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Jesse Ransom
Jesse Ransom UltimaDork
6/2/22 1:52 p.m.

Omitting links since I read it at another car mag and they in turned linked USA Today behind a paywall, but I'm sure we'll hear more soon.

Wondering how soon this'll happen, and whether it's the first step toward doing all car sales this way, not just EVs.

SpeedwayFan
SpeedwayFan New Reader
6/2/22 1:55 p.m.

In reply to Jesse Ransom :

Well Ford apparently has broken or will break off into 2 divisions Ford Model E (which will sell the EVs) and Ford Blue (which will sell the gas cars) so I'm thinking the D to C might just be a Model E thing. But hey! Who knows?

iansane
iansane Dork
6/2/22 2:09 p.m.

I'm okay with this. I've contacted 4 dealers in my area trying to even more info on ordering a slew of vans and trucks for my company and gotten crickets in return.

pointofdeparture
pointofdeparture UltimaDork
6/2/22 2:13 p.m.

There are a lot of things I dislike about Tesla but their DTC-only model is a huge win for consumers. Would like to see all automakers follow suit.

There's deep irony in the fact that the dealer model was originally intended to be pro-consumer but has been deeply twisted over the years to create an even worse way to screw buyers. As with others here, my dealer experiences have been almost universally negative, and have led to me not buying vehicles I was ready to buy immediately if the dealer/salespeople weren't so uncooperative.

Side note: in the Chevy Bolt discount thread it was mentioned that very few GM dealerships are opting into being "EV dealerships", which is obviously a bad thing for the customer experience if GM is betting big on EVs. I wonder if Ford is trying to get ahead of being in that kind of situation.

fidelity101
fidelity101 UberDork
6/2/22 2:22 p.m.
SpeedwayFan said:

In reply to Jesse Ransom :

Well Ford apparently has broken or will break off into 2 divisions Ford Model E (which will sell the EVs) and Ford Blue (which will sell the gas cars) so I'm thinking the D to C might just be a Model E thing. But hey! Who knows?

seems to be a way around the dealership loophole/laws is my guess. 

pointofdeparture said:

There are a lot of things I dislike about Tesla but their DTC-only model is a huge win for consumers. Would like to see all automakers follow suit.

 

as long as everything doesn't move to a software model of subscription to use the product you "own" that stuff drives me nuts. Video game industry went to micro transactions, software industry just licenses it to you and can do whatever they want (even uninstall the software), eventually only the very rich will own things? If I can't own a car whats next? 

 

Keith Tanner
Keith Tanner MegaDork
6/2/22 2:27 p.m.

The DTC Tesla experience was so much better than anything I've dealt with in a dealership, and I've never had a truly bad experience with a dealership sales department. Fixed price meant I didn't have to do a bunch of research and go head to head with a professional negotiator just to get a fair price. That was true with my last dealership experience as well, I had an unbeatable fleet price but I still had to deal with the upsell dance for things like bedliner.

With DTC, I had a car on order that was going to be delivered to my house, but it had a deadline to meet requirements for a promotion. It wasn't looking promising, there were no cars that matched my order in Denver with only a week left. But I spotted one in Salt Lake's online inventory. One quick phone call and I'd switched my truck delivery to in-person pickup in a different state on 24 hours notice. You'll never pull that off with the fragmented dealer network.

It'll be interesting to see if Ford can pull off fixed price with their entrenched dealers. GM tried with Saturn. I honestly don't know how successful it was, but since we don't have fixed-price Chevys I'm going to guess it wasn't 100% effective. DTC has been an ongoing battle for Tesla with various state regulations, and they don't have existing dealers howling at them.

Keith Tanner
Keith Tanner MegaDork
6/2/22 2:45 p.m.

Some quotes from Ford CEO Jim Farley in the Ars Technica article:

...the company says that its current distribution model adds around $2,000 in extra costs per car compared to Tesla. A third of that cost is tied up in inventory, and another third is spent on advertising.

"Our model is messed up. We spend $600 or $700 on the vehicle to promote it, and we spend nothing post-warranty on the customer experience. The problem is, on a parts business, which historically has been very profitable, we only get, maybe, only 10 or 20 percent of the customers come back to us," he said.

He also doesn't see the point in advertising a car that's already sold out. "If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock," he said.

wae
wae PowerDork
6/2/22 3:21 p.m.
Keith Tanner said:

It'll be interesting to see if Ford can pull off fixed price with their entrenched dealers. GM tried with Saturn. I honestly don't know how successful it was, but since we don't have fixed-price Chevys I'm going to guess it wasn't 100% effective. DTC has been an ongoing battle for Tesla with various state regulations, and they don't have existing dealers howling at them.

Anecdotally, everybody I talked to who bought a new Saturn (myself included) liked the idea of the no-haggle pricing.  But one of the biggest advantages they had was the smaller number of dealers compared to Chevy.  In my metro area, there are 12 Chevy dealers spread across the tri-state area that I'd consider the same market.  When Saturn was around, there were 3 that were on very opposite sides of town - one pretty far north, one way out to the east,  and one pretty far south.  When you've all got the exact same product the only easy way to win deals is geography or pricing games.  The Saturn dealers didn't really compete that much with each other since they were fairly well distributed among the population spread at the time. 

I could see a no-haggle pricing policy becoming a big pain point for populated areas that have several existing dealers.  If you can build and order your car on-line and then go pay for it at the dealer of your choice the dealer that happens to be closest to the demographic most likely to buy a Chevy is going to kill it while the ones farther out are going to have to get creative - and spend more of their revenue - to incentivize customers to buy from them.

Not that I have a whole lot of love for the great American car dealership.  I do think that will probably shift the revenue focus even more towards service for the dealer network.  Which could be a bad thing for consumers if that creates an incentive for the manufacturers to continue to make it harder and more expensive for third parties to diagnose and service their vehicles.  If I'm a dealer and you've taken away my ability to compete on pricing games, I'm going to be quite happy to find out that independent shops either can't get or have to pay a lot of money to get the equipment needed to diagnose and repair.  After all, the number one reason people go to an indy shop instead of the dealer is because it's usually significantly cheaper.  But if the manufacturer can increase the cost to service their vehicles, that price difference becomes much less significant.

codrus (Forum Supporter)
codrus (Forum Supporter) PowerDork
6/2/22 3:24 p.m.

They can do this now because they've got a huge backlog of orders.  I'm sort of doubtful that this will continue to be the case 5-10 years from now when every pickup out there is available in EV form -- if the Chevy dealer has a EV Silverado in stock, are people really going to want to wait a week or two to order an F-150?

Also, while the Tesla model sounds good on paper (I have no direct experience with it), the reports I hear from a dozen+ friends who've used it locally is that the actual implementation is terrible.  No visibility into when the car will show up for months, then they call you one morning and say you have to be there at noon to get it and if you can't then it goes to someone else.  Cars delivered in poor condition, missing parts, etc.

I have used one or another form of "no haggle" pricing for every new car I've bought since Y2K (Ford X-plan, Mazda S-plan, Costco vehicle purchase program, etc).  Yes, you have to spend 5 minutes saying "no thank you" to the guy in the finance room, but that's hardly a big deal to me.

 

Keith Tanner
Keith Tanner MegaDork
6/2/22 3:35 p.m.

In reply to codrus (Forum Supporter) :

Sounds like the experience your friends have had with the Tesla implementation have all been with the trucking aspect. Pick it up at a Tesla showroom and you sidestep them. In my case, they even offered to re-wash a pretty clean car before I road-tripped it 300 miles home through the mountains and I had the ability to do a full walkaround.

Truckers are a pain in the butt in every industry.

Ford will undoubtly deliver these vehicles at existing dealerships so that won't be an issue.

frenchyd
frenchyd MegaDork
6/2/22 3:41 p.m.

In reply to codrus (Forum Supporter) :

I like the idea of leaving the ICE guys dealing with a dealer the way they have always done.  ( there are actually some guys that like that dance). 
 Then us old farts can order EV's   on line  and have the experiance we prefer.  
     I actually like ordering on line.  Amazon is my new Sears. Without the drive to the mall and all the time that entails.  

Keith Tanner
Keith Tanner MegaDork
6/2/22 3:50 p.m.
wae said:
Keith Tanner said:

It'll be interesting to see if Ford can pull off fixed price with their entrenched dealers. GM tried with Saturn. I honestly don't know how successful it was, but since we don't have fixed-price Chevys I'm going to guess it wasn't 100% effective. DTC has been an ongoing battle for Tesla with various state regulations, and they don't have existing dealers howling at them.

Anecdotally, everybody I talked to who bought a new Saturn (myself included) liked the idea of the no-haggle pricing.  But one of the biggest advantages they had was the smaller number of dealers compared to Chevy.  In my metro area, there are 12 Chevy dealers spread across the tri-state area that I'd consider the same market.  When Saturn was around, there were 3 that were on very opposite sides of town - one pretty far north, one way out to the east,  and one pretty far south.  When you've all got the exact same product the only easy way to win deals is geography or pricing games.  The Saturn dealers didn't really compete that much with each other since they were fairly well distributed among the population spread at the time. 

I could see a no-haggle pricing policy becoming a big pain point for populated areas that have several existing dealers.  If you can build and order your car on-line and then go pay for it at the dealer of your choice the dealer that happens to be closest to the demographic most likely to buy a Chevy is going to kill it while the ones farther out are going to have to get creative - and spend more of their revenue - to incentivize customers to buy from them.

Not that I have a whole lot of love for the great American car dealership.  I do think that will probably shift the revenue focus even more towards service for the dealer network.  Which could be a bad thing for consumers if that creates an incentive for the manufacturers to continue to make it harder and more expensive for third parties to diagnose and service their vehicles.  If I'm a dealer and you've taken away my ability to compete on pricing games, I'm going to be quite happy to find out that independent shops either can't get or have to pay a lot of money to get the equipment needed to diagnose and repair.  After all, the number one reason people go to an indy shop instead of the dealer is because it's usually significantly cheaper.  But if the manufacturer can increase the cost to service their vehicles, that price difference becomes much less significant.

I'd be just fine if dealers had to compete on customer service instead of trying to be $5 cheaper than the guys down the street or playing games.

I worked at a Ford dealership as a used car lot monkey for a summer. I would not have gone there to buy a new car after seeing the attitude of the salesmen.

Third party service is going to get more difficult no matter what as vehicles get more complex. OBD-II helps a lot, but to get the full data set you need the tools that go beyond what's in OBD-II. Sometimes that's inexpensive - a cheap PC OBD-II cord and a copy of ForScan is very effective - sometimes not. Even with right to repair legislation, I think that's going to be a big barrier to independents. Look at what NickD has been talking about in the Bolt thread.

maschinenbau
maschinenbau UberDork
6/2/22 3:50 p.m.

I believe dealerships still exist for reasons similar to why Ticketmaster is still around. They are a convenient scapegoat to absorb all negative feelings from the customer. Ticketmaster isn't some evil mega corp that scalps profits from artists and venue - the majority of their dreaded "fees" go straight to the artists and venues as a clever way for them to raise ticket prices, because now you are mad at Ticketmaster instead of the artists and venues. Dealerships have to deal with all the messy drama related to maintenance, service, recalls, and warranty work. In return, they get to add ADM and a chance to screw you with financing. But if EV's require less service and are more reliable, the benefit of the dealership model to the manufacturer is less.

ShinnyGroove (Forum Supporter)
ShinnyGroove (Forum Supporter) HalfDork
6/2/22 3:55 p.m.

For an industry that invented Kaizen (lean manufacturing), they sure haven't gotten the hang of just-in-time delivery.  Seems like with the vastly reduced parts count and assembly time on EV vehicles, you should be able to order one exactly the way you want it from an a la carte menu on a web site and have it show up in your driveway a few weeks later. Talk about a great consumer experience. The stupid nonsense with having to buy option packages to get the stuff you want is ripe for the picking. I shouldn't have to pay an extra $6k and tolerate leather seats that I hate to get something totally practical like laser cruise control. I think like the marketing guy that I am, but sooner or later someone will decide to make only one or two really great electric vehicles and absolutely perfect the consumer experience. 

tremm
tremm Reader
6/2/22 4:03 p.m.

I was thinking the other day that I haven't recently seen many Mustang Mach E's or whatever the electric SUV crossover is called.

Can someone explain what the quote means, "The problem is, on a parts business, which historically has been very profitable, we only get, maybe, only 10 or 20 percent of the customers come back to us,"

And what would the reasoning be behind splitting the brand into something electric-only? I'm imagining a GMC-type split (heavy-trucks or business/commercial servicing). I guess I can imagine in the future, 10 years from now(?), consumers will be buying only electric/hybrid vehicles, or >75%. It seems kind of stupid from my consumer perspective; Ford Model E and Ford Blue sound vague, I'd rather hear "Ford", and "Ford Industries" or something.

John Welsh
John Welsh Mod Squad
6/2/22 4:17 p.m.

Let the lawsuits fly.  The Dealers Assoc will fight this one hard.  This isn't some start-up...it's Ford.  This will be the battle of all battles on this front.  

pointofdeparture
pointofdeparture UltimaDork
6/2/22 4:18 p.m.
tremm said:

Can someone explain what the quote means, "The problem is, on a parts business, which historically has been very profitable, we only get, maybe, only 10 or 20 percent of the customers come back to us,"

They make a lot of money selling parts, but do a bad job of selling consumers on the idea of going back to the dealer for OEM parts after the warranty period. 10-20% of owners keep going to the dealer for parts or service after the warranty is up.

And what would the reasoning be behind splitting the brand into something electric-only? I'm imagining a GMC-type split (heavy-trucks or business/commercial servicing). I guess I can imagine in the future, 10 years from now(?), consumers will be buying only electric/hybrid vehicles, or >75%. It seems kind of stupid from my consumer perspective; Ford Model E and Ford Blue sound vague, I'd rather hear "Ford", and "Ford Industries" or something.

Lots of enlightening info in this thread about how many GM dealers want absolutely nothing to do with EVs and will basically refuse to be involved with them as long as possible, which creates an awful customer experience for someone with a Bolt who just wants to get it serviced at a convenient dealer only to find out that most Chevy dealers won't touch it.

https://grassrootsmotorsports.com/forum/off-topic-discussion/chevy-bolt-prices-slashed/195472/page1/

I presume Ford is trying to avoid that kind of abysmal customer experience by branding the EV centers to make it obvious where you can and can't go.

codrus (Forum Supporter)
codrus (Forum Supporter) PowerDork
6/2/22 4:26 p.m.
Keith Tanner said:

Sounds like the experience your friends have had with the Tesla implementation have all been with the trucking aspect. Pick it up at a Tesla showroom and you sidestep them. In my case, they even offered to re-wash a pretty clean car before I road-tripped it 300 miles home through the mountains and I had the ability to do a full walkaround.

No, this was all at local Tesla dealerships in the bay area.

alfadriver
alfadriver MegaDork
6/2/22 4:27 p.m.
SpeedwayFan said:

In reply to Jesse Ransom :

Well Ford apparently has broken or will break off into 2 divisions Ford Model E (which will sell the EVs) and Ford Blue (which will sell the gas cars) so I'm thinking the D to C might just be a Model E thing. But hey! Who knows?

That "split" happened a few months ago. My group was moved into Model E, even though we only did ICE work, lol. 

Brett_Murphy (Agent of Chaos)
Brett_Murphy (Agent of Chaos) MegaDork
6/2/22 4:28 p.m.
codrus (Forum Supporter) said:

If the Chevy dealer has a EV Silverado in stock, are people really going to want to wait a week or two to order an F-150?


There are people what would set the Chevy on fire if they could, and wait a few months for a Ford- and vice versa. Tribalism is a hell of a thing. 

alfadriver
alfadriver MegaDork
6/2/22 4:29 p.m.

WRT parts, there may be a good profit margin, but the actual value sucks compared to selling cars. That path was tried under jac the knife. 

Keith Tanner
Keith Tanner MegaDork
6/2/22 5:22 p.m.
codrus (Forum Supporter) said:
Keith Tanner said:

Sounds like the experience your friends have had with the Tesla implementation have all been with the trucking aspect. Pick it up at a Tesla showroom and you sidestep them. In my case, they even offered to re-wash a pretty clean car before I road-tripped it 300 miles home through the mountains and I had the ability to do a full walkaround.

No, this was all at local Tesla dealerships in the bay area.

Then I guess the difference is in the manager of the showroom, because you're sure not describing my experience.

yupididit
yupididit PowerDork
6/2/22 6:07 p.m.

They need to do this for the F series line too. Every dealership I have inquired with are asking crazy amounts of $ over MSRP. Minus one in Fayetteville who sells at MSRP but they don't get a lot of new vehicles on the lot. 

And the parts prices are crazy. I was looking to get some spark plugs for my Expedition. The dealer wanted over $100 for 6. Bought them on Amazon for way cheaper, the parts dept rep text me the Amazon link for them. 

NorseDave
NorseDave HalfDork
6/2/22 6:40 p.m.

Literally just saw a vid on YT about this.  Apparently the DTC thing is a loophole for EV's, which is why Tesla, Rivian, etc. can do that.  In general it's written into law that car makers can't sell DTC.  But I guess the law either explicitly states ICE, or explicitly excludes electric vehicles. 

Anyway, said video - made by a guy that is a dealer - thought trad dealerships would be mostly extinct by about 2025.  One of his points was that car dealers in 2021 showed a record profit despite moving only 50% of the cars they usually sell.  All due to dealer markups.  None of which flowed back to the manufacturers.  

mazdeuce - Seth
mazdeuce - Seth Mod Squad
6/2/22 7:11 p.m.

In reply to pointofdeparture :

Sold my Volt purely because of the dealer experience trying to pay them money to fix it. Loved the car, was NOT willing to continue to own it knowing that more of that was in my future. I think the new pricing on the Bolt makes it a fantastic deal, but I won't buy one purely because of the corporate culture. 

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