With the transition to electric cars, many things will change, including how we sell and service them. And this revolution will involve a radical restructuring of the sales networks.
This was stated by Ford’s CEO, Jim Farley, speaking at the 38th annual conference on strategic decisions organized in the US by the analysis giant Bernstein Group. “We want to restructure the sales process – specified Farley – and offer all our electric vehicles online and at a non-negotiable price”, to match Tesla’s profit margins which, as is well known, does not have a dealer structure. . “In the future, the dealers will have no inventory of cars ready for delivery – said the number one of the Blue Oval – and the vehicles will instead be shipped directly to the buyer. We have to go to market at a non-negotiable price. And get directly to the customer. “.
Farley said he expects consolidation among dealers, suppliers and automakers as the industry begins to build more electric vehicles. This is a shift to an online-only model that will pose numerous challenges, because automakers in the United States have limited control over their dealer networks and because dealers are protected by state laws. Unlike Tesla, traditional automakers, including Ford, are prohibited from selling their products directly to customers, a legacy of vertical integration concerns embedded in state laws in the early 20th century.
For this reason, Ford is required to franchise its dealers which will be very different from today’s and their business will change a lot. “According to the Blue Oval, Tesla’s direct-to-consumer sales model has on average a lower cost of $ 2,000 less than what Ford spends through franchising dealers.
The Ford chief also predicts a “price war” for low-mid-range electric cars in the coming years.
Farley expects Chinese manufacturers to gain positions ahead of US players. “There is a jolt coming and I feel the jolt will favor many of the new Chinese brands,” he said without mentioning any companies.
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