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Ford Dealerships Grapple With Online Challenges to Traditional Sales

Ford Dealerships Grapple With Online Challenges to Traditional Sales

As their EV line expands, Ford Motor Co. executives are building new rules for EV sales that appear to shift emphasis to online sales as opposed to on-site dealership sales. This obviously has their dealers nervous.

The rules will be officially released in September, but as the Wall Street Journal reports, they will likely create a model where dealerships have reduced inventory that serve more as centers for repairs and service, no-haggle pricing, and increased online transactions.

In a June investor meeting earlier in Ford CEO Jim Farley has also mentioned the idea of having sales be 100% online with no inventory at dealerships at all–similar to the way Tesla runs things, which saves them about $2,000 per car. Later that month Farley met with around 300 dealers as well as the president and head of sales from Ford’s gas-engine division in a group meeting where he fielded questions about that future sales model and reassured dealers about their overall importance to the company.

The WSJ article quotes several Ford dealers who understand the market pressures that Ford faces in both a changed post-Covid economy where buyers intuitively prefer online shopping, as well as a changing automobile industry as EVs rise in esteem. But these dealers also point out that dealerships play a vital role in sales when demand is low (as it currently is). “When things are bad, they rely on us to make them decent. When things are great, then it’s easy to say ‘we don’t need them,’” said one.

Pricing has been a point of tension this year between Ford and its dealerships, as well as the elevated standards that dealerships must meet in order to sell EVs–more training for workers, as well as installing chargers and other equipment for servicing.

There’s certainly a lot of factors at play, and Ford–along with other automakers breaching the EV space–has a tricky path to tread to keep customers and dealers happy.

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