AM Online

Ford’s warning shot for contract hire firms

Ford has warned contract hire companies that it is keeping a close eye on websites which advertise heavily discounted new cars and will terminate deals with any companies that are illegally selling on vehicles.

The carmaker audited its fleet business last year after discovering that some contract hire companies were offering cars for sale on discount websites within three months of purchase.

“In a handful of cases we have terminated deals. These companies had ceased to be contract hire companies,” Ford of Britain chairman and chief executive Roelant de Waard told AM.

Companies were typically operating fleets of around 500 vehicles.

In some cases, an individual in the business had taken the decision to sell on cars; in other instances, it had been company strategy to sell on cars at profit.

Although the practice is illegal, Ford decided not to take legal action.

It recovered the cars and ended the deal.

“It isn’t worth taking it any further,” added de Waard.

“The problem will continue to pop up here and there.

"It is important that we prevent it because they are competing with our retail sales and using special terms.

“It’s not good for our business or for our dealers’ businesses and it’s illegal.”

However, de Waard said the practice raised an interesting consideration about added value services, pointing to experiences in the commercial vehicle sector.

“What’s the value that people are getting from using intermediaries?” he asked.

“If it’s only a lower price, then there is no value, but if it is a certain service, for example helping people to identify the manufacturers with the best financial services offer on short leases, then it might have a place in the market.

“Sometimes it’s a specialist function for finding the right vehicle at the right price – something the network doesn’t do everyday. We will need to look at whether our leasing products are perfectly suited to this.”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment

Comments

No comments have been made yet.