Golfer

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From Bloomberg

Ford’s CEO Sees EVs Helping Carmaker Pare Its $3 Billion Ad Budget

* Carmaker isn’t spending on Mustang Mach-E, since it’s sold-out
* Executive sees dealers shifting focus to service after sale


June 1, 2022

Ford Motor Co. Chief Executive Officer Jim Farley doesn’t see a need for traditional advertising for his company’s electric vehicles -- if they’re good enough to sell themselves.

“We spend $500 to $600 per vehicle on public advertising. Get rid of all of it,” Farley said Wednesday at the Bernstein Strategic Decisions Conference. “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.”

Ford is one of the nation’s biggest advertisers, spending $3.1 billion last year promoting its products. But Farley wants to emulate Tesla Inc., which controls the US market for EVs despite not buying traditional advertising. He said Ford hasn’t needed to advertise its new F-150 Lightning plug-in pickup and that it stopped promoting its electric Mustang Mach-E because “it’s sold out for two years.”

“I’m not convinced we need public advertising for” electric vehicles “if we do our job,” Farley said.
Farley, who is spending $50 billion on EVs through 2026, said his company’s advertising budget would be better spent to improve the customer experience for Ford’s car buyers, giving them special service and treatment at dealers throughout the life of their vehicle.

“Our model’s messed up,” Farley said. “We spend nothing post-warranty on the customer experience.”

Farley said Tesla has a cost advantage of $2,000 a car because the electric automaker has a direct sales model that doesn’t include car dealers.
But Farley isn’t looking to do away with dealers, who he contends could be a competitive advantage. He sees their role changing to focus on service after the sale. He also believes dealers will have to do 100% of sales online, with no-haggle pricing.

“Our dealers can do it, but the standards will be brutal,” Farley said. “Their business will change a lot and there will be a lot of winners and losers and, I believe, consolidation.”
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rcechinel

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“Our dealers can do it, but the standards will be brutal,” Farley said. “Their business will change a lot and there will be a lot of winners and losers and, I believe, consolidation.”
This line is powerful. Like in anything else, the proof is in the pudding.
 

COACH CHRIS

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Down for some "consolidation". But god it must be weird to be a dealership these days, having corporate essentially call you out from across the room.
 


IMDIDOC

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New York State, for example, has its Franchised Motor Vehicle Dealer Act (see, NY Vehicle and Traffic Law, Title 4, Article 17-A), which prohibits any automaker from possessing ownership in a dealership offering its vehicles. Tesla opened 5 in the NYC area, and worked out an agreement to keep them open by agreeing that any new dealerships would be franchised. Of course they had no intention of doing that. Thus we have auto dealerships that can add fees and differ in service abilities.
 

pacman7474

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Sarcastic our serious? I've seen lots of ads on various websites, etc... most were a year or two ago. Here are some.
I was actually serious, but I guess I've been living under a rock or something.
 

jlauro

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I was actually serious, but I guess I've been living under a rock or something.
or you somehow were not targeted as the demographic they were going after.
Some of the ads are fairly entertaining (especially the vs ones), you may want to watch them.
 

pacman7474

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or you somehow were not targeted as the demographic they were going after.
Some of the ads are fairly entertaining, you may want to watch them.
Yes, thank you. I went through all that you posted.
 

MellowJohnny

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New York State, for example, has its Franchised Motor Vehicle Dealer Act (see, NY Vehicle and Traffic Law, Title 4, Article 17-A), which prohibits any automaker from possessing ownership in a dealership offering its vehicles. Tesla opened 5 in the NYC area, and worked out an agreement to keep them open by agreeing that any new dealerships would be franchised. Of course they had no intention of doing that. Thus we have auto dealerships that can add fees and differ in service abilities.
The loophole will be the definition of "dealership" - if the new model is BOPIS (buy online, pickup in store) and that store merely prepares the car after shipment + provides electricians & light mechanical work as after sales service, is it still a "dealership"? Maybe after care is a separate business and operates solely as a garage.
 

P. T. Magoo

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“Our dealers can do it, but the standards will be brutal,” Farley said. “Their business will change a lot and there will be a lot of winners and losers and, I believe, consolidation.”
Not a big fan of consolidation.

To me this sounds like terrible news.

Instead of driving 7 miles to my small dealership that's always treated me well and thinks of me as that loyal customer from a few miles away, I'll be driving 40 miles to a dealership that will see the address on my intake form and think "Redneck from the styx. Let's see how much ADM we can soak him for."
 

rcechinel

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Down for some "consolidation". But god it must be weird to be a dealership these days, having corporate essentially call you out from across the room.
Yeah, I thought the same. It's antiquated, but those dealers paid a lot for their franchises, equipment, buildings, etc.
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