Ford CEO Jim Farley on Bronco production & price protection [as of 2/14/22]

[XCR440]

Thank you for your insight, as always Nathan. Wow. That is higher than I thought it would be.

Had some that had 2 reservations, originally were going to cancel one, then decided to get what they could in 21/22 and trade it for what they really want in 23.

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[indio22]

Nope, I get where your coming from and can't say your wrong. I'm just trying to correct this continual chant here that Ford's after the little dealer, they should just be saying that Ford's after a few small dealers that had an overly creative plan. Yes, there are some small dealers having issues getting some scheduled, but that's true of many orders at large dealers too, and that's not just Broncos, everything's a mess, Transit vans are some of the worst and 2 years ago Ford would beg us to take Transit allocation.

I do think for many of the dealers things are going to get a little bit better, not on the allocation front, but as other dealers complete their reservations they won't be eligible to get the commodities anymore which should help other dealers. I think this is where some are in bad shape, if they have a whole order bank full of 2 door, V6, Tow package orders, that can be as bad as having too many reservations.

I have a suspicion that on the back side of this chip shortage the Ford world will be very different and this type thing won't be an issue anymore, my guess is that we'll start seeing all advertising/marketing at MSRP or above like Ford has forced with the EV's so no dealers will be able to do anything too out of whack like the reservation system allowed.

Before the shortage, I don't think it would have worked, but now consumers are learning to pay MSRP, dealers and sales consultants have learned to sell cars instead of give them away and manufacturers have learned there's more to profit than just volume. A year ago I'd have said it'll never happen, but now I can see it coming, just a matter of how hard the manufacturers police it, if they do police the policy's, it can happen.

That's interesting about the psychology of learned consumer behavior and accepting higher vehicle prices going forward. Sort of how when gasoline prices rise, people moan and gripe for a while, but then end up getting used to the higher price. Granted, people need to buy gasoline, more than a new car.

Bottom line, many thought (including myself) the dealers would burn through these people paying MSRP+, and then prices would eventually get back to the earlier norm. If I understand what you are suggesting, the MSRP could end up the new norm baseline, especially if consumers have learned to accept that.

 

[Wanted33]

That's interesting about the psychology of learned consumer behavior and accepting higher vehicle prices going forward. Sort of how when gasoline prices rise, people moan and gripe for a while, but then end up getting used to the higher price. Granted, people thesisneed to buy gasoline, more than a new car.

Bottom line, many thought (including myself) the dealers would burn through these people paying MSRP+, and then prices would eventually get back to the earlier norm. If I understand what you are suggesting, the MSRP could end up the new norm baseline, especially if consumers have learned to accept that.

One of the things that will push this theory is that so many just shop "monthly payments" when buying a car. If MSRP becomes the norm the banks, and car manufacturers will just get together, and lenghten the number of months a loan will run. We're already up to 6 years, and if my hypothesis comes to fruition people will be paying for their vehicles well after it has worn out. But then again the manufacturers, and the banks couldn't care less as long as they are getting their money. And, the customer won't realize they have payed twice the amount of the original MSRP.

 

[KABQ]

"...and to not take customer orders in excess of what the dealer knows it can fill."

The orders are there, the demand is there, deposits are in the hands of Ford and the dealer. Why does Ford think smaller dealers can't fill orders that have already been placed? Could it be because Ford itself is denying smaller dealers the allocation they need to fill their orders WHICH HAVE ALREADY BEEN PLACED?

 

[abearsfan]

I believe you would have had to convert your reservation to an order for the price protection to apply. Simply having a reservation before 3/19/21 will not suffice.

Edit: There have been numerous posts showing prior Ford memos that state reservation holders and orders are afforded price protection. So, if you reserved before 3/19/21 but ordered after that date you may still qualify for price protection.

not all could place an order despite having a reservation of 7/30/2020 i think my order didnt get placed until oct 2021!

 

[XCR440]

That's interesting about the psychology of learned consumer behavior and accepting higher vehicle prices going forward. Sort of how when gasoline prices rise, people moan and gripe for a while, but then end up getting used to the higher price. Granted, people need to buy gasoline, more than a new car.

Bottom line, many thought (including myself) the dealers would burn through these people paying MSRP+, and then prices would eventually get back to the earlier norm. If I understand what you are suggesting, the MSRP could end up the new norm baseline, especially if consumers have learned to accept that.

Look into Mach E an F150 Lighting, this is how I see Ford getting to MSRP. On the EVs, MSRP and invoice are the same, no markup, no holdback. Dealers are paid commissions for various things, including ad covenant. Right now it's just EVs, but writing is on the wall, and I think most people want fixed pricing so I can see it moving to other lines.

 

[22OBX]

Nathan, while I bow to your knowledge of the system I think Ford, and others are leaning towards the dealers happy more than they are the customers. It's true that these dealers will still make their profits, but those profits will be spread over more years. But nothing, and I can't stress this more, nothing I've seen that Ford has done in this situation has taken the end customer into consideration. I can't speak for everyone here, but being a loyal Ford customer since 1986, this is what aggravates me more than anything else. I was told I would get my Bronco before any dealer stock was available, and be driving it before that walk-in customer would. Again I understand the issues that has plagued many business over the last 2 years, but isn't making the end customer happy still one of a businesses main concern. I'm not mad at you brother, you've been handed the short end of the stick also. I just feel the fool now for being a loyal customer to Ford for so long. I've even found that my local dealer that I bought many new Fords from since 1986 will treat me like a first time walk-in when it comes to ordering a Bronco. Along with pricing that's another of the reasons I went with Granger.

This issue is the dealer is the customer. Ford is selling to the dealer, not the customer. Ford is building products that the dealer supports. From the franchise agreement The Company endeavors to make available to its dealers a variety of
quality products, responsive to broad wants and needs of the buying public,
which are attractively styled, of sound engineering design and produced on a
timely basis at competitive prices. Your the dealer’s customer who happens to be a Ford loyalist. The dealer’s obligation Because it is the dealer who deals directly with, and develops the sale of
COMPANY PRODUCTS to the consuming public, the Company substantially relies on
its dealers to provide successful sales and merchandising programs, competent
service operations and effective owner relations programs. This is the ways it’s been for decades.

 

[Wanted33]

This issue is the dealer is the customer. Ford is selling to the dealer, not the customer. Ford is building products that the dealer supports. From the franchise agreement The Company endeavors to make available to its dealers a variety of
quality products, responsive to broad wants and needs of the buying public,
which are attractively styled, of sound engineering design and produced on a
timely basis at competitive prices. Your the dealer’s customer who happens to be a Ford loyalist. The dealer’s obligation Because it is the dealer who deals directly with, and develops the sale of
COMPANY PRODUCTS to the consuming public, the Company substantially relies on
its dealers to provide successful sales and merchandising programs, competent
service operations and effective owner relations programs. This is the ways it’s been for decades.

Thus the use of the term "end" customer.

 

[22OBX]

Thus the use of the term "end" customer.

Gotcha...missed the "END" in your post! I think there definitely is room for improvement in a model that has been around for decades. I think a lot of companies the size of Ford struggle to connect with the end customer.

 

[Wanted33]

Gotcha...missed the "END" in your post! I think there definitely is room for improvement in a model that has been around for decades. I think a lot of companies the size of Ford struggle to connect with the end customer.

That's the thing that gets me Bryan. I've bought a lot of Ford's in my time here on earth. I realize we are in trying times, but Ford has never been like this in the past. I'm gonna hang in there like a loose tooth until the '23 Ranger is revealed. If it's what I seen there may be a change in my future. I'm not gonna say I'll never by another Ford as none of the other manufacturers have anything that appeals to me.

 

[22OBX]

That's the thing that gets me Bryan. I've bought a lot of Ford's in my time here on earth. I realize we are in trying times, but Ford has never been like this in the past. I'm gonna hang in there like a loose tooth until the '23 Ranger is revealed. If it's what I seen there may be a change in my future. I'm not gonna say I'll never by another Ford as none of the other manufacturers have anything that appeals to me.

Hey Jim, I agree. Hoping you get scheduled this week. I see they just released they are scheduling 4/2 all the way through 5/2. I see your down in Dixie, like me.

 

[Wanted33]

Hey Jim, I agree. Hoping you get scheduled this week. I see they just released they are scheduling 4/2 all the way through 5/2. I see your down in Dixie, like me.

Yep, good old North Carolina native here. Thanks for the "hope". But I reserved after the rush, so I'm afraid I'm looking at a '24 unless a miracle happens.

 

[22OBX]

Yep, good old North Carolina native here. Thanks for the "hope". But I reserved after the rush, so I'm afraid I'm looking at a '24 unless a miracle happens.

You never know....sometimes it's when you least expect it.

 

[phocion]

These discussions are overly weighted to focusing on Granger, SAC, and Chapman. While the customers at those dealerships are the most severely boned (and there should be something fundamentally unacceptable to Ford about punishing customers for the "sins" of their dealers), they aren't the only ones affected by allocation.

The fact remains that even average-sized MSRP dealers throughout the country have radically different ratios of reservations to allocations. Based on the reports I've been bandied around this site, I think it's reasonable to suspect there are lots of cases where a buyer can receive an equally-equipped Bronco a year earlier or later, purely based on which local MSRP non-megadiscount dealer they chose.

We had zero reason to suspect that in mid-2020 based on the language coming out of Ford.

And even for people who were wise to the 2021 allocation likely being a one-time thing, when people placed orders in January, they weren't expecting a half year of production that would be even more heavily crippled by parts shortages. So that one year of reservation-based allocations ended up being kind of a dud. Even as of mid-May Ford was telling us to expect projected build dates for all reservations by the end of that month... no mention of dealer allocation.

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