Ford CEO Finally Confirms New "Agency Model"

[5.0ALM]

This Youtube channel is notorious for click bait titles, but FYI... coming to Europe first.

Mar 16, 2023

The Ford CEO has just made things clear about the future of Dealers.
After years of battling their marked-up pricing and shady sales tactics, the way Ford sells cars is changing.
Ford is testing out something called an "Agency Model" which it intends to roll out to all deals across the world if it proves a success.
What this means for dealers is unknown, but as you can guess, it isn't going to be good.
Today we will explain what Ford is planning to do and what this means for dealers and customers.

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[MustangMac67]

This Youtube channel is notorious for click bait titles, but FYI... coming to Europe first.

Mar 16, 2023

The Ford CEO has just made things clear about the future of Dealers.
After years of battling their marked-up pricing and shady sales tactics, the way Ford sells cars is changing.
Ford is testing out something called an "Agency Model" which it intends to roll out to all deals across the world if it proves a success.
What this means for dealers is unknown, but as you can guess, it isn't going to be good.
Today we will explain what Ford is planning to do and what this means for dealers and customers.

Yup, this is the channel I hate with the clikbait. "[Insert hook]! [Insert that does not exist and never will] competitor to [existing car] shocks the industry!"

 

[Shelbeast]

This Youtube channel is notorious for click bait titles, but FYI... coming to Europe first.

Mar 16, 2023

The Ford CEO has just made things clear about the future of Dealers.
After years of battling their marked-up pricing and shady sales tactics, the way Ford sells cars is changing.
Ford is testing out something called an "Agency Model" which it intends to roll out to all deals across the world if it proves a success.
What this means for dealers is unknown, but as you can guess, it isn't going to be good.
Today we will explain what Ford is planning to do and what this means for dealers and customers.

The agency model is coming: Why this is good news for dealers | Automotive News Europe (autonews.com)

It's a step in the right direction. I want to be able to buy straight from the manuf. though. No middle guy! Fly, pick it up, and save $2K off destination/dealer fees. Maybe several thousand. Death to dealerships! I do wonder how the used market would look.

 

[BrianJ77]

Who will service our vehicles for major repairs, recall and warranty work? Sales and service are tied together. IDK if one can survive without the other financially, but I also confess I have no idea how much each side of the dealership brings in.

 

[93-Oct Mayne]

Dealers barely make anything on new cars anyways. They'll just pivot to service and used cars

 

[spedy7]

Who will service our vehicles for major repairs, recall and warranty work? Sales and service are tied together. IDK if one can survive without the other financially, but I also confess I have no idea how much each side of the dealership brings in.

It'll probably end up like Tesla in a way - the dealer will still exist, but they have no say on price of the actual car and Ford will directly get the monies with the dealer probably getting a cut. I think Ford's already working on rolling this plan out with their Model E division (electric vehicles).

Independent shops can get dealer level tools and have similar access to locked down stuff (ie: program keys), but it probably costs an arm and a leg for a normal shop to obtain and maintain access to. Ain't no way Ford would trust a random shop to do warranty repairs though...hell I think they barely trust us lol.

 

[shogun32]

Ain't no way Ford would trust a random shop to do warranty repairs though...hell I think they barely trust us lol.

have you SEEN what passes for work ethic at a franchise dealer? 3rd party shops SHOULD do warranty work - they have a reputation and a business to protect. Nobody chains a dealership closed despite having the world's worst technicians.

 

[Ericc B]

Sales and service are tied together.

No they are not, which has been proven for many years now by Tesla. It does however make sense to tie delivery and service together, as they require local brick and mortar locations with branding. And so that is also what Tesla does.

The agency model that Ford wants to pursue makes a lot of sense in any market where most cars are operational leased and simply turned in at the end of the contract period. This takes away the process of discussion over the value of a trade in car and makes it easy to simply specify and order a new car online. However in markets where most people own their cars (financed or not) there is still this dreadful negotiation process, which is what people hate the most and requires them to visit the dealership. The only difference is that the dealer is no longer able to jack up the price of the new vehicle and mislead the customer with an inflated value for their trade in. But in the end of the day this is a good thing too, as customers will become increasingly aware of the true value of used cars.

 

[lcbrownz]

Who will service our vehicles for major repairs, recall and warranty work? Sales and service are tied together. IDK if one can survive without the other financially, but I also confess I have no idea how much each side of the dealership brings in.

Just ask Tesla...

 

[dfwford]

Who will service our vehicles for major repairs, recall and warranty work? Sales and service are tied together. IDK if one can survive without the other financially, but I also confess I have no idea how much each side of the dealership brings in.

To piggy bank off the person above me, Tesla has corporate-owned service centers with Tesla corporate employees where repairs, recalls and warranty work are done.

 

[Stangomydreams]

Agency model has been standard practice in Europe for years. Storefront where you can see an example and place an order. Dealers with hundreds of examples are unheard of there.

 

[Ericc B]

Storefront where you can see an example and place an order. Dealers with hundreds of examples are unheard of there.

Correct

Agency model has been standard practice in Europe for years.

Not entirely true. The MSRP over here contains between 12 and 15% dealer margin that they can play with to either jack up their profit margin, spice up the value of a trade in, or use for a discount when there is no trade in. The agency model prohibits the dealer from charging anything but the exact MSRP for the car. Just like Apple and Tesla do.

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