Ford wants more buyers to design their cars online and wait to pick them up as the company builds them rather than have buyers stroll through lots looking for shiny new vehicles to drive home a few days later, reports from Tuesday (August 17) said.
Executives are seeking to change the buying practice to cut the costs of maintaining inventories for Ford and for its dealers. They also seek to lower the risk of producing cars that age on lots while their future selling prices decline.
The reported plan is to cut down the stock on hand at dealerships or on the way to dealerships from a 75-day supply to a 50- to 60-day supply.
Ford’s switch comes as many dealerships have far fewer cars than usual because of the computer-chip shortage that has been plaguing the entire industry.
If it pulls off the sales strategy switch, Ford will have tens of thousands fewer cars sitting at dealership than in the pre-Covid past.
For dealers, the risks of making the switch are clear.
Citing a potential downside of the shift, former General Motors top sales executive Don Johnson, who now is a consultant to auto-makers, noted that “[c]ustomers like immediate satisfaction.”
Ed Jolliffe, a Ford dealer in Michigan, asked, “What if we cut back, but Chrysler and GM load their lots? And I don’t have the cars in stock?”
“Time is death to a deal,” Jolliffe reportedly. “There’s an old adage in the car business that the longer you wait after the first customer contact, the more chance you’ll lose them.”
Dealers’ role in the sale of cars is protected by state laws governing franchises.
In May, Ford announced it was rolling out a system over the next few years that will provide automatic software updates to automobiles it manufactures.
Read More: Ford Rolls Out ‘Power-Up Software’ For Connected Cars
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More