Filed under: Car Buying, Ford, Lincoln, Mercury
Ford to meet with dealers about future products, try to close stores
2008 has been a historically woeful year for the auto market, but Ford dealers have been in the crosshairs of a sales decline for over a decade. That brutal reality, along with financial incentives of up to $700,000 or more from the Blue Oval, has lead to the closure of over 500 dealers since mid-2006, and over 150 so far in 2008. To close still more dealers while giving remaining stores a heads-up of future happenings, Ford is embarking on a series of meetings with Ford and Lincoln Mercury dealers. Among the topics of discussion will be future products, product volume and market conditions.
Though Ford isn't stating publicly how many dealerships it wishes to close, the Blue Oval is hoping to have enough departures to make the remaining dealerships healthy. Ford would like to see Ford brand dealers with 1,500 sales per month and Lincoln Mercury dealers with 600 sales per month, which is far higher than what Ford's 3,900 stores are averaging now. To help entice dealers to hang up their plaid sport coats, Ford will be offering cash incentives, but Ford Market Representation Director David Kelleher is hinting that those deals won't last long.
[Source: Automotive News - sub. req'd, Photo by Scott Olson/Getty]
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Reader Comments (Page 1 of 1)
JG 8:01PM (8/27/2008)
I can't believe that any Ford dealer sells 1,500 vehicles per month! They will have to close them all!
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BOB 8:47PM (8/27/2008)
I THINK WE MEAN 1500 PER YEAR == roughly $3 million, if average new/used sale is $20K.
iIF MONTHLY: 1500/30 = 50 cars and trucks per day is a little high, except for megastores, LOL.
Chris: you should be embarassed.
ambientFLIER 8:56PM (8/27/2008)
Lol, I think that's probably the TOTAL amount of fords sold a month...
Albert 8:03PM (8/27/2008)
I worked for a Ford store that closed last year. Ford didn't shut them down, but rather they sold it back to Ford. They weren't honest about closing to all of their employees(myself included). But with my background in the industry I saw the writing on the wall 6 months before it happened and bailed on them. I'm glad they're gone.
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jamie 8:15PM (8/27/2008)
Ford really has to downsize its dealership network. What worked in the 20th century doesn't apply in the 21st century.
Ergo, Ford, Lincoln and Mercury should all be combined into a single network of not more than 3000 dealers (one dealership for every 100,000 citizens).
With 9 or 10 assembly plants pumping out about 3.6 million vehicles annually, then perhaps Ford could sell 1200 vehicles per annum at each dealership.
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Chris 8:53PM (8/27/2008)
hahahaha 1500 sales per month?! The Ford dealer I work for can barely push 40 a month.
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SimbaDogg 9:01PM (8/27/2008)
Word to the wise, if you're an auto mftr that has had slumping sales year after year for quite some time now, it may not be a good idea to have a dealership on every corner as if they were some kind of convenience store.
I coulda told you this was coming 3-4 years ago
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Daniel 9:50PM (8/27/2008)
Ford might want to consider building more desirable vehicles that way they would not have to close their dealerships. Just a thought?
Like is there any law that says the Ford Taurus has to be that bland and boring? It can't have the style of the new Jaguar FX or a Maseratti Quatroporte, or a Lexus or Mercedes?
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robin 11:14PM (8/27/2008)
I don't know of any dealer that sells 1500 new cars a month, American or Japanese, Ford are dreaming, many good dealers only sell 200 new cars a month, I say build and sell desirable and reliable vehicles and you will need every dealer you presently have.
Ford's European dealers thrive because they sell vehicles that people want to buy, They compete with the same German and Japanese manufactures and still do very well, If European Ford can do it why does Ford USA have such a problem.
Finally they have woken up, although its a little late, the new cars Ford intends to sell here should help them a lot, now they need to wise up and give us some desirable commercial vehicles, The Ford Transit is sold all over the world but NOT in America, Most Americans haven't a clue what a Transit van looks like, it comes in many different sizes and configurations, we are stuck with the Old Gas Hog Econoline, Ford, its time to move on, If Mexico can have Transit vans why cant we???
Dont confuse the Transit with the Transit Connect they plan to import soon, they are two different vehicles.
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AZMike 1:22AM (8/28/2008)
robin,
perhaps you can let me know what imported Ford product has EVER sold well in the USA.
let's see...
the English Ford of the 50's?
the beloved Cortina in the 60's?
the Fiesta, that sold like hotcakes in 1978, slid in 1979, and disappeared in 1980?
the Merkur XR4Ti, or the Merkur Scorpio?
the Ford Aspire?
many manufactrers forget that Americans will only buy little teeny cars when they feel they are forced to, and it never lasts for long. they will only put up with the serious constraints a teeny car provides for only so long.
I was driving from Las Vegas to Los Angeles last week, and got stopped on I-15 out in the middle of nowhere because of an accident.
next to me was a 2 door Toyota Yaris. rack on the roof, full of luggage; dad was driving; a 13 year old boy was in the passenger seat; there was a baby in the back with mom. mom gave me the most pathetic look as I went by. the rear seat was about ten inches (if that) from the hatch window, and that space was filled with a rather large package of Pampers.
...and I forgot to mention, the car had Colorado plates. what do you suppose they were getting for fuel economy with that roof rack and a full load, 28 MPG? less?? oh, boy!!
the thing that gets completely forgotten here is that very few (if any) Europeans cover the kind of miles Americans do, whether it's a 75 mile one way commute to work, or a 2,000 mile one way trip for a vacation. a teeny car just doesn't cut it for trips of these lengths.
I'm old enough to have been scared into buying a teeny little car in the past, and it will never happen again. I know better now.
AZMike
Robert 1:25AM (8/28/2008)
Clearly haven't been paying attention. The Transit begins production at Avon Lake sometime in 2010 when Ford merges the E-series and Transit platforms.
Anzollo 2:30AM (8/28/2008)
If Ford would just get some smarts and bring their European lineup to the US their misfortune would begin to turn.
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robin 3:27AM (8/28/2008)
Robert, Thanks for that Info, I reserched it and see you are right, I dont know how I missed that, Even so we have to wait till 2011, thats only another 3 years, Mexico already has this vehicle, I dont see them waiting, They also have other cars including the European Focus, we will have to wait for the next generation Focus.
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robin 5:05AM (8/28/2008)
Az Mike.
Most of the cars you mentioned were built 20- 30- 40 years ago, even the Civic wasn't such a good car back in the 70's, times have changed, I believe these new Fords will be designed in Europe and America, then built in America, Canada or Mexico...
The Ford Aspire was built in Korea by Kia as was the Festiva.
If Americans only buy small cars when they are forced too then what are the Civics and Corolla's? The Japanese have had no problem selling them to Millions of Americans.
Not all European cars are small, many are the same size as the Japanese and German cars we get here today.
With Gas at $4 I doubt we will be seeing cars with 350 and 454 cu in motors as everyday transport, I loved them too but as I said times have changed, we were very wasteful back then.
I've seen people load up Minivan roofs as in your Yaris example, that will always ruin your gas mileage.
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C-Dogg 7:49AM (8/28/2008)
What about those of us who aren't able to fit (literally) into small cars? At 6'6" some of us just aren't cut out for a Civic, Yaris or Corolla. I don't drive a compact (early 90s Maxima) and yet I get very good gas mileage, mid 20s around town and high 20s/low 30s on the interstate. Even fully loaded up with four people and luggage I get around 26/27mpg on the highway. Tell me again why I should get a smaller car?
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Richard Warren 8:05AM (8/28/2008)
The problem isn't the dealers or their number, it's Ford themselves. Wrong products. Pretty simple really.
No dealer tries not to sell vehicles, good dealers actually sell vehicles, not wait for someone to drop in, lay down and buy one.
The typical American management idea of saving money is to cut, sure it saves some money in the start, but does damn little in the long run. Good product, quality, right price point, soild advertising go much further.
What folks forget is, you close dealers, you lose local service, local employment, local dollars flowing through the community and competition. If the local Ford dealer here closed that would mean a 75 mile one way drive to the closest dealer in a metro. What most responders here forget is that there is still a vast rural America that requires coverage as well as the metro areas. Our local Ford store sells about 80 to a 100 new a month and the owner is happy with that and makes a nice living as well as his employees.
Who cares what Ford wants? As a dealer Ford's cost are low, it's the dealer that assumes the cost of the land, building, employees, taxes, parts inventory. Not Ford. So who has the most to lose? Ford or the individual dealer?
If Ford produced the right product the dealers would be just fine.
I always love the 19th 20th century method does not meet 21st century conditions. Really? Seems that at the moment the import nameplates are expanding, using the same methods used as the domestics expanded.
Sales are sales, marketing is marketing, good saleable product sells, the problem with Ford is the product mix, not the dealers or dealer number.
I've been in and around this business a hell of a long time, the dealers big or small who hang in there during down times help you when times get better. Know why? They believe in themselves, the company, the product, their community.
A word of advice to Ford, stop worrying about dealer numbers and start worrrying about product, management, efficency of your organization, warranty quality and mix of product. The dealers will be just fine.
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Martman 12:38PM (8/28/2008)
I live in a small city in western canada 250,000 people. We have:
2 ford dealships, 3 GM and 1 saturn dealerships, 2 Chryslers, plus 1 small town chrysler,ford and GM less than 1 hour from here.
We also have one each of :toyota, honda,acura,bmw,vw/audi, nissan, mazda, MB and mitsubishi.
Too many dealer in my mind all trying to sell in many cases identical products.
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Jake 11:41AM (8/31/2008)
In my area I have 2 Ford dealers literally 15 miles apart, 2 Chevy dealers again 15 miles apart. Then a GMC, Subaru, Nissan, Toyota, Mercedes, Honda, Porsche, Audi, Jeep, VW, Volvo, Kia, Hyundia, Dodge, Chrysler. All except 1 Ford dealer and 1 Chevy Dealer are in the same town, less then 5 mi. apart. Then the other Ford and Chevy dealer are about 15 mi. away but a 1/4 mi apart from each other.
So if you ask me if they closed down 1 of the Ford dealers it would help out the 1 dealer emmensly.
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autoseum.org 4:43PM (9/18/2008)
Did you guys here Mike Manning made history in ny with 22,000 people at his one of a kind George Barris car show Mike Manning is a very talanted perison and i enjoyed his car show.I came from texas and i like to follow george to his car shows and i have to say this is the BEST show out of all
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