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Future Ford dealer standards set to be ‘brutal’, reveals CEO Jim Farley

Ford president and CEO, Jim Farley

Ford chief executive Jim Farley has said that future dealer standards will be “brutal” to ensure that the brand has the physical network to outperform its car manufacturing competitors.

Addressing delegates at the Bernstein Strategic Decisions conference in New York, the Blue Oval boss suggested that the OEM had to be ready to do battle with emerging EV producers and restructure its spending towards consumer experience.

Central to that will be a shift to a “non-negotiated price”, he said, adding: “We've got to go to 100% online. There's no inventory (at dealerships), it goes directly to the customer. And 100% remote pickup and delivery.”

Farley added: "Then we have this opportunity to use our physical presence to outperform competitors.

"I think our dealers can do it. But the standards are going to be brutal. They're going to be very different than they are today."

An article in the Detroit Free Press revealed that Farley fears a price war with emerging electric vehicle (EV) producers from China.

He said that a “shakeout” of the sector could see some established car brands heading for the exit as cost-effective manufacturing in China will ensure that its brands emerge stronger than ever.

Following on from this, Farley suggested that Ford’s costs would have to be addressed.

The brand estimates that its distribution model is around $2,000 (around £1,600) per vehicle more expensive than Tesla, with a third of that cost spent on advertising.

This was despite a shift to pull Mach-E adverts after order banks were filled for the next two years.

Farley said: "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% of the customers come back to us."

Fairly said that the brand’s retailers would have to shift their focus towards improving customer service and delivering an improved aftersales experience.

"I believe there's a way for us," he said. "I feel so much better than even six months ago, because I know, I know exactly what we have to do. It's down to execution."

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