Ford wants to compete with Tesla, but its dealers are getting in the way

Image for article titled Ford wants to compete with Tesla, but its dealers are getting in the way

Photo: David Tracy

Ford Motor Company is serious about offering more electric cars in its own right Make a line NS Ford Mustang Mach-I and next F-150 electricity Impressive products. However, the company’s approach to actually selling these products is frustrating some customers and looking elsewhere. While short-term sales appear to be good now, may not have long-term effects.

The first issue is that Ford has moved on to these EVs. Call “e-invoice” pricing; TeaThat means the invoice price (or dealer cost) and the MSRP are the same. Dealer invoice pricing is typically lower, allowing dealers to offer deals below MSRP that are not as clean or simple to the consumer, who instead want to pay the cost of the car instead Worry about getting the best deal. With this “e-invoice” pricing, whether or not Ford will accept it, This seem To take a page from Tesla’s playbook where everyone pays the same price for a car. If you buy a Tesla, the price online is what you pay. No play, no dealer crap. Except, despite Ford’s “e-invoicing” pricing, dealers can play the game and markup the cars nicely. up MSRP. It has recently been reported that Ford is implementing a program where dealers can “sneak” at each other if a dealer advertises incoming light Down MSRP. awell advertised up The sticker price is all right, though; TeaWhat he calls a “voluntary” program A dealer can sell a car for whatever he decides, but that’s only Attempt to discourage advertisements indicating any level of savings.

I have assisted with many mach-e deals for different customers in different regions of the country, And although there are some vehicles for sale at MSRP, I’ve Seen Over $10,000 On Stickers. Even the dealers are putting a markup of over $33,000 on these cars.

Image for article titled Ford wants to compete with Tesla, but its dealers are getting in the way

screenshot: Bowen Scarf Ford

Image for article titled Ford wants to compete with Tesla, but its dealers are getting in the way

screenshot: Payab

There is too much demand and not enough supply. When those factors come together, sellers can charge whatever they want. However, earlier this summer, Ford’s communications manager Mike Levine sent a tweet responding to customer frustrations about dealer markups.

Image for article titled Ford wants to compete with Tesla, but its dealers are getting in the way

screenshot: Twitter

I was really curious how Mr. Levine, or Ford Corporate for that matter, There are plans to implement some sort of “policy” that would discourage dealers from selling these cars at MSRP. I have reached out to him on a few occasions to get clarity on the matter, but did not get any response. I got a response from Emma Berg who is Ford’s director of communications for EVs:

“If a customer is not happy with their dealer, our team can help them find a different dealer that is a better match. Dealers are independent franchisees and are ultimately the final payment for any vehicle by the customer. The price is agreed upon between you and the dealer.

I completely understand the franchise agreement and dealers can sell whatever they want. While I think it’s great that Mr. Levine was personally proactive in communicating with dealers on behalf of customers, it’s also not good for the brand when your PR representative has to be the mediator between the customer and the retailer. .

There are ways to limit these practices if an automaker was really serious about it. In 2014 Dodge made a plan to limit the Hellcat markup and tie the vehicle to the future Allocation (i.e. how many cars the manufacturer will send to the dealer) how fast the dealers Sold out the first round of Hellcats. While Ford cannot decide what a dealer can sell the car for, it A dealer can tie future allocations to other in-demand cars based on how many vehicles it sells at or below MSRP.

The second issue is that when it comes to leasing Ford’s EVs, lessees can’t take advantage of tax credits as part of the cost reduction on the car. Ford Financial Services will not carry forward this exemption. Many brands use the Federal EV Tax Credit as an upfront discount on essentially leases. For example, if you lease a VW ID4, which is like a Mach-There is no margin between e, invoice and MSRP, you get $7,500 discount which makes the VW Lease more competitive than the similarly priced Mach-I.

Right now demand far exceeds supply, which creates a market where sellers have leverage, but this will not always be the case. Tesla is attracting customers not only because of an attractive product, but because people don’t want to buy cars with typical dealer constraints. If Ford, and other mainstream automakers want to compete in that space, offer is the only electrified vehicle Not enough. companies going to work with your dealership to figure out a way so the sales process isn’t shipping EV customers Competitor.

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