SHOW OR NOSHOW

[CUGOTIT]

We are haveing a Mustang show in a county where there is 3 Ford dealers. We had two dealers sponser our trophies right from the start, provided they could display 2 Mustangs/Saleens. We were very excited about this. The third dealer, we asked if he would sponser and he said he would, but the other two dealers could not bring cars to the show, only his dealership could He then called Ford Marketing and told them what the other dealers were planning to do. Ford Marketing called the other dealers and told them they could not bring cars to the show. I was under the impression that the Ford dealers were independent of Ford and could do what they want, ie outrageous ADMs, and Ford had no control what so ever. We are a fairly large Mustang club and put on the biggest car show on in the area. This show draws about 1-2000 people in from surrounding states and Canada. Our club and show represents our whole county, not just parts of it. We feel that all of our counties Ford dealers should be represented at the show, not just one. My burning question here is, If Ford has no control over the dealerships, how can they dictate over territory, especially over something as insignificant as a Mustang show. I would like some input from Ford management on this matter so I can explain it to the members of our club. It just seems to me that these dealerships can't play together nicely and need to be put in "time out".

[Former Ford ZM]

It depends on how the territory is "divided" up. Dealers are granted Primary Market Areas when they are issued sales and service agreements. These PMAs are defined by zip code. If it is a single point market, meaning one dealer is assigned the PMA than they have exclusive advertising rights to that area as well as share responsibility. Another dealer cannot aggressively advertise in that market area through billboards, car displays, anything that would physically come onto their PMA. If it is a Multi-Point market, like major metro areas, than the dealership has a percentage of share of the PMA and can have multiple dealers advertising directly into this market.

 

Sounds like these are Single Point dealers and one dealer didn't want to share his territory. This isn't something that Ford actively police, but like you mentioned, all it takes is a call to regional management and the other dealers can be told to go home. In the sales and service agreements each dealers PMA is specifically written out. They are held to certain market share objectives, and despite the decreases in sales, it takes forever and multiple acts of congress to actually terminate a dealership. There are no contractual agreements on pricing in the agreement.

 

Notice the absent of the word "franchise." Dealers are a whole different legal animal and years and years of litigation have created what we have now.

[wrwalke]

Try talking to the dealer principal or dealership general manager of dealership #3 directly. If you calmly explain that your club spans PMAs and sales territories, and includes lots of "car talk and dealership gossip" among members, they might want to play nice and cooperate with the other dealerships. One compromise might be to remove or block the window sticker, or forbid "sales" activities at the show for all the dealerships.

 

Odds are that the actions were taken by a sales manager at dealership #3, and not the GM or principal, who *should* have a better big picture marketing view rather than a tactical immediate sales view.

 

bill.