Ford CEO Jim Farley spoke on Wednesday, June 1, in New York, at a conference dedicated to the company’s strategy. He announced that the manufacturer was going to completely review the way it distributes its electric cars. The company wants to reduce expenses by carrying out fewer advertising campaigns. Above all, it wants to sell all of its electric vehicles online to deliver them directly to consumers.
“We must be 100% online”
According to Jim Farley, Ford’s current electric car distribution model would cost $2,000 more per vehicle than Tesla’s. A third of this amount is related to inventory management and another third relates to advertising. For the moment, the manufacturer still depends on its car dealers to sell its electric vehicles. The leader would like to follow the direct online sale used by Elon Musk’s company.
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” We must move towards non-negotiable prices. We have to be one hundred percent online. There will be no more inventory at the dealerships, the vehicles will go directly to the customers. All deliveries will be made remotely. said Jim Farley. By moving away from dealerships, Ford could certainly save money, but the implementation of such a strategy would upset the automotive industry to its very foundations.
In today’s environment, Tesla acts as an anomaly compared to other manufacturers. Elon Musk’s company sells its cars online or through its own stores, which means it doesn’t have to rely on dealerships.
Still, laws in some U.S. states have long prohibited automakers like Ford from selling directly to customers, says Ars-Technica. These laws are linked to the fear that manufacturers will replace their service providers to take charge of the value chain of a product themselves, from production to sale. This could leave many companies on the sidelines. The CEO explains that he will continue to involve dealers in the distribution process. He does not go into details, but warns that there will be abrupt changes “.
For Ford, its current distribution model is outdated
” Our current model is ruined. We spend $600 to $700 per vehicle to promote them, and we spend nothing on the post-purchase consumer experience. The problem is that the spare parts sector is very profitable, but we only have 10 to 20% of customers who come back to us for the maintenance of their vehicle. “Develops the leader of Ford.
He adds that he doesn’t see the point of continuing to promote a car that is out of stock. ” If you see Ford Motor doing a Super Bowl ad for our electric cars, sell your stock “, he jokes.
Ford wants to produce 50% of electric vehicles by 2030. To achieve this, the manufacturer will invest 30 billion dollars and begin a project to build four new factories in the United States. Its ambitions, like those of other car manufacturers, will face other difficulties in the years to come. The main one being the scarcity of materials needed to manufacture the batteries.