Ford to Impose Non-Negotiable Pricing on EV Sales as Part of Model E Division Plan

[Golfer]

Via WSJ (Wall Street Journal) -- Market Talk Mentioned: F 1003 ET -

Ford said part of the corporate overhaul to create distinct divisions for EVs and gas-engine vehicles will include big changes in the way dealers sell cars. Ford envisions a new process that will result in a non-negotiable price for EVs and rely on customer orders, rather than dealer inventories, said Kumar Galhotra, Ford's president of the Americas and international markets. Ford will work out details with its dealers over the next few months, he said. Dealerships charging above the sticker price has caused tensions between Ford and its dealers in recent months. ([email protected]; @MikeColias)​

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[sborsch]

Saw this and have been paying attention to the ADM horror stories for both the MME and F150 Lightning (fortunately, my dealer doesn’t do ADM).

Ford is not just competing with other EV makers for consumer attention and sales, but also with new emerging business models for direct-to-consumer selling.

As an ‘older’ guy with a dozen or so dealership buying experiences in my lifetime, I've become adept at seeing, and walking away from, any tactics geared solely for the dealer's financial benefit. Millenials have zero tolerance for these games or negotiations, so the dealership model will be forced to change for all car makers...and change fast. Good on Ford for making this happen now vs. when forced to in a year or two.

 

[Chuck]

Two questions come to mind:

1. Does this mean that dealers of Ford (traditional) can opt out of selling Model E cars?

2. Does this mean that my Ford dealer can refuse to do repair work on Dealer E cars?

I understand that Ford would like to go the way of Tesla but I fear that we, the customers, will get caught in the crossfire in the short term.

 

[RickMachE]

Two questions come to mind:

1. Does this mean that dealers of Ford (traditional) can opt out of selling Model E cars?

2. Does this mean that my Ford dealer can refuse to do repair work on Dealer E cars?

I understand that Ford would like to go the way of Tesla but I fear that we, the customers, will get caught in the crossfire in the short term.

1) 30% of Ford dealerships in the US have already opted out, they aren't EV certified.

2) See #1. They cannot service an EV.

 

[ARK]

Two questions come to mind:

1. Does this mean that dealers of Ford (traditional) can opt out of selling Model E cars?

2. Does this mean that my Ford dealer can refuse to do repair work on Dealer E cars?

I understand that Ford would like to go the way of Tesla but I fear that we, the customers, will get caught in the crossfire in the short term.

I don't know that as a practical matter, they would want to refuse service. Servicing a vehicle is an additional revenue stream for a dealer, if they see the non-negotiable pricing as 'bad' for them, I think they will try to avoid having to sign up for that while still servicing everyone they can.

 

[Carsinmyblood]

To quote Dylan:

The times, they are a-changin'...

 

[Chuck]

To quote Dylan:

The times, they are a-changin'...

Maybe. GM did this with Saturn (non-negotiable price) and we see where that went.


Aside: While Saturn didn't negotiate, I was able to get a good price on one because my daughter played high school with the daughter of a GM VP. The sales manager told me the price I got was considerably better than what he could buy one for as an employee. The old adage "it's not what you know, but who you know" played out in this case.

 

[LeWe]

As an ‘older’ guy with a dozen or so dealership buying experiences in my lifetime, I've become adept at seeing, and walking away from, any tactics geared solely for the dealer's financial benefit. Millenials have zero tolerance for these games or negotiations, so the dealership model will be forced to change for all car makers...and change fast. Good on Ford for making this happen now vs. when forced to in a year or two.

You're absolutely right. As a millennial and reading about all of these experiences online, I only look for the most direct, honest, and best reviewed places for purchasing experience. With the internet, we're armed with pretty much all of the knowledge we need to make decisions about what price we expect and add-ons we want to buy when we walk in. If they try to upsell me it just gets frustrating. I'm also lucky that if the dealer starts playing games, I can just leave because there lots of options where I am. But, for the Mach-E it's stuck to the dealer I chose so it'll be fun to see how things unfold when it arrives.

 

[generaltso]

Maybe. GM did this with Saturn (non-negotiable price) and we see where that went.

I don't think the no-haggle pricing was the cause of their demise.

 

[COACH CHRIS]

As a millennial [...]

Millennial here too and couldn't agree more: I'm looking for the bottom line, and the final price. No games, no gimmicks. If it's bad news (too much $$), I can walk (if I can't, that's on me for putting myself in that position.) I've purchased/leased a lot of cars and have learned to cut through the crap quickly when it comes to dealerships. If they can't adapt, to hell with them; consumers deserve better.

As for servicing and where profits will come from, I trust FoMoCo to figure it out. If it means the end of slimy sales tactics, I won't complain.

 

[Chainspell]

Two questions come to mind:

1. Does this mean that dealers of Ford (traditional) can opt out of selling Model E cars?

2. Does this mean that my Ford dealer can refuse to do repair work on Dealer E cars?

I understand that Ford would like to go the way of Tesla but I fear that we, the customers, will get caught in the crossfire in the short term.

While some would surely want to opt out, why would they want to miss out on opportunities for more work? Especially knowing EV owners tend to have higher incomes and able to afford services.

 

[ChasingCoral]

I don't know that as a practical matter, they would want to refuse service. Servicing a vehicle is an additional revenue stream for a dealer, if they see the non-negotiable pricing as 'bad' for them, I think they will try to avoid having to sign up for that while still servicing everyone they can.

Service is the largest revenue stream for dealerships.

 

[lwilliams0514]

Two questions come to mind:

1. Does this mean that dealers of Ford (traditional) can opt out of selling Model E cars?

2. Does this mean that my Ford dealer can refuse to do repair work on Dealer E cars?

I understand that Ford would like to go the way of Tesla but I fear that we, the customers, will get caught in the crossfire in the short term.

I am in the car business.....

1. Yes. Ford apparently is going to also put more requirements on dealers who sell EVs. Making them install DC Fast Chargers (at their expense), implementing haggle free pricing, requiring a certain amount of EV Certified Techs, etc. For a small dealer, this will not be Feasible as they can't afford the expense.

2. It's not that they will "refuse" the work. They always want warranty work. They may not be able to do the work as they are not an EV Certified Dealer because they opted out.

Be careful what you want as a consumer. Consumers can't always have their way. I think MSRP for a Mach E (Reg or GT) is fair.... and slightly over MSRP for a GT PE is fair too as they are more rare. I think if you order one you should get MSRP on a GT PE.

I was lucky enough to use MCA to get my MME at X-Plan. Ford has announced that X-Plan will not be offered on Lightning. I think this will start to happen going forward across the entire EV division. Can't ask dealerships to accept one price, and then force them to honor discounts like X-Plan.

It is interested how this is gonna go. Ford is trying to adopt some of Tesla's model, but Ford has larger dealership service model and that is one of their advantages over Tesla.

We will see how this goes.......

 

[agoldman]

a setp in the right direction.

 

[hetgeleteken]

Saw this and have been paying attention to the ADM horror stories for both the MME and F150 Lightning (fortunately, my dealer doesn’t do ADM).

Ford is not just competing with other EV makers for consumer attention and sales, but also with new emerging business models for direct-to-consumer selling.

As an ‘older’ guy with a dozen or so dealership buying experiences in my lifetime, I've become adept at seeing, and walking away from, any tactics geared solely for the dealer's financial benefit. Millenials have zero tolerance for these games or negotiations, so the dealership model will be forced to change for all car makers...and change fast. Good on Ford for making this happen now vs. when forced to in a year or two.

Agree, dealer model is prehistoric. All you need is a true end to end digitized ‘order-to-delivery’ process plus a few physical locations for demo cars and test drives.

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