Ford Commercials all touting custom orders

[pxpaulx]

I suspect the move is because keeping 100eds of vehicles on the lot is EXPENSIVE. Beside the insurance dealers pay on all those vehicles and the literally millions of dollars they have tied up in capital and the taxes they have to pay on inventory... lot of reasons to go to an order based system.

I don't know if any of those expenses are shared with Ford directly, but I suspect some are. So Ford is all to happy to only ship what they can make. Maybe it will change when Ford is able to keep up with orders?

I don't believe Ford shoulders any of those costs directly, however if a dealer isn't moving product, they wouldn't be able to take on new inventory. This is what forces Ford and any other manufacturers to entice buyers with periodic incentives in order to move older/lot inventory.

It makes a ton of sense to try to shrink the need for on-lot inventory. Dealer expenses are lowered, which they in theory should then be able to continue with similar profitability while offering competitive pricing. Ford similarly doesn't have to pass incentives because they can offer their vehicles with a more competitive MSRP (I happen to believe the Maverick is their first vehicle priced with this particular idea as a principle driver of the MSRP being set where it was).

So it definitely indirectly affects them...at least in a normal non-pandemic environment. That they are taking the pandemic climate as a precursor to making this change I believe is a smart move on their part.

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[Old Ranchero]

So you find another dealer. Easy peasy.

I used to think like that too when I lived in San Diego- lots of dealers to choose from. Here in SW Colorado, I have exactly 1 dealer- and just a few miles away. Next Closest is 50 miles away (only 1 in that town too). Then you get to drive over an hour to find 1 in New Mexico or Utah.

Fortunately I am not trying to use X plan so not an issue for me. Just put that out there as a PSA for anyone not aware of that. My 1 and only local dealer has been good to me so far, and Ford sent me a special Customer Loyalty Discount offer for $750.00 discount if I order by Jan 3, 2022. They only charge MSRP for vehicles with a fairly reasonable flat $299.00 for delivery & handling misc. No other fees or options I don't want, etc.

 

[Old Ranchero]

I don't believe Ford shoulders any of those costs directly, however if a dealer isn't moving product, they wouldn't be able to take on new inventory. This is what forces Ford and any other manufacturers to entice buyers with periodic incentives in order to move older/lot inventory.

It makes a ton of sense to try to shrink the need for on-lot inventory. Dealer expenses are lowered, which they in theory should then be able to continue with similar profitability while offering competitive pricing. Ford similarly doesn't have to pass incentives because they can offer their vehicles with a more competitive MSRP (I happen to believe the Maverick is their first vehicle priced with this particular idea as a principle driver of the MSRP being set where it was).

So it definitely indirectly affects them...at least in a normal non-pandemic environment. That they are taking the pandemic climate as a precursor to making this change I believe is a smart move on their part.

not sure if this is still the norm, but Manufacturers used to charge their dealers a monthly "flooring fee" just for the privilege of having cars on their lots to sell. Also, not all incentives on vehicles come directly from Ford: some do, but then there are regional programs and also the dealers themselves can offer discounts of their own to move units.

 

[pxpaulx]

not sure if this is still the norm, but Manufacturers used to charge their dealers a monthly "flooring fee" just for the privilege of having cars on their lots to sell. Also, not all incentives on vehicles come directly from Ford: some do, but then there are regional programs and also the dealers themselves can offer discounts of their own to move units.

I work for a large bank, and know that dealer floor plans are definitely still a thing. I suspect the size of the dealer might come in to play, perhaps Ford offers that sort of product for smaller dealers where larger market multi-brand companies might utilize a financial institution to run their floor plan program.

 

[JASmith]

That is what I suspected. And you know what? I don't mind. A big reason people worry about the price that they are paying is the worry that they are paying more than someone else. The old "I was happy I found $5 until my friend found $10". I think it would benefit Ford, the dealers and the customers. Take the agony out of dealing with car buying.

Yeah, but if you looked at placed like edmunds TMV, you could see what the average paid in your area was, and for Fords it was always waaaay below invoice for the average buyer so EVERYONE was getting cheap prices.

I prefer no haggle pricing, if the pricing is just that low haggled price in the first place.

Instead we are moving to a type of North Korean communist system, where everyone is equal, but sadly all equally bad off, lo! No one has to feel bad about the next guy getting a better deal, because no one is getting a good deal.

I welcome a custom ordering system, but I don't welcome this persistent low production inventory shortage that doesn't come close to meeting demand so that prices are inflated across the board. We have advanced to the "Amazon Prime" lifestyle where you can order something and expect it sometimes even the same day, so waiting 6 months, and paying out the nose for the privilege, is not an acceptable business model from a customer satisfaction standpoint.

Ford also needs to host far more events where you can come out and test drive their vehicles if people are going to order their car sight unseen, but again they can't do that if production isn't ramped up to meet demand.

Heck, the fact that 1-year old cars are now selling for the same as brand new cars shows the system is broken.

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