Ford gets downgraded on rising SUV competition from GM

[akirby]

 

A brand that will sell 115-125,000 units in the U.S. cannot expect very many dealers to commit $$ to build stand alone dealerships, or to spend significant $$ to rebuild/upgrade to whatever Ford has decided is the latest standard. There will presumably be a few exceptions that have the volume to justify such investment, but by and large, the business case isn't there.

 

Volvo, Porsche, Jag/LR to name a few.

 

Not separate dealers, just separate showrooms. And the point is you need that to grow beyond the 125K range (plus new products which we know are also on the way).

[jasonj80]

 

 

Probably. I live in a rural area. The Ford/Lincoln dealer in my town recently changed owners. The new owner has decided not to sell Lincoln vehicles, though they will service them. The nearest Lincoln dealer is now an hour’s drive away.

 

Ford needs to make major changes in how its Ford/Lincoln dealerships operate. They need to look at and say if you live within 75 miles of a Lincoln dealer you can't take a Lincoln to a Ford dealership to have warranty service done, and if you have a Ford you can't take it to a Lincoln dealer to have warranty service done. They need to pull a page from Toyota and VW on how to operate Luxury dealerships. Every VW and Toyota dealership can not work or do service on Lexus/Audi vehicles. However rural dealers are allowed to service them if there is not a Lexus dealer near by. You also can't take a Toyota to a Lexus dealer for service. They also should let all rural dealers that are more than 150 miles from a Lincoln dealer order a Lincoln vehicle, but they can't stock them -- they must be a sold unit when ordered. Ford needs a massive cleanup on the Lincoln side.

[akirby]

Lincoln is doing one better - they'll come pick up your lincoln for service. I think the limit is 50 miles. That will effectively prevent use of Ford dealers.

 

Not sure that's really a problem though. I'm sure some folks have a great Ford dealer but crappy Lincoln dealers and would not like being forced to go to Lincoln.

[jpd80]

Lincoln is doing one better - they'll come pick up your lincoln for service. I think the limit is 50 miles. That will effectively prevent use of Ford dealers.

 

Not sure that's really a problem though. I'm sure some folks have a great Ford dealer but crappy Lincoln dealers and would not like being forced to go to Lincoln.

And you'd think that in ti,e, those substandard dealerships would be forced to change or close down.

I do recall something a few years back where dealers were complaining about Ford/Lincoln insisting

upgrades to dealerships to improve presentation - some were complaining but I think most went along

with what was being requested or insisted upon.

[Harley Lover]

 

Volvo, Porsche, Jag/LR to name a few.

 

Not separate dealers, just separate showrooms. And the point is you need that to grow beyond the 125K range (plus new products which we know are also on the way).

 

Apples and oranges. Those brands make much more profit for their dealers than Lincoln can for its dealers. If Lincoln were comparable in profit, more of its dealers would have already invested in upgrades. The business case isn't there, otherwise they would be doing it.

Edited August 10, 2017 by Harley Lover

[tbone]

 

Ford needs to make major changes in how its Ford/Lincoln dealerships operate. They need to look at and say if you live within 75 miles of a Lincoln dealer you can't take a Lincoln to a Ford dealership to have warranty service done, and if you have a Ford you can't take it to a Lincoln dealer to have warranty service done. They need to pull a page from Toyota and VW on how to operate Luxury dealerships. Every VW and Toyota dealership can not work or do service on Lexus/Audi vehicles. However rural dealers are allowed to service them if there is not a Lexus dealer near by. You also can't take a Toyota to a Lexus dealer for service. They also should let all rural dealers that are more than 150 miles from a Lincoln dealer order a Lincoln vehicle, but they can't stock them -- they must be a sold unit when ordered. Ford needs a massive cleanup on the Lincoln side.

Some interesting ideas in here. I like the thought of trying to keep Lincolns and forwards separated to help create/maintain identity.

 

At minimum dealerships should be keeping all of their Lincolns completely separate on the lot from the Ford products. They should be trying to minimize the gussied up ford mantra at all costs.

[SoonerLS]

Ford needs to make major changes in how its Ford/Lincoln dealerships operate. They need to look at and say if you live within 75 miles of a Lincoln dealer you can't take a Lincoln to a Ford dealership to have warranty service done

That kind of artificial restriction just makes no sense from the customer's side, IMHO--if they did that, I certainly wouldn't be buying a new Lincoln ever again. I like my Ford dealer, which is less than ten miles away, but the closest Lincoln store is hell and gone away from me, but well within 75 miles.

[tbone]

 

Apples and oranges. Those brands make much more profit for their dealers than Lincoln can for its dealers. If Lincoln were comparable in profit, more of its dealers would have already invested in upgrades. The business case isn't there, otherwise they would be doing it.

Isn't this kind of a self for fulfilling prophecy? Lincoln products are definitely getting better so if they continue to be blended into a Ford store how do you take them to the next level from a luxury mark standpoint? Sometimes yet to invest money to make money. Perhaps you get those better transaction prices if your dealership experience is top rated.

[jasonj80]

That kind of artificial restriction just makes no sense from the customer's side, IMHO--if they did that, I certainly wouldn't be buying a new Lincoln ever again. I like my Ford dealer, which is less than ten miles away, but the closest Lincoln store is hell and gone away from me, but well within 75 miles.

It is because you're trying to create an image for Lincoln. Lincoln dealers MUST be an experience to the buyer, that is what a huge part of a Luxury car is and even bigger for Lincoln as its planed place in the Luxury market is understated Luxury. The problem with allowing them to go to Ford dealers for warranty work is that they don't get that experience, and that can and very likely will impact their next vehicle purchase. So they look when they go in and they get an okay experience when their car is in for repair. They don't get a Lincoln loaner, they get an Enterprise special so they don't get to see how the brand is progressing. Also Lincoln having loaners gives dealers slightly used cars to sell. Oh I'm sorry that payment is a little high, over here we have a loaner that is just slightly used but we can get it to you at your price point. (Once again this is how the German/Japanese operate) That vehicle buyer next time walks into a a different brands showroom and goes wow this is really nice (subconsciously) while thinking my Lincoln dealer doesn't look anything like this -- which isn't the Lincoln dealer they are thinking of, its the Ford dealer where they had service.

 

If it means losing a few customers in the short term so be it. What's even worse is people that take their Ford cars to Lincoln dealerships, they basically get to use those better amenities and are driving a vehicle that is 20K-80K less.

 

Once again this would only be for warranty work, if someone wants to pay for repairs they could take their vehicle anywhere they want.

[akirby]

I disagree. I think a Lincoln owner who chooses to take their vehicle to a Ford dealer understands the difference and would not expect a luxury experience in the first place. They're trading that (knowingly) for a presumably better or more convenient service experience. If they were forced to go to a bad Lincoln dealer they might not buy one at all.

 

What it would do is guarantee the Lincoln dealers more service business (which I would presume was the reason Lexus did it in the first place).

[meyeste]

https://www.cnbc.com/2017/08/04/ford-gets-downgraded-on-rising-suv-competition-from-gm.html

 

 

 

More at link

 

In my opinion Ford is now a value buy (if a bit speculative) and I am buying, one reason is the dividend is strong (getting dividends always puts a smile on my face); However i think this cnbc review is shortsighted (or quite timely for investors such as myself). Currently there is no question GM absolutely rules the large SUV market however the Expedition sales improved dramatically after Ford put the 3.5 EB for a while it was about matching Tahoe sales numbers, even though the interior was simply not up to par. On the other hand, the IRS in the Expedition is remarkably better than the live-axle in the GM utes. With the new redesign of the Expedition/Navigator Ford has corrected the interior issues. I personally think the current Expedition looks good and has aged well, however the appearance of the new model is far more upscale and I think that is going to get it noticed. Now I hope Ford was able to improve mpgs because I believe mpg's are a significant decision maker - especially when all else is close. Finally I hear Ford has been listening to those people that say "but I want a V8" and the OHC 7.0L will make it into upper-trim Expeditions & F150's, frankly I think this is a fantastic idea because luxury is about excess and 7.0L DOHC says "exxxccccesssss" like no puny 6.2L OHV engine ever could.

 

What are the risks; poor execution of course though Ford generally executes very well. most significant are dealer-client relationships. In all honesty the Expedition and Tahoe are both good vehicles so the experience at POS is important. In that respect I give GM dealers credit, I donated my last GM car 4 years ago (what other option did I have), and while at one time I disliked going to the GM dealer, that changed. After their bankruptcy the people at the GM dealer finally seemed to at least act like they cared about me as an owner; they seemed to have gained humility from the embarrassment of bankruptcy. From that perspective at least compared to my Ford dealer GM had Ford beat when it comes to customer relationship, it seemed like taking my F150 in to Sheehy meant a minimum $600 charge, on the other hand the GM dealer consistently fixed the Oldsmobile for considerably less. I rebuilt a 68' stang and worked on many a car so I have an idea what appropriate work is, let's just say my Ford dealer always seemed to find more wrong with my truck than I estimated, in contrast the Chevy dealer's findings usually matched my own. I don't take my truck to that Ford dealer anymore, however if I had a GM I'd still take it back to the Chevy dealer.

 

I wouldn't by a GM truck today because frankly I think they not on par with a Ford ( body won't ever rust means a lot to me, as does Ford's leadership in engine design), if they were the reason above might just get me to the Chevy dealer vs. the Ford dealer.

Edited August 11, 2017 by meyeste

[jpd80]

You bring up a good point about Ford truck bodies not being subjected to rust anymore

and living is a warm climate, I can't imagine how important that s in areas where the roads

often get treated with salt or other corrosive materials in the winter time.

 

I just wish that the next Explorer was also going aluminum body, that would reall upset the apple cart over at GM..

Edited August 12, 2017 by jpd80