and sit in it and drive it? We've all seen the posts on here from people saying they will just order and walk away if they don't like it or a life situation changes. At the same time people are complaining they don't like the process now and bail out or go make their 1st test drive when their order arrives- then bail out. How is Ford or any other car company supposed to accurately plan for expected sales and order well in advance all required parts to build expected numbers? What are they supposed to do with rejected arrivals?

Cal Worthington was a really interesting guy and created the modern showroom experience and sales model. This let people try out what they considered purchasing and make an educated decision that works for them before committing. They were also able to combine service (warranty important here) and financing as additional benefits that people could take or leave. It's not a perfect system by any stretch of the imagination, and yes there are some shady practices involved, but IMO (and others I'm sure) the idea of cutting out the "middleman" because younger generations are used to doing everything remotely and "easier" is foolhardy and short sighted here in the long run. Direct to home purchases also have negative aspects. Time will tell, but I think dealer showroom experience and direct to home purchasing can and should co-exist so people have the choice of selecting the method that works best for them.

You are spot on ! All these alternative sources of getting the car from manufacturer to consumer are nothing more than dealers! and honestly all these new distribution models would never survive on the margins that traditional dealers make selling a new car (pre pandemic).And when you take away the dealership franchise model WHICH INCLUDES selling cars at traditionally ridiculously LOW margins pre pandemic to slightly subsidize the profitable segments of there business . what do you wind up with? A car that cost a lot more money! Because the manufacturer is going to have to service and warranty every car for a period of time and have an infrastructure in place to do it that they currently are not paying for. IE : raise the price of the car. If you are creating a car company from scratch maybe that's possible BUT not likely. In the last 100 years 100,s of attempts at it have been tried and I will paraphrase the only person to do it successfully Elon Musk "There have been hundreds of automotive startups, both electric and combustion, but Tesla is [the] only American carmaker to reach high volume production & positive cash flow in past 100 years,” He built it from scratch and was a true innovator. He knows Ford ,VW are coming to try and take some of it away and they will Tesla is not a budget operation BTW they have DRAMATICALLY raised there prices in the last 18 months. Rivian ,Lucid IMHO will be out of business inside of 2 years the majors are going to eat there lunch. Tesla was in a once in a lifetime "right place and right time " I get the fact everyone wants to do this from their phone I have teenage girls but eliminating dealers and thinking you are going to replace them with other dealers and save 10% .I have a bridge I want to sell you! LOL! disclosure :I have nothing to do with the car biz but I am invested in shares of several manufactures and study the inner workings of car companies before I invest in them to include : GM, VW, Ford, Tesla

 

[jtpc2021]

Okay, question, I live about 10 minutes from a fairly large KCS railyard, what are the chances when mine ships it comes directly to my city and is not driven halfway across the country in a car hauler? Also, how do cars ship on trains? I've seen plenty of military vehicles shipped by train but never a civilian vehicle which leads me to believe they are inside rail cars?

Vehicles are transported in special vehicle rail cars that have cushioned drawbars. They are tall enough to stack cars and usually have holes for ventilation so you can sometimes see the shapes of the vehicles inside. (the cars are not exposed, as rail dust would damage the paint)

As far as rail yards, I can’t say what the chances are. The yard you are by could be a hump yard, switching yard, intermodal yard, etc.

The size of the yard does not mean that it is a location where vehicles would be unloaded. Unloading vehicle cars is time consuming and is only done at specific locations, then put on trucks to go to dealers.

 

[GaryHoosier]

I suggest that Ford rethink the dealer allocation system if they want to operate in a Customer Build retail world, The only ones that benefit are the large dealers and the folks that place the order via the small town Mom and Pop dealer has to wait. They need to allocate based on order date - the big dealers will still make a fortune but the smaller dealer will still have a chance to fulfill orders in a timely fashion. Whatever ever happened to first come - first served. I purchased (ordered) two new Fords this year and the Maverick ordered in July has not been assigned a delivery date. Let’s let Ford know what we think of their system. Agree or disagree that is up to you but please input your thoughts in this thread. Hopefully someone like @fordvideoguy can direct the brand manager to this thread.

'Been a loyal Ford owner, many times over, since 1972; all of them purchased under Employee Purchase Programs. So the connection with FoMoCo runs very deep.
'Ordered a 2021 Bronco (Z-Plan) in February, made a sizable deposit. No meaningful progress had been made toward production of said Bronco by late October, so rather than initiate an entirely new purchase for 2022 Bronco (as required by corporate), I opted to change to a 2022 Maverick. My hope was that I'd be in my new Ford sooner.
Now I'm afraid that I might have been snookered again. If I'm being penalized for having placed my order with a small, rural Ford Dealership, I WILL BE SUPREMELY PISSED.
My assigned Z-Plan PIN-number expires after 1-year (so, in Feb 2022).
I have already been advised, by Ford Employee Relations, to apply for a new one after the first of the year.

I can be patient, and understanding of SupplyChain issues being the cause of delays. But neither my location, nor the Dealership I chose to order from are justifiable causes of long delayed production.
As stated, I can be patient.
But don't play me for a chump.

 

[L_Ron_Hoover]

Totally agree that Ford needs to communicate with the pending order customer as if they appreciate their business. The message I've gotten from Ford's lack of communication on my order, which was placed in July and still has no build date, is total indifference.

 

[New2AZ]

Totally agree that Ford needs to communicate with the pending order customer as if they appreciate their business. The message I've gotten from Ford's lack of communication on my order, which was placed in July and still has no build date, is total indifference.

Could not agree more.

 

[JKinPA]

Frustrations understood and I am not defending Ford but sometimes it’s impossible to communicate what you don’t know. I work in distribution/supply chain. It has never been more murky and I have been doing this for awhile, quite awhile. Whether it’s brokers/transportation/warehousing there’s a ton more questions than answers. I have never experienced such a shortage in equipment and people. Every supplier is in the same situation. If most people really knew how bad it was they would be hoarding everything they could get. From grocery shelves to refrigerators there is slim pickings because of the shortages.
Just sharing what I know to be true whether its what people want hear or not. Figure how to fix the supply chain and you with be the wealthiest person in the world.

 

[GaryHoosier]

Frustrations understood and I am not defending Ford but sometimes it’s impossible to communicate what you don’t know. I work in distribution/supply chain. It has never been more murky and I have been doing this for awhile, quite awhile. Whether it’s brokers/transportation/warehousing there’s a ton more questions than answers. I have never experienced such a shortage in equipment and people. Every supplier is in the same situation. If most people really knew how bad it was they would be hoarding everything they could get. From grocery shelves to refrigerators there is slim pickings because of the shortages.
Just sharing what I know to be true whether its what people want hear or not. Figure how to fix the supply chain and you with be the wealthiest person in the world.

Insofar as the SupplyChain problem goes, my gut tells me that it is contrived.
There is only one other time I can think of when this country had such systemic shortages...during WWII.

No, somebody wants it to be this way.
To what end I can't even imagine.
But I'm sure it won't be good.

 

[JKinPA]

Insofar as the SupplyChain problem goes, my gut tells me that it is contrived.
There is only one other time I can think of when this country had such systemic shortages...during WWII.

No, somebody wants it to be this way.
To what end I can't even imagine.
But I'm sure it won't be good.

Possibly
But it’s real, regardless

 

[GaryHoosier]

It’s called logistics. They allocate and build vehicles based on parts availability as well as location of orders.

It would be a cluster to strictly go in order of first-come, first-serve in this situation.

So yes, if you are in California, Florida, or Texas (and ordered from a large dealership), you will probably get a vehicle sooner than someone in rural Missouri.

You all would be super pissed if you had to deal with some of the luxury brands that only sell specific limited models to their vip customers exclusively.
Everyone wants the red carpet treatment, but few of us truly make the list. Just let it be a humbling experience and be thankful they let you order.

Oh please.
We're not dealing with the Politburo in this process..."Be humble! And be grateful that we permit you to get on the waiting list!"
"Your Lada will be ready in 6-years.
It will be red."

 

[GaryHoosier]

Possibly
But it’s real, regardless

Oh yes, it is very real.
You're correct about that.

 

[DryHeat]

Insofar as the SupplyChain problem goes, my gut tells me that it is contrived.
There is only one other time I can think of when this country had such systemic shortages...during WWII.

No, somebody wants it to be this way.
To what end I can't even imagine.
But I'm sure it won't be good.

I'm pretty sure it's the infamous "THEY" who are doing this. You've heard of THEM, I'm sure. We all know who THEY are (although, oddly, we often disagree about it).

Anyway, it can't possibly be what it appears to be. It never is. My gut tells me that.

It's always THEM... maybe even the same THEM that caused WWII! Maybe THEY've been hiding on the dark side of the moon all this time. (I know the dark side of the moon isn't a real thing, but that's what makes it such a great place for THEM to hide.)

Sponsored