Ford abandons plans for fixed-price new-car sales in Europe - SUV VEHICLE

Ford abandons plans for fixed-price new-car sales in Europe

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Ford drops the fixed-price model in Europe, but says it is working on an ‘evolved’ dealer model it plans to roll out by 2030.

Ford Europe has dropped plans for a fixed-price dealership model after evaluating a pilot programme in Holland.

While the car maker has made no official statement regarding the move, UK publication Autocar reports a bulletin has been sent to Ford dealers in Germany confirming the planned ‘agency model’ has been dropped.

The so-called ‘agency model’ would mean Ford head office would own all vehicles at a dealership, with customers buying each car at a fixed price directly from the manufacturer – rather than the traditional franchise dealer structure where the showroom owns its own stock, and can negotiate with customers on the price.

This would include the ability to purchase a Ford online directly from the car maker, with the dealerships acting as agents to prepare the car for delivery, and receiving a set commission from head office for doing so.

In Australia, Honda and Mercedes-Benz have adopted the fixed-price model across their dealership networks – with both companies being forced to face dealers in several court cases.

It makes Ford the latest manufacturer to delay or drop plans for the fixed-price model in Europe, following Stellantis, BMW, Audi and Jaguar Land Rover.

Ford Australia has confirmed it has no plans to adopt the fixed-price model, with Tesla, Honda and Mercedes-Benz among only a handful of car makers to do so locally.

The idea was floated by the US car giant global CEO Jim Farley in 2023 as a way of controlling new vehicle costs for Ford around the world.

The company has faced criticism in the US for dealers charging customers well above Ford’s recommended retail price on popular models such as the Ford Bronco SUV and F-150 Raptor pick-up.

Currently, dealers buy vehicles from Ford and on-sell them, which gives the dealer flexibility to determine the final selling price.

This becomes more important when a customer has a trade-in vehicle, as the potential margins in the sale of the trade-in – in addition to the margin in the new vehicle – are also used to determine the overall cost, often referred to as the ‘changeover’.

Already delayed until 2026 after an initially planned introduction across greater Europe in 2024, Ford’s scrapping of the model will see it pursue an “advanced franchising model” by 2030 instead.

This will still involve bricks-and-mortar dealerships despite Ford Europe planning to reduce the size of its dealer network by an undisclosed amount.

Ford sales and brand boss for electric vehicles in Europe, Anna Lena Strigel, told Autocar, “Here in Europe, we see that most customers are simply not ready to do the complete transaction online.”

“We expected that [shift] to be faster but the reality shows us that customers wished to have a physical interaction for the purchase.”

The post Ford abandons plans for fixed-price new-car sales in Europe appeared first on Drive.

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