By on March 12, 2020

Ford’s plan to rein in costs and grow profit (well, create it, to be more accurate) in the European market will see the automaker shed dealers en masse.

Figuring those who really want to test drive a vehicle will be willing to go the distance to do it, Ford’s dealer cull coincides with the release of an online sales platform. That platform rolls out alongside the first model offered through it: the electric Mustang Mach-E.

The automaker’s planned dealer ditching is said to be most severe in the UK, a particularly troubled market for the Blue Oval. One industry newsletter estimated some 180 of the country’s 400 dealers could fall by the wayside. Ford of Europe President Stuart Rowley didn’t cite specifics when speaking with Automotive News Europe.

“It will be appropriate for the market,” he said of the cuts, adding that shedding costs in the area of distribution is key to returning to profitability.

“There is obviously a lot of cost wrapped up in the distribution network and that ends up in the price of the vehicle or coming out of profit,” Rowley said. “We want to make the network more efficient.”

Last year, Ford reported a pre-tax loss of $44 million in the region — a significant improvement over the previous year, despite sales and revenues coming in lower. The automaker said the decline “in Europe’s top line metrics is an outcome of our redesign and portfolio shift as we exit low-margin businesses and refocus our portfolio on
higher-growth and higher-return opportunities.”

In Ford’s mind, fewer dealers does not equal fewer models sold. The online sales system arriving later this year will fill the gap in service left by departing dealers, though the company estimates 90 percent of Britain’s population will still reside within 30 minutes of a Ford dealer.

“Customers want to be able to order their vehicle online. They want to pay for it online. They want a single interface,” Rowley said. They also want convenient servicing, which is why Ford plans to convert some dealers into service-only centers. Others will focus entirely on selling the Transit family of commercial and passenger vans — a fresh product lineup with much growth potential in the region.

[Image: Ford]

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16 Comments on “Ford’s European Future: Far Fewer Dealers, More Online Sales...”


  • avatar
    SCE to AUX

    “There is obviously a lot of cost wrapped up in the distribution network and that ends up in the price of the vehicle or coming out of profit,” Rowley said. “We want to make the network more efficient.”

    Don’t utter those words in Michigan. The Tesla direct sales model isn’t very popular there.

  • avatar
    cprescott

    I think a direct sales model would be okay, but I’d never buy a vehicle before driving it and seeing how it is once you sit in it. These days the interior sight lines are horrific in cars – while my last car was bought from CarMax (at a very reasonable and competitive price to my surprise), I had a car transferred for free from another Carmax over an hour away. I made sure to drive the vehicle to see if I liked it. I would never buy a vehicle without driving it first – and there is the rub with direct sales – not only do you have to drive something like the one you bought, but you don’t know if the one they are going to sell you is full of fleas and rattles that doesn’t match the “test drive” one.

    I personally don’t see the point of random dealers – if I am sold on the brand, let me buy it from the brand’s representative and cut out the dead weight of the independent dealer.

    • 0 avatar
      SCE to AUX

      “I would never buy a vehicle without driving it first”

      Agreed, and this was a personal stipulation I had when I reserved a Model 3. I finally got to test drive one before my number came up, and I decided to pass in favor of a Hyundai 2 months later.

      • 0 avatar
        highdesertcat

        When I was in the US military stationed overseas, we could order a vehicle while overseas and take delivery wherever we landed.

        I did that twice, a ’68 Mercury (delivered in LAX) and a ’76 Toronado (delivered in Antwerpen, Belgium). I also ordered a 1973 Mercedes 220D for delivery at Schiphol, The Netherlands, for use while there (it was actually for my dad and mom who were going to tour Europe for a couple of years while I was stationed in Germany.)

        All three times it worked just fine for me and a pre-buy test-drive was just redundant.

  • avatar
    johnnyz

    In the land of the free and the home of the brave we are encumbered by antiquated laws, pointless taxes and useless protected industries.

    it took forever to allow people to brew their own beer. Hell, you can’t even grow your own weed!

    Dinosaurs must Fall, and fall they will! Sadly, it may take an economic depression or worse to change our coluded ways.

    Here in the shyt state of MN the wheelage tax was recently reintroduced in several counties. Why the hell do you need a tax to have a wheel? Minneaotastan will see a mass Exodus – much like other high-tax States have. Perhaps not in my lifetime.

    What does that have to do with Ford in Europe? Protected distribution networks.

  • avatar
    ToolGuy

    Will the online sales system be open nights and weekends? Oh – nevermind.

  • avatar
    Jeff S

    I would rather buy a vehicle online as long as I am able to try it out first. At least I could pick my own color and have a choice of trim lines even if they are more limited. Living in a cold climate I would option a block heater but otherwise I would be satisfied with most of the features offered in most trims. I would say that have a 24 7 site to order a vehicle would be very doable.

    • 0 avatar
      spookiness

      My fantasy dealer experence involves going to a “dealership” or “store” where I can see and test drive representative samples of each make, model, and trim level. Then, see paint samples, interior swatches, etc. and make selections- which should be vastly more extensive that the 3 shades of gray that are typically offered today. Then financial details are completed, the online order is placed, and my new vehicle is delivered to me at said retail outlet or my residence in 3 to 4 weeks.

      • 0 avatar
        Robotdawn

        This spookiness. Why is this not how it is done? I might be trying to order a car for the first time because it is apparently against some unwritten law for our nearest GMC dealers to have blue vehicles in stock. That’s what the wife wants, but I’ll be honest I expect them to try to hose me.

    • 0 avatar
      Steve203

      >>I would rather buy a vehicle online as long as I am able to try it out first. <<

      And that has been a major problem for all retailers. People come in demand product be demonstrated, pump the salesman for information, then walk out and buy it on line because it's a teeny bit cheaper.

      If people don't buy at the dealer, the dealer will not be there anymore. No more free demonstrations. No more free information. No more after the sale support.

  • avatar
    Jeff S

    Would you buy a new vehicle without driving it? The manufacturers should at least have access to a vehicle for demo. Buying a new vehicle is not like buying a coffee maker, much much more expensive.

  • avatar

    owning distribution has been the manufacturers’ goal for many years.

    they tried owning physical stores, epic fail.

    with the internet, it’s closer to reality.

  • avatar
    namesakeone

    When your Focus’s or Fiesta’s automatic transaxle implodes, can you have warranty work on the car done online also? Does someone come through the computer with a set of socket wrenches?

  • avatar
    Jeff S

    We might eventually see Chinese made vehicles sold at Walmart. Go to Walmart.com and make your selection and select your method of payment.

  • avatar
    bd2

    Honda in Australia is also looking to cut dealer count.

    But aside from Tesla (and possibly for upcoming EV brands), the online sales/distribution model hasn’t yet gained traction for traditional auto-makers. as buyers still like to be able to see and pick and choose among numerous options (color, trims, etc.).

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