Ford Dealership Cull. It Ain't Over Yet.

Cammy Corrigan
by Cammy Corrigan
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ford dealership cull it ain t over yet

Ford is in pretty good shape now and it’s quite clear that they’ll survive, provided they don’t fall under the huge amount of debt they have. But don’t be fooled that things are safe at Ford. Especially if you’re a dealer.

The Day (based in Connecticut) reports that Jim Farley, Ford’s Vice President of global marketing, sales and service, is looking at reducing the United States’ Ford dealer network further. He would like to see it at under 3,000 dealers for the United States. At the end of 2009, Ford had 3,553 dealers in the United States, but now that Mercury is being put to rest, the existing Lincoln/Mercury dealers (about 276) will find it difficult to stay in business without Mercury. “The dealers are full partners in every decision the company makes,” said Mr Farley, “When you are trying to consolidate your network from 6,000 down to 3,000 the dealers are on your side and they will help you participate in the consolidation.” Of course they are on your side, and of course they will help you, Mr Farley! They’ll try to persuade you to close OTHER dealers, just not their own. So, if you own a Ford dealership and think the sky is the limit with Ford’s newfound success, be careful. Ford might not want you to be part of it. Maybe Hyundai has a couple of spare franchises?

Cammy Corrigan
Cammy Corrigan

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  • Findude Findude on Sep 19, 2010

    The local political power of car dealers is easily measured by weighing the portion of the local newspaper that is car ads. Automobile dealerships are the #1 source of revenue for most newspapers, and they are by far the most regular--every day and especially on weekends. The financial dependence of the media (not just print) on car dealers translates into political power.

  • Lw Lw on Sep 19, 2010

    I would like to see Ford run 2 tiers of dealers. Tier 1 - All new Ford product, service and limited high quality used Tier 2 - Wide selection of high quality used and full service for all Ford products I would drive an hour + to test drive a wide selection and pick up a new vehicle, IF I knew that I had a local dealer that provided certified / top notch service. Put the Tier 1 in the prime locations with the population density. Put the Tier 2 on the outskirts. Both tiers should have ample opportunity for good margins / profits.

  • Dave M. Dave M. on Sep 19, 2010
    All in all, less small dealers is better for everyone (well, except for those small dealer and the people who live close to them). Nullo, I have to disagree with you on that one. On my bi-monthly cruise back from Austin I pass 2 shuttered Ford dealers in 150 miles....dealerships that provided small towns with jobs and ranchers with trucks. Sure, the big city is only an hour away....but the mega-dealerships are not the community linchpin a small, especially family-owned dealership is.
    • See 3 previous
    • Colin42 Colin42 on Sep 20, 2010

      Why don't car companies (or large dealers) have virtual showroom? Like Amazon of car buying, supported with local service dealerships. customers could drive demo models at the service dealership and the cars could be built to order (it works for dell!) and delivered directly to the customer

  • Lynn Ellsworth Lynn Ellsworth on Sep 20, 2010
    Toyota has been smart in their dealer strategy. Think demographics. Ford, GM, and Chrysler have been establishing dealers for 100 years. Toyota only 40 years in the U.S. Our population has been shifting. Many midwestern cities and small towns are dying, then the sun belt went wild with growth, but now cites like Phoenix, which was based on just building homes, is shrinking. New comers have the advantage as to where to put their stores.