In a move that would thwart excessive dealer delivery fees, the global boss of Ford has announced the US car giant is considering a switch 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 global boss of the US auto giant said such a move was on the cards and described it as “the most exciting land grab in our industry since the Model T,” a reference to the car launched by company founder Henry Ford in 1908.
The global boss of Ford, Jim Farley, last week told a business conference the company had to find more cost-efficient ways to sell cars to better compete with new rivals such as Tesla 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 shopping chain competing with online giant Amazon.
“I believe for retail, we have to … It’s kind of like what happened between Amazon and Target,” said Mr Farley.
“Target could have gone away, but they didn’t. They bolted on an e-commerce platform and then they use their physical store to add groceries, and make (the return of goods) much easier than Amazon.
“They use their expertise as a physical retailer to their advantage, but they modernise the e-commerce piece, so it would be really easy to do business with them.
“It’s exactly what we (Ford) have to do on the retail side. We got to go to non-negotiated price, we got to go to 100 per cent online.
“The vehicle – there’s no (dealer) inventory – goes directly to the customer, 100 per cent remote pickup and delivery. We have this opportunity to use our physical presence to outperform (rivals such as Tesla).”
The comments from Mr Farley came as the car industry is experiencing unprecedented demand for electric vehicles.
Because Ford cannot build its electric cars fast enough, Mr Farley said in the current climate the company does not need to advertise them.
“If you ever see Ford Motor Company doing a Super Bowl ad on our electric vehicle, sell the stock,” Mr Farley told the conference, the Reuters news agency reported.
After the comments were made by Mr Farley (pictured above), the spokesperson for Ford USA, Said Deep, attempted to back-track from Mr Farley’s speech, telling media: “Our dealers are a competitive advantage for us as they are closely connected with their customers and communities they serve.
“This is the reason we are leaning into them and working with them to dramatically improve our overall customer experience for (electric vehicles).
“We want them to be even more specialised in the future, and we plan to craft a new set of operating standards for Ford (electric vehicle) sales that would combine the ease and most popular aspects of direct-sale start-ups, with the expertise our dealers have developed over more than a century.
“Ford and our dealers want to deliver the best experience we can for our customers. The digital retailing experience is critical.”
Mr Deep also told US media the non-negotiable fixed-price online sales model “is just one way we are looking at reducing the amount of stock a dealer needs to hold, reducing costs for both Ford and our dealers.”
Earlier this year, Ford had warned its US dealer network they face the risk of losing some of their vehicle allocations if they mark up recommended retail prices and dealer delivery fees on in-demand models such as the Ford Mustang Mach-E and Ford F-150 Lightning electric cars.
In Australia, Ford is powerless to stop dealers from charging excessive dealer-delivery fees, which have ranged from $3000 to $6000 from some showrooms on some variants of the new Ford Ranger – though most dealers are quoting between $1200 and $2200.
When asked if Ford Australia had any plans to introduce non-negotiable fixed price online sales on in-demand future models such as the Ford F-150 or Ford Ranger Raptor, a statement from the company to Drive said: “Ford Australia has no plans to move to an online or fixed-price sales model.
“We see our dealers as vital to the success of the Ford brand, and an important touchpoint for customers to experience our brand.
“As part of our commitment to improve customer experience, we recently launched a new vehicle configurator on ford.com.au and online reservations will soon be available for certain 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 the community.”
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