Car and Driver: Ford Moving toward Build-to-Order, Away from Packed Dealer Lots

[wemay]

Car and Driver: Ford Moving toward Build-to-Order, Away from Packed Dealer Lots.

Ford Moving toward Build-to-Order, Away from Packed Dealer Lots

'I know we're wasting money on incentives,' says CEO Jim Farley, acknowledging the way people buy cars and trucks is changing.

www.caranddriver.com

 

[Rochev]

This is strange. I never thought of dealer lots disappearing.

 

[Propflux01]

Just another "Brick and Mortar" disappearing.

 

[MONKEYMAN]

Most important thing for me is the test drive. How does that work with Build-to-Order?

 

[Skippy722]

Now everyone who says they want a bare bones stripped out model and can’t find them on lots will be able to buy one!

 

[loneryder]

Probably because they have to. Can’t get parts. Of all the vehicles I’ve bought in my life, I’ve only ordered 2. I only took one because the dealer got one in like it and I took that one.

 

[tblt44]

They can have smaller lots.
Less vehicles to insure on the lot.
They will still have a small handfull you could test drive and or buy onsite.

 

[PimTac]

In many ways it makes good business sense. A lot of real estate is taken up by dealer lots.

As mentioned already, those BITOGers that want stripped down bare bones vehicles, now is your chance.

 

[Dogman]

Getting end of year pricing may be a thing of the past?

 

[MrHorspwer]

We are really committed to going to an order-based system and keeping inventories at 50 to 60 days' supply

That's the most telling quote.

A 60 day supply of F150 is still 150,000 trucks.

I'd expect Ford to lean into the build-to-order model on specialty vehicles like the Mach-E and models that people tend to buy (not lease) like Bronco and Super Duty trucks. For volume sellers that follow the lease-wash-rinse-repeat every 2-3 years like Explorer, Escape, and F150, there will likely be plenty on the lots to suit their needs.

 

[samven]

I guess now the dealership sales side will have to specialize in Certified pre owned, and the service department will do delivery and warranty. You will lose half the dealerships and service time will double. Either that or Ford will loose sales as the others grow and they will scramble to reverse direction. They will still have to keep some dealers or company owned stores opened for repairs. How many vehicles are they going to sell if the nearest warranty dept is 100 miles away.

 

[Danh]

I guess now the dealership sales side will have to specialize in Certified pre owned, and the service department will do delivery and warranty. You will lose half the dealerships and service time will double. Either that or Ford will loose sales as the others grow and they will scramble to reverse direction. They will still have to keep some dealers or company owned stores opened for repairs. How many vehicles are they going to sell if the nearest warranty dept is 100 miles away.

I’ve ordered number of cars over the years and the sales and delivery process is the same as if the car was in the lot, just takes longer on the calendar. States typically don’t allow auto manufacturers to sell directly to consumers, so the dealer model would remain intact.

The dealer would benefit from lower real estate costs and floor plan interest, but there are a lot of consumers who want to decide on a car and drive it home the next day. Not sure they’ll be willing to wait a few weeks for a factory order to appear.

 

[CheezWhiz]

Now everyone who says they want a bare bones stripped out model and can’t find them on lots will be able to buy one!

i wonder how this might influence the distribution of trims sold for a given model? if you are ordering anyway, maybe a lot of people that wanted the base model but bumped up to the volume trim due to availability on the dealer lots will revert to buying the base model.

on a related note, could this result in changes to which trims are available to retail buyers on certain models? consider a Tahoe, I think retail buyers can’t get a work truck equivalent - tiny radio, vinyl floors and seats. but perhaps this is because it has been dealers configuring the vehicles for what they wanted on their lots, rather than individual buyers making their selections?

I actually wound up in a crew 2500HD as a family truckster partly because they don’t sell stripped-down Tahoes and stripped down crew 1500s are hard to find. but you do find a few on the lots in a crew 3/4 ton. so i paid 35k new for a 2016 2500HD new, because the alternative was paying 37k for an LT silverado 1500 or nearly 50 grand for an LS Tahoe. If I could have just as easily purchased a crew 1500 for 32k or a Tahoe “work truck” for 40k, it would have been a much tougher decision!

 

[samven]

I know some states ban it but doesn't Tesla only sell direct.

 

[JeffKeryk]

The online selling model is gaining popularity and just makes sense.
Who do you think pays for that big, beautiful dealership?
Who do you think pays the slaesman, manager, next manager, GM, car warsh guys, janitors, gas and electricity?
What value do they add vs cost they incur?

Direct sales is simply cutting out the middleman.

JD Power Survey

 

[supton]

They can have smaller lots.
Less vehicles to insure on the lot.
They will still have a small handfull you could test drive and or buy onsite.

That is my thought. They may to buy a handful for test drives each year, but I bet they can be reuse as loaners. After a few years flip as used cars.

But losing out on spur of the moment sales? That would rough I think. So I could see having some on the lot, but those might have some markup on them. At least until end of month, on the last day, if quota wasn’t met yet.

Or might such sales incentives be also impacted too?

 

[JeffKeryk]

I know some states ban it but doesn't Tesla only sell direct.

Yes, Tesla does not have dealerships, at least not in the traditional sense.
They have service centers where there are sales staff to answer questions and take you on test drives.
But they do not carry new inventory. If you decide to buy, you go to Tesla.com and click-click-click.

Buy a Model 3

 

[Trav]

Standard operating practice in Europe, lots of very small dealers. My friend is a Seat dealer, he has about 5 cars in front for sale the rest are ordered, the garage is small but well equipped, customer service is better than at the big company owned facilities.

 

[vw7674]

This is strange. I never thought of dealer lots disappearing.

the in-person gouge-fest is over. From now on, you will be gouged over the phone & you'll like it!!
edit: it's that or buy a Toyota. Take it or leave it.

 

[slacktide_bitog]

Yay no more lots full of silver and gray crap

Hopefully more people will order the cool colors