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This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. He wasn’t saying dealerships are going away; he was actually say

by medler 4y ago

This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. He wasn’t saying dealerships are going away; he was actually saying the opposite. The point he was making was that Ford is going to adopt some of Tesla’s practices while using the dealership network to compete with them. Here’s the quote with more context: “I believe for retail, we have to -- it's kind of like what happened between Amazon and Target. Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon. They used their expertise as a physical retailer to their advantage, but they modernized the e-commerce piece. So it would be really easy to do business with them. It's exactly what we have to do on the retail side. We got to go to non-negotiated price. We've got to go to a 100% online, the vehicle there is no inventory goes directly to the customer, 100% remote pickup and delivery, but then we have this opportunity to use our physical presence, they outperform them. Like, I believe some Mach-E and Lightning customers would love to have a Mustang for the weekend. Maybe they want a Super Duty. I can do that, they can't do that, unless they ran a Ford.” Source: https://seekingalpha.com/article/4515793-ford-motor-company-f-ceo-james-farley-presents-bernstein-38th-annual-strategic-decisions https://seekingalpha.com/article/4515793-ford-motor-company-...

bombcar 4y ago
Speaking of Target they’re getting sneaky - the online for pickup or delivery price is often higher than the same item instore. Once I saw that I got a bit sad.
- antiterra 4y ago
  In my experience it’s usually the opposite and I have to ask for a price match to the online price. It is their policy in the contiguous US to price match target.com to Target Store and Target Store to target.com. The policy doesn’t cover Target Store to other Target Store.
  - dixie_land 4y ago
    not target, but the “contiguous US” part reminded me of the time where at a Hawaii Walmart they refused to price match walmart.com. so I just ordered online right then and there and chose to pick up in the same store. I watched the same staff picking up the same item from the shelf and called me to the online pick up area…
    - bombcar 4y ago
      I’ve had employees tell me to do exactly that because an online order counts as good toward the store’s metrics (or at least not bad) but a price match counts against them.
jvm 4y ago
Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?
- toomuchtodo 4y ago
  Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck of a time hacking around dealer franchise law compared to EV automakers who have no established dealer network. Someone on Twitter recently posted their Model S turning over 400,000km with only $3k in maintenance costs. Imagine at scale what that does to dealership revenue when 5, 10, 15 million EVs are sold per year (which will happen in the next 5-10 years). https://twitter.com/pluginalberta/status/1531406942119137281 https://twitter.com/pluginalberta/status/1531406942119137281 > "We only profit in one way: from new car sales and new car sales alone," Maron said. "We can't ... profit from services because our cars have far less parts than gas-powered cars. There's no regular service visits for engine tune-ups and oil changes. ... We don't make money off financing programs. We don't have insurance products or add-ons. A franchise dealer would look at this and scratch their heads. They would not know how to make money on this model." > Maron says Tesla is fully committed to its mission of replacing all gas-powered cars with electric vehicles -- a mission auto dealers may not be eager to embrace. > "We don't simply believe that electric vehicles represent a nice complement to gas-powered cars," Maron said. "We believe it's imperative they are replaced entirely by electric vehicles. ... It would be impossible for traditional dealers to convey this message adequately. This isn't a knock on them, but dealers are not fundamentally committed to the mission of EVs — we are. They make 99% of their revenue off of gas-powered cars. If you're opening a Yankees team store, are you going to ask a lifelong Red Sox fan to manage it?" https://www.buzzfeednews.com/article/johanabhuiyan/tesla-slams-general-motors-for-opposing-direct-sales https://www.buzzfeednews.com/article/johanabhuiyan/tesla-sla... (2016: 7 Reasons Why Tesla Doesn't Want To Sell Through Dealerships)
happyopossum 4y ago
> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. How does it ‘read too much into it’? He literally says they need to go to a 100% online order, no inventory, no negotiation sales model. That’s a HUGE a change from today.
- medler 4y ago
  I just think it’s an off-the-cuff comment and he probably didn’t mean it. He’s not announcing a new change in the way they do business. My read is that he’s generally saying he wants Ford to be more like Tesla. It’s not clear if any of his suggestions are even legal, given the laws in most states against direct sales (in some states there are special exemptions just for Tesla).
  - ericlewis 4y ago
    I don't think CEOs of public companies are allowed to say things that they don't mean, seems like the SEC would be up their butt about that that. His suggestions are perfectly legal if executed in a legal way, which they have started to do with Ford Blue split.
- bluGill 4y ago
  Nothing in that (at least the part you quote - I didn't read/hear the entire comment) says you can't have dealers. John Deere (the company I work for) works this way: everything is just in time, if you want a new tractor you order it and get it 3-12 months later. You still have to order from a dealer. Dealers do not keep new tractors on the lot, except for demo units and service loaners. I'm not sure how this will work for Ford though. Deere is selling to businesses, a new tractor is a financial decision talked over with the accountant, and are bought/traded in based on tax deductions (the date you place the order counts for ta purposes not the day you take delivery). Cars seem like more of an impulse purchase and so people want to go to the dealer and drive a new car off the lot. Dealers (and Ford) doesn't want to risk someone buying a car and then changing their mind, which is a lot more likely to happen if you don't have the car yet. Even for Deere, dealers normally keep new small tractors on the lot.
bin_bash 4y ago
Frankly I don't think you're very good at reading executives' words: you have to read through the lines and notice what they're not saying. Nowhere in that does he say outright where dealers fit into an online, fixed price world. He only makes super vague statements like "dealers will be more specialized." Reads to me like Jim isn't planning on dealers being around in the future but he's being vague enough to try not pissing the dealers off in the near-term.
- medler 4y ago
  My interpretation is informed by the knowledge that what he’s saying is not legal in most of the United States. It’s understood that dealers cut into Ford’s profit margin, but Ford is not at liberty to change the laws in numerous states.
  - gpm 4y ago
    Ford is however at the liberty to lobby for laws to change, and to simply stop selling (electric) vehicles where the laws don't allow for direct sales - like Tesla did. Tesla has pretty convincingly demonstrated that it's possible to run a car company in the US without paying off the dealerships. It's only going to be easier for the second mover here to also stop.
    - colinmhayes 4y ago
      Tesla had a big advantage because they never had dealers. Many states have laws banning online sales once dealerships are established.
      - bin_bash 4y ago
        I wonder if maybe they're preparing to fully spin off the EV models into its own corporation for this exact reason: https://chargedevs.com/newswire/ford-to-spin-off-its-evs-into-separate-model-e-business-unit/ https://chargedevs.com/newswire/ford-to-spin-off-its-evs-int...
m348e912 4y ago
>>Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon. I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store. Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition. Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.
- zorak8me 4y ago
  Re: bestbuy “showrooming” issues, I think they actually figured out how to make it a value driver for them, whereas it killed others. It’s a great place to look at products, and they price match so you can walk out the door with the product instead of waiting.
  - yourapostasy 4y ago
    > ... and they price match so you can walk out the door with the product instead of waiting. I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and services before and after they walk out the door, or their COGS is way better, or some other activity to make up their bigger overheads versus an e-commerce marketplace. Can anyone offer any insight how BestBuy is long-term sustainable with the online price matching policy?
    - ericlewis 4y ago
user3939382 4y ago
> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it Ford announced 3 months ago that they were forming a new corporation, Ford Blue, whose purpose is to skirt state dealership laws in order to lawfully sell these EVs direct to consumers. So this is definitely not just a comment. https://www.freep.com/story/money/cars/ford/2022/03/02/ford-ceo-jim-farley-unveils-plan-ev-model-e/6981544001/ https://www.freep.com/story/money/cars/ford/2022/03/02/ford-...
- TulliusCicero 4y ago
  Man, I wish. Dealerships are plague.
- spikels 4y ago
  Was typing almost the same thing at the same time. The OEMs want to us EVs to finally dump the dealerships.
- medler 4y ago
  I’m skeptical that this reorg will allow Ford to sell direct to consumers, and I haven’t seen any reporting saying that it will. Notably, Ford has explicitly said they’re not doing that: “We’re not keeping dealers in the mix 'for the moment.' We are betting on dealers for the long term. I want to make that really clear. I’m not mincing words. We will have new standards and a new experience. But we learned a lot by watching Tesla." Maybe going direct is the secret plan, but I don’t see how they get there.
  - devy 4y ago
    > Maybe going direct is the secret plan, but I don’t see how they get there. Yeah, the dealership and the state level dealership associations aren't going to go out of business without some good fight. Even though I personally don't like the markup to be paid at the dealerships, but they exist for some good reasons: educate the consumers, financing, DMV paperwork and most importantly service your vehicles. EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with High Voltage battery systems and/or the infotainment firmware diagnostics and updates.
gigatexal 4y ago
Dealerships should go away though. They’re corrupt institutions that prey on the uniformed. New cars can be bought configured from the factory and delivered to one’s door. The dealership then only serves as a way to service the vehicle. For used car purchases that’s a different story I guess. Maybe dealerships only exist to service cars and sell used ones. Shrug.
spikels 4y ago
Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue). There was speculation at the time that this was in part free itself of the dealership sales model. The dealers would keep the dying ICE business while the fast growing EV business would start with clean slate. Farley was quoted describing the EV sales model as: > "It's going to be much more efficient, a lot more online. It's going to be a really different model."[1] Obviously this will be very controversial and subject to interference by state legislators who have often protected dealerships. Will be interesting to see this transition. https://insideevs.com/news/571959/ford-dealerships-impacted-ev-ice-split/ https://insideevs.com/news/571959/ford-dealerships-impacted-...
- runnerup 4y ago
  Huge thanks for this context.
- wumpus 4y ago
  > Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue). State legislatures and courts have been smacking down this kind of shenanigan for nearly a century now.
  - wumpus 4y ago
    Kinda fun when I get mildly downvoted for mentioning a relevant historical fact.
  - mrDmrTmrJ 4y ago
    Not sure why you're being downvoted. Personally, I think theres ~50% chance Ford will have to split into two companies (separate stock ticker etc.) to be allowed to have an EV only, no-dealership, sales model,
- norman784 4y ago
  Excuse my ignorance, but how I understand is that ICE can't be sold directly to the customers, so that's why dealerships exists (?), so my question is, are EV not regulated or treated differently than ICE?
compsciphd 4y ago
I honestly felt that this is where Sears dropped the ball. If any company should have had the "DNA" to compete with Amazon, it should have been Sears. Which basically owned the catalog/mail order space before the internet. They could have leveraged their large stores to be showrooms / distribution hubs (that they mostly already owned, which is why the private equity people were so interested in them, due to their real estate holdings). You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Their logistics pricing should be cheaper than what amazon could have done (as they are skipping last mile), and for many consumers it wouldn't have made much of a difference (the sears that was local to me growing up was in the same general shopping center as the groccery store we generally went to, so we were regularly there). Of course they did try to do "in store pickup", but this was when they were dying already and the experience was pretty terrible (i still used it a bunch back in the day as at one point they were basically paying us to shop at sears via the amount of free shop your way points they were giving out).
- sokoloff 4y ago
  > You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Why would anyone want that? If I’m going to go so much as 15 minutes out of my way, I expect to leave with the item in my hand that day. That’s the killer advantage for brick and mortar retail. I don’t even want to go to the store the first time, but I sure as hell don’t want to go twice if Amazon offers the same overall latency with zero trips to the store.
- bluGill 4y ago
  Sears made several attempts at online shopping over the years, none worked out. They finally gave up and it and catalog orders the year before the web took off. Hindsight is 20/20, but at the time it looked like one more attempt at online ordering would just be throwing good money after bad.
- WorldMaker 4y ago
  Sears had the DNA and definitely were the Amazon of the previous century, but they didn't have the fight left in them. By the time Amazon showed up they were already being chewed apart by vultures for being fat, old, and complacent. There was already an LBO or three from private equity firms on their books and then the bad merger with K-Mart all with the intent of breaking Sears apart for pieces/scraps/brands anyway. Sears was already a walking corpse when Amazon came to fight. I feel like the wilder "DNA fight" that wasn't was "80's Sears/Amazon wannabe": Service Merchandise. They tried to recreate the Sears formula for the late 1980s/early 1990s and basically convergently evolved the Ikea model before Ikea grew any US presence as just big warehouses with smaller showrooms up front. They made a bunch of silly mistakes in the 90s trying to grow beyond their roots in primarily the US South region to more national regard/footprint, but if they hadn't made those mistakes they probably could have been a real interesting contender against Amazon.
beowulfey 4y ago
Even if this is the case, rather than direct-to-consumer, this would STILL be a tremendous improvement in the car sales model and I definitely look forward to it!
Salgat 4y ago
That's not in support of traditional dealerships, that's a direct attack on their business model while simultaneously taking advantage of them. Sounds like Ford wants to turn dealerships into physical retail stores, like a Walmart for cars, which I imagine no dealership is too fond about doing.

by medler 4y ago

bombcar 4y ago

Speaking of Target they’re getting sneaky - the online for pickup or delivery price is often higher than the same item instore. Once I saw that I got a bit sad.

antiterra 4y ago
In my experience it’s usually the opposite and I have to ask for a price match to the online price. It is their policy in the contiguous US to price match target.com to Target Store and Target Store to target.com. The policy doesn’t cover Target Store to other Target Store.
- dixie_land 4y ago
  not target, but the “contiguous US” part reminded me of the time where at a Hawaii Walmart they refused to price match walmart.com. so I just ordered online right then and there and chose to pick up in the same store. I watched the same staff picking up the same item from the shelf and called me to the online pick up area…
  - bombcar 4y ago
    I’ve had employees tell me to do exactly that because an online order counts as good toward the store’s metrics (or at least not bad) but a price match counts against them.

jvm 4y ago

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

toomuchtodo 4y ago
Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck of a time hacking around dealer franchise law compared to EV automakers who have no established dealer network. Someone on Twitter recently posted their Model S turning over 400,000km with only $3k in maintenance costs. Imagine at scale what that does to dealership revenue when 5, 10, 15 million EVs are sold per year (which will happen in the next 5-10 years). https://twitter.com/pluginalberta/status/1531406942119137281 https://twitter.com/pluginalberta/status/1531406942119137281 > "We only profit in one way: from new car sales and new car sales alone," Maron said. "We can't ... profit from services because our cars have far less parts than gas-powered cars. There's no regular service visits for engine tune-ups and oil changes. ... We don't make money off financing programs. We don't have insurance products or add-ons. A franchise dealer would look at this and scratch their heads. They would not know how to make money on this model." > Maron says Tesla is fully committed to its mission of replacing all gas-powered cars with electric vehicles -- a mission auto dealers may not be eager to embrace. > "We don't simply believe that electric vehicles represent a nice complement to gas-powered cars," Maron said. "We believe it's imperative they are replaced entirely by electric vehicles. ... It would be impossible for traditional dealers to convey this message adequately. This isn't a knock on them, but dealers are not fundamentally committed to the mission of EVs — we are. They make 99% of their revenue off of gas-powered cars. If you're opening a Yankees team store, are you going to ask a lifelong Red Sox fan to manage it?" https://www.buzzfeednews.com/article/johanabhuiyan/tesla-slams-general-motors-for-opposing-direct-sales https://www.buzzfeednews.com/article/johanabhuiyan/tesla-sla... (2016: 7 Reasons Why Tesla Doesn't Want To Sell Through Dealerships)

happyopossum 4y ago

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. How does it ‘read too much into it’? He literally says they need to go to a 100% online order, no inventory, no negotiation sales model. That’s a HUGE a change from today.

medler 4y ago
I just think it’s an off-the-cuff comment and he probably didn’t mean it. He’s not announcing a new change in the way they do business. My read is that he’s generally saying he wants Ford to be more like Tesla. It’s not clear if any of his suggestions are even legal, given the laws in most states against direct sales (in some states there are special exemptions just for Tesla).
- ericlewis 4y ago
  I don't think CEOs of public companies are allowed to say things that they don't mean, seems like the SEC would be up their butt about that that. His suggestions are perfectly legal if executed in a legal way, which they have started to do with Ford Blue split.
bluGill 4y ago
Nothing in that (at least the part you quote - I didn't read/hear the entire comment) says you can't have dealers. John Deere (the company I work for) works this way: everything is just in time, if you want a new tractor you order it and get it 3-12 months later. You still have to order from a dealer. Dealers do not keep new tractors on the lot, except for demo units and service loaners. I'm not sure how this will work for Ford though. Deere is selling to businesses, a new tractor is a financial decision talked over with the accountant, and are bought/traded in based on tax deductions (the date you place the order counts for ta purposes not the day you take delivery). Cars seem like more of an impulse purchase and so people want to go to the dealer and drive a new car off the lot. Dealers (and Ford) doesn't want to risk someone buying a car and then changing their mind, which is a lot more likely to happen if you don't have the car yet. Even for Deere, dealers normally keep new small tractors on the lot.

bin_bash 4y ago

Frankly I don't think you're very good at reading executives' words: you have to read through the lines and notice what they're not saying. Nowhere in that does he say outright where dealers fit into an online, fixed price world. He only makes super vague statements like "dealers will be more specialized." Reads to me like Jim isn't planning on dealers being around in the future but he's being vague enough to try not pissing the dealers off in the near-term.

medler 4y ago
My interpretation is informed by the knowledge that what he’s saying is not legal in most of the United States. It’s understood that dealers cut into Ford’s profit margin, but Ford is not at liberty to change the laws in numerous states.
- gpm 4y ago
  Ford is however at the liberty to lobby for laws to change, and to simply stop selling (electric) vehicles where the laws don't allow for direct sales - like Tesla did. Tesla has pretty convincingly demonstrated that it's possible to run a car company in the US without paying off the dealerships. It's only going to be easier for the second mover here to also stop.
  - colinmhayes 4y ago
    Tesla had a big advantage because they never had dealers. Many states have laws banning online sales once dealerships are established.
    - bin_bash 4y ago
      I wonder if maybe they're preparing to fully spin off the EV models into its own corporation for this exact reason: https://chargedevs.com/newswire/ford-to-spin-off-its-evs-into-separate-model-e-business-unit/ https://chargedevs.com/newswire/ford-to-spin-off-its-evs-int...

m348e912 4y ago

>>Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon. I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store. Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition. Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.

zorak8me 4y ago
Re: bestbuy “showrooming” issues, I think they actually figured out how to make it a value driver for them, whereas it killed others. It’s a great place to look at products, and they price match so you can walk out the door with the product instead of waiting.
- yourapostasy 4y ago
  > ... and they price match so you can walk out the door with the product instead of waiting. I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and services before and after they walk out the door, or their COGS is way better, or some other activity to make up their bigger overheads versus an e-commerce marketplace. Can anyone offer any insight how BestBuy is long-term sustainable with the online price matching policy?
  - ericlewis 4y ago

user3939382 4y ago

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it Ford announced 3 months ago that they were forming a new corporation, Ford Blue, whose purpose is to skirt state dealership laws in order to lawfully sell these EVs direct to consumers. So this is definitely not just a comment. https://www.freep.com/story/money/cars/ford/2022/03/02/ford-ceo-jim-farley-unveils-plan-ev-model-e/6981544001/ https://www.freep.com/story/money/cars/ford/2022/03/02/ford-...

TulliusCicero 4y ago
Man, I wish. Dealerships are plague.
spikels 4y ago
Was typing almost the same thing at the same time. The OEMs want to us EVs to finally dump the dealerships.
medler 4y ago
I’m skeptical that this reorg will allow Ford to sell direct to consumers, and I haven’t seen any reporting saying that it will. Notably, Ford has explicitly said they’re not doing that: “We’re not keeping dealers in the mix 'for the moment.' We are betting on dealers for the long term. I want to make that really clear. I’m not mincing words. We will have new standards and a new experience. But we learned a lot by watching Tesla." Maybe going direct is the secret plan, but I don’t see how they get there.
- devy 4y ago
  > Maybe going direct is the secret plan, but I don’t see how they get there. Yeah, the dealership and the state level dealership associations aren't going to go out of business without some good fight. Even though I personally don't like the markup to be paid at the dealerships, but they exist for some good reasons: educate the consumers, financing, DMV paperwork and most importantly service your vehicles. EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with High Voltage battery systems and/or the infotainment firmware diagnostics and updates.

gigatexal 4y ago

Dealerships should go away though. They’re corrupt institutions that prey on the uniformed. New cars can be bought configured from the factory and delivered to one’s door. The dealership then only serves as a way to service the vehicle. For used car purchases that’s a different story I guess. Maybe dealerships only exist to service cars and sell used ones. Shrug.

spikels 4y ago

Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue). There was speculation at the time that this was in part free itself of the dealership sales model. The dealers would keep the dying ICE business while the fast growing EV business would start with clean slate. Farley was quoted describing the EV sales model as: > "It's going to be much more efficient, a lot more online. It's going to be a really different model."[1] Obviously this will be very controversial and subject to interference by state legislators who have often protected dealerships. Will be interesting to see this transition. https://insideevs.com/news/571959/ford-dealerships-impacted-ev-ice-split/ https://insideevs.com/news/571959/ford-dealerships-impacted-...

runnerup 4y ago
Huge thanks for this context.
wumpus 4y ago
> Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue). State legislatures and courts have been smacking down this kind of shenanigan for nearly a century now.
- wumpus 4y ago
  Kinda fun when I get mildly downvoted for mentioning a relevant historical fact.
- mrDmrTmrJ 4y ago
  Not sure why you're being downvoted. Personally, I think theres ~50% chance Ford will have to split into two companies (separate stock ticker etc.) to be allowed to have an EV only, no-dealership, sales model,
norman784 4y ago
Excuse my ignorance, but how I understand is that ICE can't be sold directly to the customers, so that's why dealerships exists (?), so my question is, are EV not regulated or treated differently than ICE?

compsciphd 4y ago

I honestly felt that this is where Sears dropped the ball. If any company should have had the "DNA" to compete with Amazon, it should have been Sears. Which basically owned the catalog/mail order space before the internet. They could have leveraged their large stores to be showrooms / distribution hubs (that they mostly already owned, which is why the private equity people were so interested in them, due to their real estate holdings). You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Their logistics pricing should be cheaper than what amazon could have done (as they are skipping last mile), and for many consumers it wouldn't have made much of a difference (the sears that was local to me growing up was in the same general shopping center as the groccery store we generally went to, so we were regularly there). Of course they did try to do "in store pickup", but this was when they were dying already and the experience was pretty terrible (i still used it a bunch back in the day as at one point they were basically paying us to shop at sears via the amount of free shop your way points they were giving out).

sokoloff 4y ago
> You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Why would anyone want that? If I’m going to go so much as 15 minutes out of my way, I expect to leave with the item in my hand that day. That’s the killer advantage for brick and mortar retail. I don’t even want to go to the store the first time, but I sure as hell don’t want to go twice if Amazon offers the same overall latency with zero trips to the store.
bluGill 4y ago
Sears made several attempts at online shopping over the years, none worked out. They finally gave up and it and catalog orders the year before the web took off. Hindsight is 20/20, but at the time it looked like one more attempt at online ordering would just be throwing good money after bad.
WorldMaker 4y ago
Sears had the DNA and definitely were the Amazon of the previous century, but they didn't have the fight left in them. By the time Amazon showed up they were already being chewed apart by vultures for being fat, old, and complacent. There was already an LBO or three from private equity firms on their books and then the bad merger with K-Mart all with the intent of breaking Sears apart for pieces/scraps/brands anyway. Sears was already a walking corpse when Amazon came to fight. I feel like the wilder "DNA fight" that wasn't was "80's Sears/Amazon wannabe": Service Merchandise. They tried to recreate the Sears formula for the late 1980s/early 1990s and basically convergently evolved the Ikea model before Ikea grew any US presence as just big warehouses with smaller showrooms up front. They made a bunch of silly mistakes in the 90s trying to grow beyond their roots in primarily the US South region to more national regard/footprint, but if they hadn't made those mistakes they probably could have been a real interesting contender against Amazon.

beowulfey 4y ago

Even if this is the case, rather than direct-to-consumer, this would STILL be a tremendous improvement in the car sales model and I definitely look forward to it!

Salgat 4y ago

That's not in support of traditional dealerships, that's a direct attack on their business model while simultaneously taking advantage of them. Sounds like Ford wants to turn dealerships into physical retail stores, like a Walmart for cars, which I imagine no dealership is too fond about doing.