Ford considering a new business model

From Ford moving to build to order vehicles

The one-two punch of the pandemic and an unprecedented chip shortage have created a terrible car market right now. Unlike before, where you could walk onto a lot at any time and find over 100 cars with three other back lots with hundreds more cars, inventory is tight and dealers are greedy. The pandemic forced an industry to adapt quickly to customers wary of visiting a showroom with a potentially deadly virus going around. Ford is trying to read the room and as Car and Driver noted, wants more buyers to custom order their vehicles rather than choose from dealer stock.

The move comes amid long wait times and delays for buyers and their vehicles. Speaking on a conference call last week, CEO Jim Farley noted that he wants to keep dealer inventory low while simultaneously moving to an order based system:

“We are really committed to going to an order-based system and keeping inventories at 50 to 60 days’ supply.”

Speaking to Reuters Farley also admitted that building too many cars hurts them. Throwing cash on the hood, aka incentives, to move vehicles that have been sitting has always been a win for customers. But it hurts the company’s bottom line with Farley saying “I know we are wasting money on incentives. I don’t know where.”
Ford has started to move toward that car buying future, introducing services like Ford Express Buy. But dealers have the option to participate in it. See the problem? Ford wants to move in the right direction, but dealers have the option to participate. And, right now, the service is available at select dealers and only on the Mach-E.

Still, the company says the service, where you can build and price the vehicle, get an approval from Ford Credit, and have the vehicle delivered to your house, will expand to other models soon.

This does seem to be the next wave for car buying and selling. Cavana and CarMax are 2 recent examples of how popular this service can be. Have some local places for folks to test drive the vehicles they might be interested, fill out a build sheet if the lot doesn’t have exactly what they want- and if they’re willing to wait. I suppose if you’re shopping a little early before your lease runs out and the build will hit just as your lease is up it would work out.
If this does take off, I’d like to see an ala cart build sheet where I can select individual options that I want. The car makers could still use parts like normal, but tuck wires out of the way that won’t be used.

I think this would be a huge embarrassing failure. If for no other reason than people are impatient. Go to Chevy lot and buy the vehicle you want (ish) and drive off right now… vs filling out a paper or online document or 12, and waiting 60 days. Its sad how many people finance a 5-6-7-10 year loan for an impulse buy.

If people were patient enough to save and buy their vehicle they would save many thousands of dollars. They aren’t. People want instant gratification.

The moment instant “coffee” was a success humanity lost any hope for patience.

I’ve personally seen folks go to buy a very specific vehicle only to come back with a completely different one. Just because it was in stock.

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I always say that is one of the biggest problems with people today along with the me first attitude.

I don’t know about you but I am a big coffee drinker and can’t stand instant coffee or do I know anyone who likes it.

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I did not realize that instant coffee was such a distructive force on society .

The “coffee” itself wasn’t the destructive force. The acceptance of it was a clear sign that the destructive force was winning. Impatience. Anyone who can accept that “coffee” to save a few minutes of proper percolating…

I drink me some coffee. Black. Any roast but I prefer a good medium.

And yes my very own parents drink instant.

I haven’t bought a vehicle from dealer stock since 1986. Since then, all of my vehicles have been special-ordered.

+1
I always pay cash… unless they are running a zero-percent financing deal.

It seems that the difference is direct deals between the factory and the customer. If it fails, it will be because dealers want a cut. If Ford sends money to dealers to keep them in line, then it might work. What is the incentive for a dealer to service warranty claims if there is no up front money in sales? They make little enough as it is on warranty work, giving dealers another reason to rebel. Since many dealerships carry several makes, this would put Ford farther down in priority if the dealer can’t make a few hundred bucks on average in new car sales.

Surprisingly, the Ford dealer here has a packed lot. The Chevy/Buick dealer next door along with the adjacent Toyota dealer and Honda a mile down the road are mostly gutted. Went by the Honda place today actually. 8 cars on the lot.

I have to wonder about the state of the dealers if FOMOCO goes to something like a Carvana model.
That would be cutting the feet out from under the dealers and no dealer is going to make much money performing warranty repairs on a car they did not sell.
Sales, parts, service are all going to suffer. Dealers would dwindle is the way I see it and Ford owners would be like Fiat owners. Want warranty repairs? 200 miles that way…

I doubt this would ‘stick’, once factories can produce at full rate SOMEBODY’s going to fill up their lots, offer discounts, I’d be reluctant to ‘order and wait’ just to get a Ford.

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I cannot imagine buying a car without a test drive.
Last car a few rest drives of options, 2 ruled out.

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I agree. You can test drive a car that is like the one you actually want, then place an order. When it comes in, you test drive the one you ordered to make sure there are no problems, then you pay for it.

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That’s what my family has done with several purchases, maybe not the right trim level or color at the dealer but it’s helped seal the deal. The last car we custom ordered was the '88 Grand Voyager because the small town dealer that had been so helpful only had a weeks supply of vans at best so once Dad figured out exactly what they wanted they put in an order and it maybe took 2mo to arrive Since then it’s been incoming units that were the right trim level and color.