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

[Razorbak86]

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.

That is currently true, but dealers will not be able to do that under the new franchise agreements Ford is proposing for EV sales. That’s why Ford is asking dealers to buy in to the process voluntarily, because that’s the only way they can get the new franchise agreements that will control pricing adopted.

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[Razorbak86]

Ford dealers must set no-haggle prices, invest up to $1.2 million to keep selling EVs | Automotive News (autonews.com)

That AN article is behind a pay-wall for most members here. Can you please copy/paste the text? Thanks.

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.

The CNBC article said the next opportunity to re-up is 2027, no 2025...

Dealers who opt out of selling EVs this year will in 2027 have a second chance to opt in, Gjaja said.

If that’s true, then it’s even more important to make the right decision the first time.

 

[flip]

That AN article is behind a pay-wall for most members here. Can you please copy/paste the text? Thanks.The CNBC article said the next opportunity to re-up is 2027, no 2025. If that’s true, then it’s even more important to make the right decision the first time.

LAS VEGAS — Ford's U.S. dealers must invest as much as $1.2 million and adhere to rigorous sales standards if they want to sell electric vehicles beyond 2023 as the brand tweaks its retail model to better compete with direct-sales startups.Dealers have until Oct. 31 to opt into one of two EV certification tiers that cover varying investment levels in fast chargers and staff training. Those who choose not to invest will be limited to selling internal-combustion vehicles and hybrids from the Ford brand.EV dealers must sell the products at nonnegotiable prices, and and those who choose the lower-priced certification tier won't be allowed to carry them in inventory, instead having customers order exactly what they want for later delivery.

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Dealers who choose the highest tier — Model e Certified Elite — will be asked to invest $900,000 initially, most of which will go toward installing two DC fast chargers, at least one of which must be public-facing. They likely will have to invest $300,000 more, and add a third fast charger, by 2026. Certified Elite dealers will carry limited stock and have demo models, Ford said.
The lower tier — Model e Certified — will require a $500,000 investment that will mostly go toward installing one public-facing fast charger. Those dealers will be allowed to sell only a limited number of EVs a year, though Ford hasn't decided on that cap yet. They also will not carry inventory or have demo units available, Ford said.

The company offered the less expensive tier in response to feedback from smaller dealers who wanted a lower-cost option.
Ford said the costs for each tier could change based on potential federal or local incentives to install EV chargers. It's partnering with three consulting companies to help dealers install the equipment.
http://a.idio.co/r?a=consume&e=2694...6a4b-475d-9131-0429fe78ab02&x[idio]=907836628
Each certification will be effective from Jan. 1, 2024, until the end of 2026. Ford said dealers who opt out of becoming EV-certified for now will have another opportunity to buy in starting in 2027. It does not expect to force any dealers to do so at that time, either.
"We don't want to rush dealers into being a Model e dealer before their market or they are ready to," Ford Motor Co. CEO Jim Farley told reporters Tuesday on the sidelines of the automaker's annual national dealer meeting here.
Ford said each of its 3,000 U.S. dealers theoretically could choose to become Certified Elite. Farley declined to say how many he wants to opt in.
"We want people to take on these standards that can be profitable in executing them," he said. "It will not be good for the dealers or the company if people take on these standards and they don't get a return on their investment. We're not so excited or dogmatic that we want a certain number of people to take it that we'd look past the financial viability of it. That'd be a really bad move for us."
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$2,000 disadvantage
Ford has not previously required dealers to invest heavily to sell the trio of EVs it offers today, beginning with the Mustang Mach-E's arrival in late 2020. Its current EV certification process requires only a nominal fee for basic tooling.
The training, nonnegotiable prices and inventory restrictions are ideas that Farley has floated since announcing the plan to implement new standards in March. Dealers would still set the prices that customers would be asked to pay, executives previously have said.
Ford is positioning EVs as one of three subsets of its products that dealers can sell, along with combustion vehicles that fall under the Ford Blue division and commercial vehicles, which are sold under the umbrella of Ford Pro. Farley created Ford Pro last year and separated the company into Ford Blue and Model e in March.
Farley has said the automaker's current retail model creates a roughly $2,000 disadvantage against rivals that sell directly to consumers, including Tesla and Rivian. He said the new sales standards will wipe out much of that gap.
"We're in the red zone," Farley said, referencing the part of a football field close to the goal line, "but getting to the end zone will be a little more work."

 

[AMTRV]

That is currently true, but dealers will not be able to do that under the new franchise agreements Ford is proposing for EV sales. That’s why Ford is asking dealers to buy in to the process voluntarily, because that’s the only way they can get the new franchise agreements that will control pricing adopted.

There have been lots of programs through the years that have required dealers to "participate" in one way or another over the years, none of which had to do with pricing and I doubt the EV program can/will either. When a dealer buys a product from the manufacturer it belongs to said dealer. He may do with it what he chooses.
We shall see what the future brings.

 

[Razorbak86]

There have been lots of programs through the years that have required dealers to "participate" in one way or another over the years, none of which had to do with pricing and I doubt the EV program can/will either. When a dealer buys a product from the manufacturer it belongs to said dealer. He may do with it what he chooses.
We shall see what the future brings.

The master franchise agreement currently allows that. The new master franchise agreement for EV sales will not allow that. Regardless of what state law says, if the franchisee is not in compliance with the franchise agreement, the franchise can be terminated. Hence, Ford’s focus on getting new franchise agreements in place.

 

[GaryB2220]

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.

Manufacturer doesn't see a penny of adm. All of that shit goes to the dealer, who pays dealer invoice on those vehicles (its less than msrp)

 

[Summit981]

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.

Despite Ford CEO Jim Farley's announcement, it's not exactly a return to "business-as-usual" for the stealerships. The public comment period on the Federal Trade Commission's proposed administrative rules for all automotive dealers in the U.S. just ended on 12 September. The public overwhelmingly supported the proposed rule that will implement the following:

• Ban on Bait-and-Switch Claims
• Ban on Fraudulent Junk Fees
• Ban on Surprise Junk Fees
• Require Full Upfront Disclosure of Costs and Conditions

The North American Dealers Association (NADA) bitterly opposes this rule and petitioned the FTC to expand the comment period (delay tactic). The FTC unanimously voted "no" to that request and now the public comment period is over. The FTC will now review the public comments (several thousand) and make its implementation decision.

[Source: https://www.regulations.gov/document/FTC-2022-0046-0001]

 

[AMTRV]

Despite Ford CEO Jim Farley's announcement, it's not exactly a return to "business-as-usual" for the stealerships. The public comment period on the Federal Trade Commission's proposed administrative rules for all automotive dealers in the U.S. just ended on 12 September. The public overwhelmingly supported the proposed rule that will implement the following:

• Ban on Bait-and-Switch Claims
• Ban on Fraudulent Junk Fees
• Ban on Surprise Junk Fees
• Require Full Upfront Disclosure of Costs and Conditions

The North American Dealers Association (NADA) bitterly opposes this rule and petitioned the FTC to expand the comment period (delay tactic). The FTC unanimously voted "no" to that request and now the public comment period is over. The FTC will now review the public comments (several thousand) and make its implementation decision.

[Source: https://www.regulations.gov/document/FTC-2022-0046-0001]

None of what you've listed has anything to do with how dealers price their inventory.
The description you use, "stealership" has no more justification than calling your local furniture store the same name. You need to take a course or two in "free market enterprise".
Contrary to popular belief, owning an automobile franchise is not a license to steal. If you allow yourself to be "stolen" from, that's on you.

 

[AKMark]

Meanwhile dealers are doing this:

Mike Patton Ford 2022 Ford F-150 Lightning LARIAT LaGrange, Ga GA | Columbus, Ga Auburn, AL Roanoke, Al Georgia 1FT6W1EVXNWG01701

 

[HoosierDaddy]

Next th

Stop giving your money to people who don't respect you. At this point, it's the customers fault, not Ford's

Aww, for fucks sakes, what's next? Are you going to tell me that decades of absolute shit career politicians are the fault of the voting constituency that keeps returning them to office?
....and that term limits would not be needed if the voting public would care enough to actually stay informed and vote in an informed manner?

Bullshit, we just need term limits so we can not worry about that shit , ignore it, and keep ourselves plugged into B6G and learn every conceivable nuance about a car.

I WANT MY ANTIMATTER BLUE AND CYBER ORANGE BACK!!! IM'MA START A PETITION!!

 

[AZ_Liberty]

According to one of the articles I read today, Ford has 2991 dealers. That's exactly in line with the 3000 number we keep throwing around.

Parato Principle says that 20% of the dealers probably account for 80% of sales. The actual distribution might be a bit flatter than that, but it certainly wouldn't surprise me if 80% of all sales were from the top 100 dealerships.

I've certainly seen plenty of "Dealerships" in our mountain tows which have a half dozen cars on the lot and three repair bays, which clearly make all their money on repairs, but could order you a car if you really wanted. Meanwhile the big boys in town have 600 on the lot and sell 300 cars a month.

Only really big dealerships will take up the offer to be Electric Elite dealerships. And since the dealerships have continuously been proven to be smarter than the mother ship I can already see this happening.

Bob's Big Dealership splits his business in two. Bob's Big Blue, and Bob's Big Blue E. They use the same parking lot and buildings, but are technically two different business enterprises. That way Bob can continue his shenanigans with BS fees and Mandatory Add-ons on the ICE side.

 

[Pdshepherd]

Didn’t ex

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.

Didn’t expect much different from that dude. He wants his paycheck and they would make his life hell. Doesn’t bother them a bit how dealers treat customers. I spent plenty of time watching ford point finger at dealer and the reverse happen in same day. Customer has no one to provide real help. Sure there are a couple exceptions out there but as a whole is a shit situation

 

[flip]

We should get more details next week but what I was told about pricing is we can set and advertise the price at whatever we want but that will be the price the customer pays (not including any other products the customer does add like ESP or subscriptions, don't know if tax will be included in ad price or at the end). This is what they're calling the no haggle price and by letting dealers set the price instead of telling them what they have to sell it for, helps get around some of the state franchise issues. This is they way it should be and is good for both the consumer and helps Ford avoid some of the negative attention dealers that have been ADMing has caused.

I assume Ford will expect the elite dealers to push volume and price aggressively which makes sense. We did not send anyone to the meeting so I don't have all of the first hand details but one thing that needs a very serious discussion is Ford's plan to supply these dealers with vehicles and a order to delivery window that is reliable. If margins are going to be thin, and there's no reason to believe they won't be, the only way to get ROI is a steady supply. I'm down for whatever but this is something I really want to have a conversation about.

 

[Razorbak86]

We should get more details next week but what I was told about pricing is we can set and advertise the price at whatever we want but that will be the price the customer pays (not including any other products the customer does add like ESP or subscriptions, don't know if tax will be included in ad price or at the end). This is what they're calling the no haggle price and by letting dealers set the price instead of telling them what they have to sell it for, helps get around some of the state franchise issues. This is they way it should be and is good for both the consumer and helps Ford avoid some of the negative attention dealers that have been ADMing has caused.

I assume Ford will expect the elite dealers to push volume and price aggressively which makes sense. We did not send anyone to the meeting so I don't have all of the first hand details but one thing that needs a very serious discussion is Ford's plan to supply these dealers with vehicles and a order to delivery window that is reliable. If margins are going to be thin, and there's no reason to believe they won't be, the only way to get ROI is a steady supply. I'm down for whatever but this is something I really want to have a conversation about.

Which way are you currently leaning, based on what you’ve seen already? Pro, ICE, BEV, or some combination? Based on your more rural location, I assume ICE will have to be a component in the near term, given your local market. That required up-front investment is a big obstacle, I’m sure.

 

[flip]

Which way are you currently leaning, based on what you’ve seen already? Pro, ICE, BEV, or some combination? Based on your more rural location, I assume ICE will have to be a component in the near term, given your local market. That required up-front investment is a big obstacle, I’m sure.

Assuming it's our decision, all in. Elite, ICE and Commercial Pro.

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