"We're betting on dealers. We're not going to go direct." - Jim Farley on EV dealers

[flip]

The thing is that Tesla IS the EV builder and is very successful at it-I know lots of people (myself included) thought they weren't going to be able to "cross the T" before going bankrupt, but seems like they've done that and rapidly expanding their production facilities to meet demand and making lots of money doing so.

Telsa is making headway in the entry level luxury price area ($40-50K range) vs BMW and Mercedes.

That is not to say they don't have their issues, but at the moment they keep gobbling up market share and Ford wants to keep or expand theirs too. Ford has a lot of legacy issues it needs to deal with and I'm betting that Ford Blue (ICE) gets winded down by 2035 because of this change over.

That and several states have mandated EV so it's pretty much going to be a captive market of millions of people. Tesla is way ahead of everybody right now but hasn't had the pressure of innovation to keep that position. Competition pushes the envelope for everyone and is generally good for the consumer in both price and quality.

I think ICE will hang around for a long time because we aren't nearly to the point EV is a viable product for every market or segment. The dealers that don't get onboard with EV now and don't get on with Commercial, IMO, are going to be screwed in the long term. Dealers have to decide on EV by the end of October so it's either you're in or have to wait until '25 and hope there's some market still left in your area.

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[Sherminiator]

That and several states have mandated EV so it's pretty much going to be a captive market of millions of people. Tesla is way ahead of everybody right now but hasn't had the pressure of innovation to keep that position. Competition pushes the envelope for everyone and is generally good for the consumer in both price and quality.

I think ICE will hang around for a long time because we aren't nearly to the point EV is a viable product for every market or segment. The dealers that don't get onboard with EV now and don't get on with Commercial, IMO, are going to be screwed in the long term. Dealers have to decide on EV by the end of October so it's either you're in or have to wait until '25 and hope there's some market still left in your area.

I trying to figure out the whole Tesla appeal with no real updates done to them for long periods of time-Your not offering anything to people who lease (not sure how many buyers do that with Teslas) but at the same time with all the new competition in the market, you'd think you would see their sales slowing down-I guess we are at the point where demand is still too high and people just want it and the pickings are slim.

Well going by the California mandates, that is 14 years or so from now...so IMO that is a long time.

Not to mention not any of the auto makers are fighting it because trends are showing it would only take 6% increase each year over that same time to get to 100%

I also don't disagree about ICE in certain products, but who knows what battery tech will be like in that same period of time-Heavy duty vehicles (which would be the hardest to convert over) might be in the realm of happening.

 

[bytheway]

He's already said the dealers need to cut $2K from the sale of an EV and dealers will need to make up revenue in other ways like accessories. Sorry, there isn't that type of margin built in to cut, savings will need to be made at the production level by controlling costs and leveraging their buying power.

IMO this is what is hurting Ford the most today on quality issues. Getting the components cheaper does not always save money in the long run. Recalls, warranty claims, lawsuits, etc.

 

[CJSimmons]

Looking at what I paid for my Bronco vs. the MSRP, I'm pretty sure the dealers are the bad guys right now. But that's just my opinion.

The Bronco is a different story, but same logic applies. If Ford wanted to they could release a 5k rebate or a 2k rebate or whatever like they used to do on F series trucks

 

[JaxGtc]

Basically selling everything you can make and still not making a profit is a bad sign. Dealers are getting theirs, at the expense of the brand.

 

[flip]

I trying to figure out the whole Tesla appeal with no real updates done to them for long periods of time-Your not offering anything to people who lease (not sure how many buyers do that with Teslas) but at the same time with all the new competition in the market, you'd think you would see their sales slowing down-I guess we are at the point where demand is still too high and people just want it and the pickings are slim.

Well going by the California mandates, that is 14 years or so from now...so IMO that is a long time.

Not to mention not any of the auto makers are fighting it because trends are showing it would only take 6% increase each year over that same time to get to 100%

I also don't disagree about ICE in certain products, but who knows what battery tech will be like in that same period of time-Heavy duty vehicles (which would be the hardest to convert over) might be in the realm of happening.

China invades, crap kicks off somewhere else or the economy tanks and all of this could come to an abrupt halt. We're building this model up with no national infrastructure or plan to generate more power, there's a high probability it implodes.

States (California) figured out they could push the automakers around with emission laws which courts then upheld so Ford and everyone else is changing their business plans based on what the government is telling them. A handful of elected officials have basically told their citizens they can only buy certain types of vehicles and lawn care equipment. This might work for most consumers but will be a huge shit show for contractors and other vocational industries. How long before people figure out how to buy a car and register in a ICE friendly state to bypass Cali's laws?

 

[GaryB2220]

what a hell of a flip flop. First it was "we are going to build all reservations before dealer stock" then "80% min name match on orders" then "we are going to take care of reservation holders" then "we are going to move away from dealerships". They are very good at making promises and breaking them.
I expect these rules about cutting prices by $2k etc etc are going to be reversed too. Cant wait to see all the marked up mandatory accessories we did not ask for get tacked on. Who wants some $700 air in their tires, $2,000 dollar dealership sticker on the bumper, and a $900 cargo organizer? /s

 

[indio22]

The Bronco is a different story, but same logic applies. If Ford wanted to they could release a 5k rebate or a 2k rebate or whatever like they used to do on F series trucks

If foolish customers are showing they will keep paying higher and higher prices, to satisfy their insatiable desire for new vehicles, then as a manufacturer you bet I'd be raising prices. Not issuing rebates.

In terms of ADMs, Bronco owners are probably some of the biggest tools of the bunch. As a manufacturer, I'd want a part of that action by raising MSRPs.

I don't see prices topping out yet, because it's kind of a norm now in the minds of many people to throw money around on loaded vehicles.

 

[John Auer]

https://www.cnbc.com/2022/09/14/for...s-dealers-as-it-chases-tesla-like-profit.html

“We’re betting on the dealers. We’re not going to go direct. But we need to specialize,” CEO Jim Farley told reporters Tuesday after briefing dealers about the plans. “The main message I have for the dealers, which I’ve never said before, because I didn’t believe it was true, is that you could be the most valuable franchise in our industry.”

Sorry, it's not looking like price gouging is going to end anytime soon.

There is some rhetoric about non-negotiable pricing, but doubt that's what we were hoping for.

The dealers dodged another bullet, for now.

 

[flip]

IMO this is what is hurting Ford the most today on quality issues. Getting the components cheaper does not always save money in the long run. Recalls, warranty claims, lawsuits, etc.

Right. They've built competitively priced vehicles in pretty much all segments and had great initial and 1 year quality ratings. All of a sudden quality has gone to hell and prices have still gone up. It's either a function of trying to save on input cost to hold more gross or picking bad suppliers. Either way, it's costing them a ton on the warranty end so any savings they may have projected using an average loss ratio has been completely wiped out.

 

[Chrome_Pony]

Alright, we’ll your post read like someone who is defending them. I own a Jeep, my wife has a Chevy. Before that I had a Dodge, Chevy, Chevy, Toyota and a Scion. My wife had a Honda before her Chevy.

Brand loyalty to the point of ignorance is the single most hilarious thing I see people do. I blame Ford plenty and will be just fine walking away after 2023 if they don’t build out 2+ year old reservation.

Corporate brand loyalty is the biggest farce... you're like a trailer park wife, beat down harder than the linoleum and conditioned to accept it. Corporations wouldn't piss on you if you were on fire.

"I'll believe corporations are people when Texas executes one."

 

[Sonny]

In terms of ADMs, Bronco owners are probably some of the biggest tools of the bunch. As a manufacturer, I'd want a part of that action by raising MSRPs.

Maybe it's just the way I was raised, but I've always believed price gouging was ethically wrong, even if you could get away with it. Your argument doesn't scale to explain the ADM on almost every decent vehicle out there today. For us, it was a matter of paying ADM for a Bronco, or paying ADM for a few other cars. The option to simply not buy a car isn't a valid argument. You can't accurately say, "just wait a year, and this will be over". There are no signs this will not get worse in the future. If this was a single-dealer problem, it would be a non-issue. This is not a "market" problem, but a systemic collusion problem among dealers who seem to be rotten to the core. Manufacturers seem to be passively encouraging this behavior, too. Blaming the consumer doesn't solve anything, it only perpetuates the greed in this industry.

 

[AMTRV]

Ford dealers do not work for Ford Motor Company. They own their franchise and nothing short of being "out of trust" would ever cause a dealer to "lose" the franchise....period
All this talk of how Ford should do this or do that to their dealers is just misinformed talk.
If a dealer wants to charge the consumer $10k over MSRP, they can.
If a dealer wants to charge the consumer $10k under MSRP, they can.
There is no more "greed" in the automobile industry than in any other industry.
There are good and bad dealers....just like any other retail business.
Most anyone that gets their pantys in a wad over how a dealer prices their cars just needs to find a different dealer as there are more good ones than bad ones.

 

[JediMcMuffin]

No one is forced to buy a ford, do people forget that? This isn't a big deal deal. If you don't like the price spend your money elsewhere

Klaben Ford in Warren and Kent advertise MSRP pricing, nothing above it. Just shop smarter. Stop giving your money to people who don't respect you. Away this point, it's the customers fault, not Ford's

you stop it with your common sense!

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