Image: Ford

Ford fans may not have to visit a dealership to purchase one of the motor company’s electric vehicles in the coming future. Speaking at a conference in New York on Wednesday, Ford CEO Jim Farley revealed that he wants the company’s EVs to be sold online-only, allowing customers to avoid the usual inconveniences that come with the car-buying process, such as dealer markups and/or price negotiations. Selling vehicles directly to consumers is something that Tesla pioneered, but Ford and other traditional manufacturers have been prohibited from doing something similar due to state laws driven by fears over vertical integration. Ford currently advertises eight EVs on its website, including the 2022 F-150 Lightning and 2022 Mustang Mach-E.

“We’ve got to go to nonnegotiated price,” Farley said. ” We’ve got to go to 100% online. There’s no inventory (at dealerships), it goes directly to the customer. And 100% remote pickup and delivery,” he said in New York during Bernstein’s 38th Annual Strategic Decisions Conference streamed live.”

“Then we have this opportunity to use our physical presence to outperform competitors,” he added. “I think our dealers can do it. But the standards are going to be brutal. They’re going to be very different than they are today.”

Ford CEO Jim Farley said Wednesday consumers should plan to see dramatic change in the near term as companies compete amid the shift to battery-operated vehicles.

He teased that the company sees potentially huge profits in building an electric vehicle for ride-hailing services Lyft and Uber.

Meanwhile, the way car companies generate revenue may change, too — like renting cars for limited use and allowing customers to pay per mile or per day, Farley said.

Source: Detroit Free Press (Alternate Link) (via Ars Technica)

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26 comments

  1. "He teased that the company sees potentially huge profits in building an electric vehicle for ride-hailing services Lyft and Uber.

    Meanwhile, the way car companies generate revenue may change, too — like renting cars for limited use and allowing customers to pay per mile or per day, Farley said."

    You will own nothing...
  2. "He teased that the company sees potentially huge profits in building an electric vehicle for ride-hailing services Lyft and Uber.

    Meanwhile, the way car companies generate revenue may change, too — like renting cars for limited use and allowing customers to pay per mile or per day, Farley said."

    You will own nothing...
    Yea I don't want to rent my car... Well... unless 1. the price is reasonable. And 2. The rent covers all incidentals and lets me swap cars on a cadence I like.

    For instance there are places in Dallas where you can rent a Lexus... it covers all incidentals other than gas and includes automotive insurance. you can swap vehicles within a range once every 3 months. But the cost is high per month if I remember correctly close to 1k.
  3. Yeah I'm like Grimalkin. I'm not opposed to it, it just needs to make sense.

    The deal Volvo had for a car subscription had me thinking about it for a while - at the time, it was $600/mo - that got you a new XC60 (mid-sized SUV), you trade it up every 2 years for the latest model, and that included all maintenance ~and~ insurance. $700 got you the high-end trim XC60 or a entry level XC90 (third row SUV)

    I don't know what it costs now, the pandemic has kinda upended things - they still have the program but it's limited to stock-on-hand at dealerships, and the cost will vary based on how high up the model you want is.

    For a daily driver that I want to stay in good shape and do moderate commuting in, say the typical 10-12k miles/yr - that isn't all that bad. For something like a ranch truck, that wouldn't make much sense at all. If I lose my work truck for whatever reason, I may go back and look at it again.

    I don't own my work truck - work does. They usually make me trade them in when I hit 150k miles, even if it's still in good shape. I tend to get a new truck there about every 5 years, but I don't really get any say in them, and they have the company logo on it. But they usually get me a decent truck (XLT-level Fords lately), pay all my fuel, maintenance, insurance, and are very reasonable about letting me use it for personal use. So I don't complain too much.

    Personal cars, I've owned all of mine for around 9-10 years. I get them brand new, and keep them long enough the depreciation hit isn't staggeringly awful. I know exactly how the car was maintained, I have warranty service early on for any glitches, and they get taken care of and are reliable and run very well even when I ultimately sell them.
  4. We don't really sell much at our Ford/Lincoln dealership off the lot at the moment. We have a market adjustment on them due to those certain vehicles not being able to be replaced anytime soon. It is not adhered to very much to local customers. We have started more on the ordering side, but the order banks have been closed on numerous vehicles at the moment such as the F150, Maverick, Bronco, Super Duty, and Escape Hybrid due to either chip or parts shortage. They may reopen in late summer or fall. Hopefully sooner than later.
  5. Good.

    Kill all dealerships.

    They are the worst.

    The direct to consumer model is the future.

    Kill the middleman, and any goddamn protectionist laws favoring said middlemen.

    If I never have to set foot in a goddamn dealership ever again, it will be a blessing.
  6. Good.

    Kill all dealerships.

    They are the worst.

    The direct to consumer model is the future.

    Kill the middleman, and any goddamn protectionist laws favoring said middlemen.

    If I never have to set foot in a goddamn dealership ever again, it will be a blessing.
    Well other than used car dealerships.
  7. Well other than used car dealerships.

    Yeah.

    Don't get me wrong. They are sleazy too, but they are kind of unavoidable, unless you want to do all of your transactions owner to owner.
  8. As long as there are still places I can go test drive vehicles I'm ok with moving to online sales.

    This also means there is no more haggling. You won't get extended warranties or other accessories thrown in. No negotiating on price. And if you think the manufacturers are going to lower their pricing you smokin that good good. We'll be paying dealership pricing direct to the manufacturers. Probably higher since they'll now have to employ all the people at the delivery centers.
  9. Back in 2015 I ended up doing some closed marketing thing with Ford awhile back where they asked me and some other random Ford customers if we would be amenable to a subscription type service where you'd pay some monthly fee similar to that of an existing car payment but we'd have the option to switch vehicles out on request.

    Basically, drive a Fusion or something during the week, a Mustang on the weekend and then go with a truck if you need to haul something. It's a nice idea, but one of the concerns I had was the lag time to get the truck on a day when you needed it. They had a few different ideas on how to structure the program.

    The point is, Ford's been considering the subscription vehicle system for quite some time and they've been doing marketing research on it for the better part of a decade.
  10. Don't get me wrong. They are sleazy too, but they are kind of unavoidable, unless you want to do all of your transactions owner to owner.

    Good.

    Kill all dealerships.

    They are the worst.

    The direct to consumer model is the future.

    Kill the middleman, and any goddamn protectionist laws favoring said middlemen.

    If I never have to set foot in a goddamn dealership ever again, it will be a blessing.
    I am a car salesman in a car dealership, so I take some offense to these statements. It sounds like you have had a bad experience(s) in some dealerships, and I can respect that. Not everyone in the profession is sleazy and out for themselves. I've only been in this line of work for around 8 years, and I actually make an honest living selling vehicles to repeat customers, and their referrals. I'm the guy that if you are looking at a car just because it's in your budget and I wouldn't drive it myself or recommend it to a relative/friend I'll tell you that.
    Back on topic. Ford is leaning towards the ordering process, and I have helped my customers with that process which is exciting to see someone get everything they want in the color they want.
    Sorry for the rant, but I just dislike the generalization of all car salesmen and dealerships being alike.
  11. I am a car salesman in a car dealership, so I take some offense to these statements. It sounds like you have had a bad experience(s) in some dealerships, and I can respect that. Not everyone in the profession is sleazy and out for themselves. I've only been in this line of work for around 8 years, and I actually make an honest living selling vehicles to repeat customers, and their referrals. I'm the guy that if you are looking at a car just because it's in your budget and I wouldn't drive it myself or recommend it to a relative/friend I'll tell you that.
    Back on topic. Ford is leaning towards the ordering process, and I have helped my customers with that process which is exciting to see someone get everything they want in the color they want.
    Sorry for the rant, but I just dislike the generalization of all car salesmen and dealerships being alike.

    For me, it's not sleazy sales people. It's the shady dealers. It's the ridiculous amount of time I spend at a dealer dealing with sales people that can't make decisions. I know what I want when I arrive at a dealer. I know they are there to make money, and I am there to spend it. But, dang it, I don't want to spend 4 hours talking with someone that constantly has to say "let me go ask my sales manager" and leaves me sitting there for 20 minutes. If you (not you specifically) are not the one I need to be talking to to make the deal then get that person over to the table and stop wasting my time. MY time is money, and the longer the dealer wastes it the less I am inclined to spend it.

    I do like the idea of ordering vehicles. I've ordered 2 in the past. Yes, you do get exactly what you want. Where I have issue with this is the wait. 3-6 months for the build, and realistically, right now, it's more like 6-12 months. That's cool if you can wait that long. Most people cannot. Which is where reverting from independent dealers to manufacturer delivery centers would be useful. If the vehicle you want already exists somewhere it should be as easy as having that vehicle transported to you. Instead we play the b.s. game of one dealer trying to make a trade with another dealer to get that vehicle, and rats don't always like dealing with other rats. Like when I bought my Rubicon. There were 2 in the country spec'd how we wanted it. One in Dallas, one in D.C. Our dealer said they secured a trade for the one in D.C. We gave them a deposit, and they lead us on for 2 weeks. I finally called the dealer in D.C. to ask what the issue was and they tell us they were never going to trade that Wrangler since it was a special order for the limited production color we wanted. RATS. So, I had 2 choices, order a new one or drive to D.C. or Dallas and buy one. I wound up having to drive to D.C. which wasted more of my time because dealers are RATS.

    Now, if these were just delivery centers I could have bought that Rubicon and had it delivered to me, no issues, no negotiating, no b.s., no lies.

    I get it. There are some good, honest sales people. But it's the dealers as a whole that are shady pieces of crap.
  12. Everyone here realizes that if it's manufacturer delivered they won't just keep stock in vehicles right? That is one of the biggest sunken costs to car sales. Fleets of unsold cars parked.
  13. I have a great sales guy at my local dealer. No BS, he takes care of me. If I want to look at test stuff he makes it happen, he answers questions, and he isn’t afraid to say he doesn’t know something. When I’m ready to buy we are done in 15 minutes.

    Maybe I’m getting taken for a ride every time I buy from him, but I don’t feel like it.

    Form the stereotypical used car salesman pushing the undercoat, yeah, online sales would be a step up. From the guy I know, I would rather call him on the phone knowing he will give me a straight answer and take care of me than fumble around on my own.
  14. I have a great sales guy at my local dealer. No BS, he takes care of me. If I want to look at test stuff he makes it happen, he answers questions, and he isn’t afraid to say he doesn’t know something. When I’m ready to buy we are done in 15 minutes.

    Maybe I’m getting taken for a ride every time I buy from him, but I don’t feel like it.

    Form the stereotypical used car salesman pushing the undercoat, yeah, online sales would be a step up. From the guy I know, I would rather call him on the phone knowing he will give me a straight answer and take care of me than fumble around on my own.

    Yea do we REALLY want to be calling overseas to buy a car? "I want information on the ford Fusion XL Hybrid." "You would need mail on ford fusion yes?" "No just the hybrid" "What model is hybrid?" "The Ford Fusion XL" "Ford Fusion yes." "You know what... neve mind." "Thank you have a nice day."
  15. For me, it's not sleazy sales people. It's the shady dealers. It's the ridiculous amount of time I spend at a dealer dealing with sales people that can't make decisions. I know what I want when I arrive at a dealer. I know they are there to make money, and I am there to spend it. But, dang it, I don't want to spend 4 hours talking with someone that constantly has to say "let me go ask my sales manager" and leaves me sitting there for 20 minutes. If you (not you specifically) are not the one I need to be talking to to make the deal then get that person over to the table and stop wasting my time. MY time is money, and the longer the dealer wastes it the less I am inclined to spend it.

    I do like the idea of ordering vehicles. I've ordered 2 in the past. Yes, you do get exactly what you want. Where I have issue with this is the wait. 3-6 months for the build, and realistically, right now, it's more like 6-12 months. That's cool if you can wait that long. Most people cannot. Which is where reverting from independent dealers to manufacturer delivery centers would be useful. If the vehicle you want already exists somewhere it should be as easy as having that vehicle transported to you. Instead we play the b.s. game of one dealer trying to make a trade with another dealer to get that vehicle, and rats don't always like dealing with other rats. Like when I bought my Rubicon. There were 2 in the country spec'd how we wanted it. One in Dallas, one in D.C. Our dealer said they secured a trade for the one in D.C. We gave them a deposit, and they lead us on for 2 weeks. I finally called the dealer in D.C. to ask what the issue was and they tell us they were never going to trade that Wrangler since it was a special order for the limited production color we wanted. RATS. So, I had 2 choices, order a new one or drive to D.C. or Dallas and buy one. I wound up having to drive to D.C. which wasted more of my time because dealers are RATS.

    Now, if these were just delivery centers I could have bought that Rubicon and had it delivered to me, no issues, no negotiating, no b.s., no lies.

    I get it. There are some good, honest sales people. But it's the dealers as a whole that are shady pieces of crap.

    This.

    Sales people would not go away if dealerships go away. Nor would service centers. All of these job functions would still need to be fulfilled. But they would change.

    I've never understood why having dealer lots full of cars is a thing. When I grew up in Europe we just didn't have this. There were showrooms where you could go and test drive a car, and then order one from the factory exactly the way you want it, and then wait a few weeks for it to be delivered.

    Absolutely no one walked onto a dealership lot and walked off the same day with a car. This just wasn't thing. I always wondered why that happens here. Is it our American impatience that drives this phenomenon? If I were buying a new car, I'd rather wait a few weeks for delivery, ordered from the factory EXACTLY the way I want it, rather than just take whatever car the local dealership had on the lot that may or may not meet my exact desires.

    Then there is also the haggling aspect. It drives me absolutely nuts. People think that if we move to a model of fixed pricing they are going to get worse deals, as if they are all some sort of super negotiators able to twist the poor sales guy into agreeing to something they don't want to. For something like 99.99% of people this is not the case. Remember, the sales people and their dealership managers do this all day long every day. It is their profession. You come in and buy a new car at most once every few years. It is a system set up to benefit the middleman.

    We get to see the MSRP's (which mean absolutely nothing, by the way) and think we can intelligently use them to get ourselves a good deal, but this process of MSRP's and haggling exists for one reason only, to create uncertainty about the real pricing, and to line the dealership owners pockets with as much of your money as possible.

    Middlemen are always bad. Sometimes they are a necessary evil, but in the car buying process they are not. They are just adding another mouth to feed in the car buying process.

    Ideally independent new car dealerships would go the way of the dodo, and be replaced with manufacturer owned showrooms and service centers, which:
    1.) Have fixed pricing. No more "lets make a deal" Everyone pays the same for the same features, just like any other retail establishment. if you don't like the price, go buy another brand of car.
    2.) No commissions. Commissions are the devil and drive bad salesperson behavior.
    3.) No inventory. Buyers test drive sample cars, fill out a form with their desired features, and pay a down payment. Car gets delivered for pickup a few weeks later. A car doesn't get manufactured in the factory until a customer has ordered it. This will enable greater focus on "just in time" manufacturing and replace many wastes in the system, like having to - after the fact - discount off unpopular models, etc.

    I am a car salesman in a car dealership, so I take some offense to these statements. It sounds like you have had a bad experience(s) in some dealerships, and I can respect that. Not everyone in the profession is sleazy and out for themselves. I've only been in this line of work for around 8 years, and I actually make an honest living selling vehicles to repeat customers, and their referrals. I'm the guy that if you are looking at a car just because it's in your budget and I wouldn't drive it myself or recommend it to a relative/friend I'll tell you that.

    No offense intended to you, but it should come as no surprise that the overwhelming majority of consumers would rather have a prostate exam than have to sit there negotiating price with a dealership salesman who tries every trick in the book to extract more money from them, and has to "go check with the manager" every few minutes.

    It's not your fault as a salesman that this is the process. It is the system that is set up that way. Wouldn't you rather work in a system that the consumer actually likes that is transparent about pricing and helps the customer get the car they actually want, not whatever happens to be on the lot?

    Instead the salesperson could focus on being a product expert, that can show the customer the different models and features and walk them through the ordering process, paid a fixed annual income in an organization that uses the industry best practice for professionals, giving those who perform better better raises at their annual reviews, instead of sales commissions which just result in ruthlessly competitive environments and drive poor customer service.
  16. I've never understood why having dealer lots full of cars is a thing.
    Part of it are state laws - some states have laws that prevent car manufacturers from selling direct - they must go through a third party dealer.

    Manufacturers tend to like dealers because they act as insulation to the customer. They are more in tune with local tastes and customs, and they can handle things like recalls and parts inventory and such. It's worked out well for dealers and manufacturers.

    But I share your opinion, it doesn't tend to work out well for the customers. You can't get directly in touch with anyone at the factory if there is a problem or if you just have questions. The dealers do exist to mark up ~everything~, and they have every incentive to not stock what you want - just what they think they can get you to buy. Some dealers do ok, I am painting with a broad brush and not all of it is deserved -- I happened to find a good sales guy at my dealer, but I have no doubt that if I didn't have ~that guy~ that any of the other sales guys would not hesitate to push the undercoat and 25% dealer markups my way each and every time -- after they go to "talk to the manager" (the worst kept secret in sales tactics) about each and every little point I bring up.
  17. No offense intended to you, but it should come as no surprise that the overwhelming majority of consumers would rather have a prostate exam than have to sit there negotiating price with a dealership salesman who tries every trick in the book to extract more money from them, and has to "go check with the manager" every few minutes.

    It's not your fault as a salesman that this is the process. It is the system that is set up that way. Wouldn't you rather work in a system that the consumer actually likes that is transparent about pricing and helps the customer get the car they actually want, not whatever happens to be on the lot?

    Instead the salesperson could focus on being a product expert, that can show the customer the different models and features and walk them through the ordering process, paid a fixed annual income in an organization that uses the industry best practice for professionals, giving those who perform better better raises at their annual reviews, instead of sales commissions which just result in ruthlessly competitive environments and drive poor customer service.
    No offense taken, and I apologize if I came off like I was upset with you personally. I understand everyone's frustration with some car dealers and salesmen in general. I was in Quality Control for over twenty-two years and bought cars myself during that time, so I know how I wanted things to go when buying a car, and I made sure I applied those things to people out to purchase a vehicle once I changed professions. I absolutely hate going back and forth between the customer and the manager to get a price/response. I plainly ask people what they want to pay, and if there is a trade involved then I simply ask what they are thinking that is worth. Also when purchasing a used car I ask if there is anything that they would like fixed or anything missing that they would like. Of course I can't deliver on everything, but I tell people that it's like asking a girl out. They are either going to say yes or no. Most times we meet in the middle on where they want to be and where I can sell the car at to make both parties happy. I believe people appreciate just being upfront with them more than anything.

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