Why is Dealer Allocation even a thing?

[babraunagel]

General question. Why is Dealer Allocation even a thing?
If a hundred thousand people walked in over the next month and ordered a thousand Ford vehicles Ford would build them without regard to the dealer that they were purchased at, right? So why are Bronco orders being handled differently?

Not happy with how Ford has handled this? Complete the Ford Customer Satisfaction survey, here:

https://www.bronco6g.com/forum/threads/calendar-gift-received-from-ford-please-read.29859/

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[mdfilip]

So I had a day 1 reservation and after 8 or so months of not hearing anything I called and canceled my reservation at least I thought I did. I then purchased a 2020 GT350 brand new from a different dealer than the dealer I listed for my bronco reservation. Well 4 weeks ago the dealer called and wanted to take my order for the bronco and told me the reservation was never canceled and if I still wanted one it would be a 2022 and most likely be 12 to 18 months to get it. I gave the specs and they told me it was ordered and I would be some emails when it gets scheduled. Last week the dealer I bought my GT350 from called and asked how I was enjoying the car.... I asked if they had any broncos and he said no but I can order you one... so I ordered another one and when this dealer placed the order I got a confirmation from Ford Motor Company. Now I wondering if the first dealer even put the order in or do they need to wait until they have a allocation for one?

 

[GoTigersGoBronco]

I disagree that dealerships are unnecessary. They are no different than a hardware store, grocery store or drug store, with the exception that they usually only carry the products of one manufacturer. If manufacturers only sold direct to the consumer they would only service major centres and that would leave millions of people without access to new vehicles. Tesla is an outlier because they are a boutique manufacturer who do not cater to the general public; and their customer base is in major urban centres.

Yes, as Tesla grows it has still found the need to spend billions to build giant service and demo centers in hundreds of locations. If you don’t have dealerships, you’d still have to invent something to replace the value that dealerships add.

 

[BDSteelies]

Yes, as Tesla grows it has still found the need to spend billions to build giant service and demo centers in hundreds of locations. If you don’t have dealerships, you’d still have to invent something to replace the value that dealerships add.

Yes but at least these brick and mortar locations can focus on what's actually value-added. Automakers need to have service centers easily accessible for their customers to bring their vehicle in for service, and having demo sites boosts awareness and sales.

Traditional dealerships need to make a profit to cover their operating costs and all of that inventory sitting in lots. Too often that leads to shady practices, markups, and buyers paying more than if they were to buy directly from the manufacturer.

 

[AlpineDescent]

You are correct in the whole dealers are fords customers, and yes, that is why allocation makes sense. The whole High Vehicle demand is removing the need for dealerships New auto manufacturers are going without dealers and instead going direct to consumer. As an example, Tesla has no dealers, and you are Tesla's customer if you purchase a Tesla - dealer model is gone, and my friends who have purchased this route have very little bad to say about the purchasing and service model sans dealers.

Dealers are a mix of good and bad. Most states ban the direct sale of automobiles to the public for various reasons. Tesla, for instance, can only sell to the public unrestricted in 12 states (most thru exemptions in the law), and in 8 others with limits (they also slipped one into New Mexico on tribal land). If you live in the other 30 states, you need to go out of state to buy one.

To play Devil's Advocate for a moment: Dealers do give you an advocate in dealing with the company about warranty issues. Tesla owns its service centers and gets generally poor ratings from its customers on warranty issues - it is basically you against the company. They also require better responsibility from the company about safety issues and recalls. Tesla has been accused on many occasions of covering up safety issues thru their company-owned service centers. With independent dealers, that is not possible.

TL;DR: If you really want the dealerships to end, talk with your state legislators, but they do have some positive aspects.

 

[69351windsor]

It's stupid bullshit that we have people who never reserved going in and ordering constraint filled Broncos, getting scheduled while we have folks that have waited 500+ days.

Ford is the CEO of screwing up a good thing.

Agreed. The whole debacle has shone a bright light on many dealerships where the beady-eyed cockroach sales staff scurry around rubbing their hands at the prospect of ADM mark ups like a throng of addicts fighting for a crumb of dope. The behavior is nauseating to say the least & definitely begs a change in methods or eliminating this cesspool/middleman configuration completely. AND that Ford has been sustaining this behavior --- well, speaks for itself again!!!

 

[Monster1926]

Because the dealer council, typically led by the large dealers cried to ford. This is because the smaller dealers offered under invoice pricing to drive up sales so they can take advantage of fords monthly sales incentive.

 

[Efthreeoh]

They are only alike in the fact that they serve as a middle man. Otherwise my vehicle buying experiences have no resemblance to my hardware or grocery purchases...none whatsoever fortunately lol

So from now on, for your new car purchases, you are going to buy every future car sight unseen?

 

[RenoBronco]

So from now on, for your new car purchases, you are going to buy every future car sight unseen?

Another good point

 

[Efthreeoh]

Yes but at least these brick and mortar locations can focus on what's actually value-added. Automakers need to have service centers easily accessible for their customers to bring their vehicle in for service, and having demo sites boosts awareness and sales.

Traditional dealerships need to make a profit to cover their operating costs and all of that inventory sitting in lots. Too often that leads to shady practices, markups, and buyers paying more than if they were to buy directly from the manufacturer.

And when Tesla production begins to out pace sales it will have the same issues. It works now because every Tesla sold is essentially an order.

If and once the EV marketplace gets the the take rate that ICE now has, which is still 97% of the market, i.e. the market flips to EV, the dealer sales model will work better.

 

[Efthreeoh]

Another good point

I think most of us first saw a Bronco earlier this year at a Bronco summer tour event, which was held where...?

At Ford dealership.

Just sayin'

 

[MayhemMike]

General question. Why is Dealer Allocation even a thing?
If a hundred thousand people walked in over the next month and ordered a thousand Ford vehicles Ford would build them without regard to the dealer that they were purchased at, right? So why are Bronco orders being handled differently?

Because Ford made it a thing to weasel out of failing to meet the reservation time stamp. As I pointed out when this bogus allocation scam surfaced. If I go to a Ford dealer looking for an F 150, and the dealer had 100 on the lot, and I did not find one that met my liking, I could simply place an order and Ford would build it . A dealer sets up allotments every year. They want 200 F 150’s, and Ford says ” okay, but you have to also take 50 Escapes, 100 Mustangs”. That is where the allotment game ends. It has never had any impact on a customer. In fact, once a model year production ceases, dealers are required by Ford to transfer vehicles to nearby dealers to fulfill customer wants. It is all a scam with the Bronco.

 

[Efthreeoh]

Because the dealer council, typically led by the large dealers cried to ford. This is because the smaller dealers offered under invoice pricing to drive up sales so they can take advantage of fords monthly sales incentive.

I'm at a small dealer. I reserved late Sept. 2020 and re-ordered for MY '22 in Nov. 2021. I have a VIN and Jan. 2022 build date for a 2-door BD, 1 option (auto x-fer case). My dealer is tiny compared to Grainger, SAC, or Horshiem.

 

[Monster1926]

I'm at a small dealer. I reserved late Sept. 2020 and re-ordered for MY '22 in Nov. 2021. I have a VIN and Jan. 2022 build date for a 2-door BD, 1 option (auto x-fer case). My dealer is tiny compared to Grainger, SAC, or Horshiem.

Has nothing to do with what I said, but good for you.

 

[John Auer]

I disagree that dealerships are unnecessary. They are no different than a hardware store, grocery store or drug store, with the exception that they usually only carry the products of one manufacturer. If manufacturers only sold direct to the consumer they would only service major centres and that would leave millions of people without access to new vehicles. Tesla is an outlier because they are a boutique manufacturer who do not cater to the general public; and their customer base is in major urban centres.

Most people would rather have root canal than going to a car dealership. The current business model is changing. Once “boutique” OEM’s become mainstream, the public will demand a different system.

Dealers are a mix of good and bad. Most states ban the direct sale of automobiles to the public for various reasons. Tesla, for instance, can only sell to the public unrestricted in 12 states (most thru exemptions in the law), and in 8 others with limits (they also slipped one into New Mexico on tribal land). If you live in the other 30 states, you need to go out of state to buy one.

To play Devil's Advocate for a moment: Dealers do give you an advocate in dealing with the company about warranty issues. Tesla owns its service centers and gets generally poor ratings from its customers on warranty issues - it is basically you against the company. They also require better responsibility from the company about safety issues and recalls. Tesla has been accused on many occasions of covering up safety issues thru their company-owned service centers. With independent dealers, that is not possible.

TL;DR: If you really want the dealerships to end, talk with your state legislators, but they do have some positive aspects.

There is a legitimate need for local service. Whether that is provided by a franchised dealer or company store, is open for debate. I'm not in favor of franchise laws that protect the dealers instead of the consumers.

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