In a move that would thwart dealers’ excessive delivery charges, Ford’s global boss has announced that the US auto giant is considering switching to non-negotiable fixed-price online sales in North America. Ford Australia says it has ruled it out – for now.
Ford Australia says it is not about to introduce non-negotiable fixed-price online sales locally – even though the US car giant’s global boss said such a move was on the cards and described it as “our industry’s most exciting land grab since the Model T”, a reference to the car launched by company founder Henry Ford in 1908.
Ford global boss Jim Farley told a business conference last week that the company needed to find more profitable ways to sell cars to better compete against new rivals such as You’re here which he said had a much lower cost base.
Mr Farley said Ford – founded 100 years earlier than Tesla – was in a similar position to the Target chain of stores competing with online giant Amazon.
“I believe for retail, we have to… It’s kind of like what happened between Amazon and Target,” Mr. Farley said.
“The target could have walked away, but they didn’t. They’ve bolted onto an e-commerce platform and then they use their physical store to add groceries and make (returning goods) much easier than Amazon.
“They’re using their expertise as a brick-and-mortar retailer to their advantage, but they’re modernizing the e-commerce part, so it would be very easy to do business with them.
“That’s exactly what we (Ford) need to do on the retail side. We need to move to non-negotiated pricing, we need to move to 100% online.
“The vehicle – there is no inventory (from the dealer) – goes direct to the customer, 100% remote pickup and delivery. We have this opportunity to use our physical presence to outperform (rivals such as You’re here).
Mr Farley’s comments came as the auto industry sees unprecedented demand for electric vehicles.
Because Ford can’t build its electric cars fast enough, Farley said in the current climate the company doesn’t need to announce them.
“If you ever see Ford Motor Company doing a Super Bowl commercial on our electric vehicle, sell the stock,” Mr. Farley told the conference, the Reuters reports the news agency.
After Mr. Farley’s comments (pictured above), Ford USA spokesman Said Deep attempted to walk back Mr. Farley’s speech, telling the media: ‘Our dealerships are a competitive advantage for us because they are closely connected to their customers and the communities they serve.
“That’s why we rely on them and work with them to dramatically improve our overall customer experience for (electric vehicles).
“We want them to be even more specialized in the future, and we plan to develop a new set of operating standards for Ford (electric vehicle) sales that would combine the ease and most popular aspects of start-ups. -ups of direct sales, with the expertise that our dealers have developed over more than a century.
“Ford and our dealerships want to provide the best possible experience for our customers. The digital retail experience is essential. »
Mr Deep also told US media that the non-negotiable fixed-price online sales model “is just one of the ways we plan to reduce the amount of inventory a dealer must hold, thereby reducing costs. for Ford and our dealers”.
Earlier this year, Ford warned its US dealer network that it risked losing some of its vehicle allowances if it raised recommended retail prices and dealer delivery charges on in-demand models such as the Ford. Mustang Mach-E and Ford F-150 Lightning electric cars.
In Australia, Ford is powerless to prevent dealers from charging excessive delivery charges, which range from $3,000 to $6,000 in some showrooms on some variants of the new Ford Ranger – although most dealers quote between $1,200 and $2,200.
When asked if Ford Australia intends to introduce non-negotiable fixed price online sales on future in-demand models such as the Ford F-150 or Ford Ranger Raptor, a company statement to Conduct said: “Ford Australia has no plans to move to an online or fixed price sales model.
“We view our dealerships as essential to the success of the Ford brand and an important touchpoint for customers to experience our brand.
“As part of our commitment to improving the customer experience, we have recently launched a new vehicle configurator on ford.com.au and online reservations will soon be available for select nameplates.
“However, our dealer network firmly remains the public face of our brand and an important part of our connection to our customer base and community.”
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