The CEO thinks direct sales are the way of the future
The company’s dealership network would still be used but in a different way
This comes after many dealers have been reprimanded for marking up new cars to cash in on the pandemic and its effects
At a recent conference, Jim Farley, the CEO of the Ford Motor Company, said that he believes his company should adopt a direct sales model, similar to Tesla’s.
This is an idea that has been floated by many automakers before, but Ford seems more serious than most on this topic.
According to the CEO, direct sales, where the automaker sells cars directly to consumers without having to go through a dealership, is the way to go for the automotive industry.
In his vision, Farley sees modifications not only to the sales process but also to the vehicle’s delivery to the buyer.
Despite him not mentioning Tesla, it is pretty clear Ford’s CEO wants to emulate what the EV company has been doing since it arrived on the market.
Indeed, Tesla is the only automaker to not have traditional dealerships that buy the cars from the manufacturer before selling them to customers, preferring to keep control over the whole process.
Unlike Tesla, however, Ford currently has a large dealer network that can sometimes hinder the company, but it can also offer many advantages, notably the ease of service when something goes wrong with the vehicles.
Ford’s CEO is aware of this and his vision doesn’t call for an elimination of the dealerships, but rather a transformation. According to him, existing dealerships will be able to serve customers better than the centralized Service Center model employed by Tesla. To prove his point, he said this could allow customers to rent different vehicles for a period of time, so a Mustang driver could rent a truck to tow something or a truck driver could rent a Mustang for the weekend, for example.
This would be beneficial for the company by making it easier to manage inventories and not having to manage a dealer body that can sometimes get out of hand, as was proven by the massive markups some dealerships imposed on new models in the last two years.
In addition, it could be beneficial for the customer as well since this model calls for fixed pricing, meaning that the advertised price is what you pay, without having to negotiate a better deal or risk getting scammed by unscrupulous salespeople.
The automaker has not confirmed it will transition to this new business model, but since the CEO seems fairly passionate about the subject, it remains a possibility.